
SF is so expensive that waiters can no longer afford to live in the city - eplanit
https://m.sfgate.com/technology/businessinsider/article/san-francisco-so-expensive-housing-waiters-food-13461447.php
======
uhtred
San Fransisco is the most shocking city I've visited, in the world, in terms
of wealth inequality. It felt a few small steps from being a distopia.
Homeless people and drug addicts staggering around and shitting in the street
a few hundred meters from high end boutiques with armed guards that 99% of the
population could never afford to buy anything from.

~~~
hopefulengineer
progressives would have an easier time convincing conservatives to support
their policies if the most liberal places in the country weren't complete hell
holes with the worst income inequality

be the change you wish to see in the world and all that

California, New Jersey, and Illinois all in bottom 5 for quality of life, New
York at 37.

[https://www.usnews.com/news/best-states/rankings/quality-
of-...](https://www.usnews.com/news/best-states/rankings/quality-of-life)

~~~
dmode
Most liberal places are hell holes ? I mean Marin County is 80% Democrats is
one of the best places to live in the world. In fact the entire coast of US
from San Diego all the way to Washington is all blue. What about huge cities
like LA and NYC ? Are they hell holes too ? I don't really need to point out
what areas of the US are true dystopian, with no jobs, declining life spans,
opiod epidemics, and so forth.

Also, urban areas will have blight. That is true for any country in the world.
But what makes the US unique is the historical context of slavery,
reconstruction, segregation, white flight, incarceration etc. It's like 400
years of history and baggage.

~~~
hopefulengineer
>I mean Marin County is 80% Democrats is one of the best places to live in the
world

sure, if you're white and well educated. The brown serf laborers have all been
nicely segregated away so you don't have to see the misery

[https://sanfrancisco.cbslocal.com/2016/03/17/marin-county-
ra...](https://sanfrancisco.cbslocal.com/2016/03/17/marin-county-ranked-
health-income-inequality-segregation/)

~~~
dmode
You can also easily go to a very brown area and see the same thing. I mean
Cupertino, Sunnyvale, Fremont, Dublin, San Ramon are heavily Indian cities, if
not outright majority, and heavily blue. They are also awesome places to live.

------
kevin_b_er
Maybe when the landed gentry can no longer get service in public, they'll be
willing to see more housing.

~~~
conanbatt
The city could start by eliminating the sales tax and pile it on property
taxes: it immediately increases worker wages, and lowers the value of
properties in one go, affecting mostly those that do not consume in the city
at all.

~~~
ssambros
Prop 13. They can't just increase property taxes.

~~~
conanbatt
Call it "garbage collection tax". Economically, you can do it.

------
deadmetheny
This isn't hugely surprising - margins for restaurants are extremely thin, so
the eventual end game at this rate is for establishments that are extremely
expensive and able to actually pay their workers decently to be the only
choice available. Upping the minimum wage for them is really just going to
result in speeding up the process (you cannot extract blood from a turnip,
after all) and putting more people out of work even faster. Something's gotta
give here, and it's unfortunately probably not going to be the people who were
living and working in SF before the tech boom.

~~~
mcv
If SF is so ridiculously expensive, it makes every kind of sense for
restaurants to raise their prices accordingly.

The only reason for restaurants to have paper thin margins is if there are too
many of them. That will probably change once their waiting staff disappears.

~~~
YinglingLight
I'm preeeety sure each and every restaurant owner is keenly aware of how their
business will fluctuate if they change prices. This is their livelihood after
all.

~~~
grogenaut
Knowing a few people in the restaurant biz, no, many of them are very bad on
the business side and big on the passion side.

~~~
deadmetheny
I own a foodservice business and it tends to be a mixture of both. You're not
going to be able to run an establishment without at least some business
acumen, but everyone who's ever worked in the industry is fully aware that the
pay is complete shit in terms of effort expended. So, as a result, owners
pretty much have to be very passionate about the industry in order to even
contemplate opening their own place to begin with - and this is here in the
Midwest, God help anyone who wants to open something in a major coastal city.

------
jostmey
It's not just waiters that can't afford the city. San Francisco could
literally price itself out of existence. My previous partner was looking at
residency programs. Being a doctor in training is not an attractive
proposition in San Francisco, and I _believe_ she is happy that she did not
match there.

There's a huge fraction of the workforce that cannot afford San Francisco. It
has nothing to do with tech. It's the lack of new housing and apartments being
constructed that's driving the problem and making everything more expensive
there. I don't even want to visit San Francisco again

~~~
dragonwriter
> San Francisco could literally price itself out of existence

No, it can't.

It's only expensive as long as there are people willing and able to pay the
cost.

> There's a huge fraction of the workforce that cannot afford San Francisco

Yes, and that's why commuting is a thing.

> It has nothing to do with tech.

It has everything to do with tech.

> It's the lack of new housing and apartments being constructed that's driving
> the problem

No, it's that plus the money (largely from tech) chasing what units are
available. Supply constraints alone can't control prices. If there's no
demand, price is going to be zero (or undefined) however limited supply is,
because no one will be buying. San Francisco has high demand (that is, lots of
people willing and able to pay much higher than prices than the market price
in many other areas) and constrained supply.

~~~
closeparen
Regarding commuting, replace “San Francisco” by “anything within one hour of
San Francisco at commute time.”

------
niftich
Rent, other than the amenities of the dwelling itself, affords access to a
location, which is likely far more valuable in the minds of those making the
decision than dining out.

In addition to the issues with high cost of living that affect other big
cities like New York and DC, the restaurant market in the wider Bay is
somewhat distorted due to so many firms of high earners offering food on site.
This shifts sit-down restaurants further towards the discretionary, incidental
end of spending and away from daily needs.

Lunch hours typically have a lower proportion of high-income customers than
dinner hours, but this decreases their share further. A common solution is to
raise dinner prices to be a higher multiplier above lunch prices, but that
only makes sense if the pricing won't drive away business to competitors. For
most of these restaurants, attrition and consolidation will continue to
happen, while a few will try to move further and further upmarket and focus on
branding and an intangible experience, to remove themselves from pricing
pressure.

------
toomuchtodo
TLDR Waiters' pay has not yet risen enough, and meal prices increased
accordingly, for them to continue to live in SF. Establishments are reducing
staffing instead. SF micro economic disfunction continues.

"Analysts are also calling a lack of employees one of the biggest problems in
the restaurant industry today." (My note: No lack of employees, just lack of
employees willing to work for current pay offered.)

EDIT: "The demand for highly skilled help is especially acute in Washington,
where a boom in restaurants run by creative chefs is outstripping the region's
labor force," The Times wrote.

[https://www.vox.com/2018/12/12/18136392/dc-
initiative-77-rep...](https://www.vox.com/2018/12/12/18136392/dc-
initiative-77-repeal-measure)

"A judge just blocked another effort to raise wages for restaurant workers in
DC"

There is no employee shortage, ever. Just a shortage of businesses owners who
are willing to pay market rate for labor.

~~~
izzydata
While we are on the topic can we work towards eliminating the idea of required
tips and it being an expected part of a servers wage? I don't care if the base
price of food costs more if it means they have a normal wage.

A tip should be an additional non-expected gesture.

~~~
mal10c
Are tips required? I know they're automatically included for large groups (at
least where I live). Which I find annoying as a customer.

But actually to your other point. If I'm interested in working as a waiter at
some restaurant, but I'm uncomfortable with tips being an expected part of my
wage, then why would I either pursue that job, or accept it under those
guidelines? Couldn't I work somewhere else instead and get the same amount of
money?

~~~
izzydata
Maybe not "required", but they are highly expected of you and you are only
hurting your server if you don't. The expected percentage of your tip somehow
keeps going up as well. It's a percentage so this makes little sense to me.
The prices are already going up so the tip would also go up as it is a
percentage of the base price. Regardless it has gone from an expected 10% 20
years ago to an expected 20% today.

~~~
lotsofpulp
I recall it being 15% 20 years ago, but yes, I never give more than 15% for
regular service since it’s already inflation adjusted.

~~~
logfromblammo
15% for median service. 10% for 1 or more standard deviations below, and 20%
for 1 or more standard deviations above.

So you pay 15% on 2/3 of your meals, 10% on 1/6, and 20% on 1/6\. But the mean
is also 15%.

Giving 20% to everybody is Lake Wobegon syndrome, where all the servers are
above average. If you don't adjust your tip based on the quality of service,
you remove the incentive to strive for above-average service. You end up with
servers that sit down at your table when taking your order and chitchat with
you, instead of just doing their job professionally while you can see or hear
them, and bitching about it in private later.

~~~
izzydata
If you go to Chilis or anywhere with those tablets at the table and pay with
your card it will auto suggest a 20% tip.

I've seen some other places with a different kind of tablet that simply has
boxes for different dollar amounts of no tip, but they are typically not
places that even have servers. Why would I tip at a retail shop when all I did
was grab something off a shelf and bring it to the counter?

------
paul_milovanov
"No longer"? this didn't exactly happen yesterday; and it's not limited to SF
-- Mountain View or Palo Alto are exactly the same.

~~~
stillworks
Anecdata but now seems relevant after reading this. And this is from
2013/2014\. I visited SV on business trips and was boarding in downtown San
Jose for a week or two on each trip.

I was always surprised that the waiting staff would actually stand with me and
engage in conversation while I queued up to be seated. Travelling from the
U.K. I had never experienced this level of "niceness ?"

Later I was educated that they are basically only earning anything meaningful
from the tips. The wages were puny and they were increasing their chances of
getting relevant tips by being so nice.

Things have gotten worse I believe.

~~~
scruple
It's known as tipped wages [0] (or, sometimes waitress wages).

[0]:
[https://en.wikipedia.org/wiki/Tipped_wage](https://en.wikipedia.org/wiki/Tipped_wage)

~~~
bihnkim
The State of California has the same minimum wage for both tipped and non-
tipped jobs.

------
saalweachter
So while housing supply versus demand is what people focus on, the social
problem here (people feel like you can only live in SF if you work in tech,
and high-paying tech at that) is coming from a weird sort of income
inequality.

You have both extreme income differences -- an engineer might literally be
making 10x what a waiter does -- and also an absurd number of people on the
high end. You don't have one or two or a few hundred or a couple thousand
people earning an order of magnitude more than the median, you might have a
hundred thousand people with incomes an order of magnitude larger than the
people below the median.

So my question is: is there any research on what we want income distributions
to look like? Would these problems be occurring if engineers made 2x, 5x or
1.25x what waiters did? Would they be happening if the number of engineers was
less than 5%, 10% or 2% of the city's housing stock?

How would the current parameters have to be tweaked before people who weren't
earning the top incomes didn't feel like they were being left completely
behind?

~~~
solidsnack9000
_So while housing supply versus demand is what people focus on, the social
problem here (people feel like you can only live in SF if you work in tech,
and high-paying tech at that) is coming from a weird sort of income
inequality._

Can you demonstrate that? San Francisco is more distinct from other
municipalities for its poor housing policy, than for the presence and density
of highly paid professionals.

The rest of your comment flows from this idea, that the presence of certain
kind of people and what they make for a living is something under the control
of policy makers. This seems like a strange idea in a country with
unrestricted freedom of movement and a basically free market economy.

It is striking that you are willing to operate with the idea that policy
makers could have that kind of power, while not approaching the problem from
areas where they so clearly do have power: public transit and housing policy.

~~~
saalweachter
While I'm generally interested in problem-solving, in this case I'm interested
in problem-understanding. Yes, the housing policies are notoriously stupid,
but there are parameters underwhich they are inconsequential. What are they?

And while San Francisco has put its own delightful spin on it, gentrification
is by no means unique to the Bay Area. Neighborhoods shift over time
inevitably but sometimes these shifts are sudden and many former and soon to
be former residents feel pushed out and left out. What are the parameters for
a neighborhood population to turn over without anyone noticing or caring?

~~~
solidsnack9000
_Yes, the housing policies are notoriously stupid, but there are parameters
under which they are inconsequential. What are they?_

If there had been no change in demand it all, San Francisco housing policies
would not have been a problem. That was not a robust assumption given internal
freedom of movement within the United States.

 _And while San Francisco has put its own delightful spin on it,
gentrification is by no means unique to the Bay Area. Neighborhoods shift over
time inevitably but sometimes these shifts are sudden and many former and soon
to be former residents feel pushed out and left out. What are the parameters
for a neighborhood population to turn over without anyone noticing or caring?_

Maybe it depends somewhat on the nature of the new residents. If they are
moving for a new job, new building can blunt the impact. People will take the
new housing that is within a credible commute distance of work. If, however,
the new residents are deliberately seeking to enter and bid up historic or
trendy areas, some kind of defense is necessary as well. In Berlin's case,
there was legislation to prevent too much improvement of apartments -- putting
in new kitchens and so forth -- in certain areas, to prevent the rent from
rising.

San Francisco has new residents of both types; and suffers from many other
forces. It is small and on a peninsula, so there is only one dimension for
growth (Berlin, DC and similar areas can grow square-wise). Its housing
policies prevent new building. Public transit is not that great; getting to
work from the western half of the city takes almost as long as coming from
Oakland. Thousands upon thousands of people moved here to take jobs in the
area. Many of them targeted small neighborhoods like The Mission and Noe
Valley and Potrero Hill.

The latter behavior is particularly remarkable in SF because these
neighborhoods were typically far from their jobs. Company shuttles undoubtedly
contributed to this problem. It was like public transit operating in reverse:
centralizing the residences and dispersing the commercial centers.

------
tempodox
Next startup frenzy: Create waiter-less bars and restaurants.

~~~
bliblah
I think it will be more like "New app enables ordinary people to work on
demand as waiters, janitors, and baristas in their spare time!"

------
darawk
So...what? If this is a problem, restaurants will pay their waiters more until
they can live in the city. If it's not a problem, they will not.

~~~
TaylorAlexander
There’s a huge middle ground where working as wait staff will just suck hard
because the workers will get paid very little and commute from far away.

~~~
darawk
If it sucks that hard, they'll move elsewhere. If not, they won't.

------
analognoise
So we need some kind of waiter robot, that can take orders, deliver food, wipe
down a table, and roll silverware into napkins. This is clearly a better
solution than paying a living wage to people.

Then we can just detach SF from California, and let it float out to sea.

~~~
latchkey
They kind of already have this. [https://cafexapp.com/](https://cafexapp.com/)

------
Claudus
Maybe SF should allow development of more housing to accommodate the increased
population, instead of imposing restrictions to preserve their skyline.

[https://www.bizjournals.com/sanfrancisco/news/2017/02/16/hou...](https://www.bizjournals.com/sanfrancisco/news/2017/02/16/housing-
crisis-restrictive-building-laws.html)

Increasing salaries isn’t going to create more housing, it will just drive up
prices even more.

------
linuxftw
Less waiters in the city presumably means rising wages for the waiters that
are in the city. If wages can't rise enough to have adequate staff,
restaurants close. If restaurants close, real estate values decline. If real
estate values decline, waiters can afford to live in the city.

Unfortunately, subsidized housing and welfare enable businesses to pay less
than a living wage. People that are in poverty are kept in poverty, and the
businesses have a captive labor force.

It's almost like there's a specific cause and effect.

~~~
conanbatt
Not necessarily: prices can rise. I've seen first hand how many things
increased prices in the last few years, and is all most likely a consequence
of rent.

All in all, for a city that has an annual budget of 11 billion dollars, the
city is a mess, and times of plenty beget times of crisis. At some point even
people with RC will leave the city, and the downturn will not be negotiable.

~~~
linuxftw
The question is, why is the rent so high? The reasons are purely economic.
Arbitrarily low number of housing units available (zoning laws) and subsidized
behavior. Rent-Controlled apartments further remove inventory from the
marketplace overall, pushing the increased cost onto other renters. Higher
taxes for government subsidized transportation (buses, metro, even roads)
raises the rent. You're not saving anyone any money by building these things,
only moving the cost (for mass transit, people will invariably respond with
the immeasurable economic benefits these things provide, but they are mistaken
as to whom actually benefits).

Democracy at it's finest. I expect the rent and real estate to keep rising
perpetually, that's what the voters seem to be demanding, even if indirectly.

~~~
conanbatt
I think San Francisco is simply explained by the Georgist interpretation of
the same city in the 1900's. The city awards landlords with lots of income
from corporate and sales taxes, and reduced property taxes. Then piles on
rent-control to produce pseudo-landlords. The interests are very misaligned,
and thus you get high rents in old buildings, homeless people and a transient-
disproportionally foreign- population.

But the music stops: at some point the bargaing of a tech-job will not be
enogh to keep people in.

~~~
linuxftw
I think we'll see a new age in public housing and basic income in SF before
the music finally stops there; we might see some dips and down turns, but it's
got a long way to go before it approaches that cliff.

With the right political administration in power at the right time, they might
even be able to wrangle a bailout from the rest of the country! The midwest
successfully did it vis-a-vis UAW and GM (sure, the fatcats got a taste, but
the real money was in preserve the taxbase of those towns and saving the
workers' pension).

~~~
conanbatt
> I think we'll see a new age in public housing and basic income

With a tax expenditure of 2,600U$S per household by the city management, i
wouldn't expect any basic income ever.

