Creator City

There’s a magic about San Francisco, an aura surrounding it that pulls you into its orbit, as if the gravity of its 47 square miles is slightly more powerful than other places. It has one-fifth the office space of Manhattan and one-twelfth the population of Los Angeles County. Yet San Francisco is accorded “gateway” status, capturing global mindshare far greater than its size would suggest.

Perhaps it’s San Francisco’s stunning natural beauty, arrayed around a majestic bay, hemmed in by golden hills. Or perhaps it’s the fair weather and the way it transforms over the course of a given day. Or perhaps it’s the diversity of its population and the great cultural bonuses that brings, or the magnificent universities that lie adjacent and within. Or maybe it’s the legendary spirit of its citizens, open to risk and challenge, always pressing for change and improvement.

Most people in San Francisco are from other places. Once they arrive, they stop searching and stay, tolerating the eye-watering costs and occasional breakdowns of social order.

San Francisco is a place people work toward—a place that once earned is rarely given up.

The city’s pull has endured for generations, with its feverish adoption by the tech sector only its most recent incarnation.

Offer an elite engineering graduate—or any graduate for that matter—a chance to live in San Francisco on commensurate economic terms with nearly any other city in the world, and San Francisco wins that contest more often than not. Living in San Francisco is not a question of want to; it’s a question of how to.

And so it is natural, when the city stumbles as it most clearly has, to wonder if this time things are different.

Will San Francisco regress? Will it lose population, jobs, stature, self-respect? Will it be overtaken by crime and predation? Will its challenges expand and consume it?

I say, no.

San Francisco’s future as the preeminent city of innovation—as a global creator city—has decades of runway ahead of it. Why do I know this to be true?

First, San Francisco has a critical mass of important drivers.

San Francisco’s economy has been built on durable fundamentals that will be hard to dismantle. This ecosystem revolves around the tech sector, which is now 15% of regional employment, but it sweeps in vital supporting industries including venture finance, accelerators, intellectual property law and so forth.

This ecosystem is also anchored by institutions such as Stanford, Berkeley and UCSF, collectively pumping out nearly 10,000 elite engineering and science graduates each year, while grants flow in to fund faculty-led primary research. Knowledgeable angel investors help the best ideas get through the lab, and then a massive venture industry kicks in to help the companies founded on those ideas go to market and create jobs.

San Francisco also benefits from positive momentum in key areas.

Despite negative headlines and well-publicized layoffs, the tech sector is growing apace. Regional tech employment has grown by nearly a fifth over the last five years, with some categories of tech employment growing over 50% in that time. This has helped to push tech incomes up 39% over that same time frame.

Some of that new employment has funneled into the most dynamic growth sector in the world: artificial intelligence. Most people know about the most visible AI companies, such as OpenAI. But ask people how many AI companies have leased space in San Francisco in the last five years, and few people would correctly guess that there are 180 names on that list. The 4.1 million square feet now leased by AI companies is three times the size of AI’s footprint in 2018, while the region has captured 58% of all AI venture funding over the past five years.

And San Francisco has an extraordinary base of wealth and talent to help solve its challenges.

Within San Francisco’s boundaries lies a vast reservoir of extremely civic-minded individuals and institutions, notably the Bay Area Council, which has been an effective force uniting civic and business leaders for decades. Unlike other cities with vexing social problems, San Francisco’s problems persist for a list of reasons that conspicuously does not include a lack of resources to apply to solutions.

Consider the city’s highly visible struggles with its homeless population. More than 7,800 people show up on the annual census of homeless people, and the difficulties they endure cannot be overlooked. However, the city’s budget for homeless services is about $686 million per year, which amounts to $88,000 per homeless person per year—sufficient, most would say, to lift a great number of homeless people out of this terrible situation.

But with all of San Francisco’s strengths, the city’s continued outsized success is at risk. And now’s the time to act to ensure the city’s hallmark innovation-capital-jobs-prosperity continuum remains alive and well into the future.

First, we need to improve collaboration between the public and private sectors.

A healthy San Francisco with its innovation-capital-jobs-prosperity engine humming should resemble a joint venture between public and private sectors.

Is there a major city in the U.S. that ignores the legitimate needs of its dominant, flagship industry like San Francisco does with the tech sector? To my knowledge, New York City has never turned its back on the financial sector, nor Houston on the energy industry, nor Los Angeles on film and television. Great cities usually protect and foster their hometown industries. San Francisco badgers it, taxes it, dares it to leave, and then condemns it when it does.

Nuisance legislation is constantly proposed, including a recent attempt to outlaw corporate cafeterias (central to many tech firms’ worker experience), and residents squabble over “luxury buses” that ferry tech workers to jobs in the Silicon Valley. More serious damage has been done by recent tax legislation, including a massive gross receipts tax and a 3.5% tax on rental payments in commercial properties. It’s as if city government believes the golden goose that is the tech industry will still lay its luminous eggs, no matter how badly it is flogged.

We also need to improve affordability by unleashing denser multifamily construction.

San Francisco’s housing affordability crisis is eminently fixable—or, at least, improvable—if government would reduce or eliminate disincentives to private-sector multifamily housing development.

There are many examples of cities that navigate this successfully. Consider Vancouver, another expensive but beautiful city on a bay, occupying nearly the identical landmass as San Francisco, with roughly 80% of San Francisco’s population. From 2010 to 2022, San Francisco added roughly 37,000 housing units, which represents an annual increase of under 1%. Over the same period, Vancouver added more than 66,000 units. Other cities popular with the tech sector, including Seattle, have added housing to their stock at rates even exceeding that.

Recently announced initiatives, such as Mayor London Breed’s 30x30 program to add 30,000 new residents to downtown by 2030, along with supporting proposals to reduce or eliminate city-imposed fees on residential conversions, are important steps in a very positive direction.

It can be done, but city governments don’t build apartments. Investors and developers do. Given proper incentives, they will fill San Francisco with new product, and additional supply will do what it always does to prices that are allowed to float.

And in the end, we need to reprioritize the basics.

Great cities inspire creativity and optimism. They show us what’s possible individually and collectively. Walk through the sculpture garden at the Musée Rodin or down an allée of linden trees in the fall in Paris and tell me I’m wrong.

San Francisco is no different. Consider our thriving arts community, with outstanding music, dance, opera, theater, film, performance art—basically, anything a soul needs for nourishment.

But cities that can’t solve for the basics of safety, food and shelter cannot deliver on our higher aims. If the foundation is weak, there’s little room for aspiration. And in San Francisco, we need to work harder to get it right.

I am most squarely in the camp of people who are rooting for San Francisco, in part because I am one of those believers who came here and stayed. It’s a remarkable place—unlike any other city. Its promise is as large as it ever has been, even as current problems have taken their toll.

We know what we need to do to ensure San Francisco endures as an emblem of progress and a beacon of the spirit of America and global creators. We just need to do it.