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Filed under: boom gone bust in San Francisco

SAN FRANCISCO — It was noon, when the streets of San Francisco south of Market should have been packed with dot-com-ers taking long, languorous lunches. But the clutches of three and four young high-tech professionals that once filled the sidewalks were gone; the restaurants that they frequented were half empty.

A lone panhandler at a street median had crossed out the "www.i'm broke" that he had used to appeal to his audience and had scrawled, "Anything helps — if you can."

Life certainly seems different here from what it was six months ago, when San Francisco was the sizzling center of the Internet universe.

This is where the players in the New Economy flocked to throw around all that stock-option money gushing like geysers from Internet ventures.

Though the industry's big guns like Oracle, Cisco Systems and Intel had their headquarters in Silicon Valley south of the city, every new start-up company wanted to be here. The clamor for office space sent commercial rents soaring, with prices for the first time surpassing New York's, traditionally the highest in the country.

The city was like one big party, but only a chosen few could fit in the door. The rental vacancy rate was nearly zero, with about 50 people applying for each available unit. Trying to buy a house was even harder, with the sticker price on fixer-upper two-bedroom bungalows in so-so neighborhoods rarely less than half a million dollars. People began asking if the boom that was changing the face of San Francisco would ever let up.

But no one is asking that any more. The party is over, as finished as a fallen souffle. Scores of companies have shut down, restaurants and bars that felt like New Year's Eve every night have quieted down, and "For Rent" signs dot the once dot-com-saturated neighborhood of South of Market, or SoMa.

In the past three months, commercial vacancy rates there have more than doubled, to 18 percent, while the vacancy rate for office space throughout the city has soared to 8 percent from 2 percent last year. Defeated entrepreneurs have gone packing. And the city has five times the number of available apartments that it had last year, real estate agents say.

In San Francisco, which more than any other city experienced the exuberance of the New Economy, the changing fortunes seem the most profound.

In January, when, a Web site for high-tech workers, held its second pink-slip party, 500 people showed up in a driving rainstorm, and many of them said they were glad for the break from a job. But now, with the relentlessness of layoffs, no one seems to be celebrating a forced vacation.

Patty Beron, the founder of, thinks the mood at the parties "is still positive" even though they continue to attract more laid-off workers. The most recent party in San Francisco, earlier this month, drew 1,300 people, more than twice the one before it.

Nobody is hiring for entry-level positions, Beron conceded. "So kids just out of college are having a harder time," she said. "But they're young and resilient and they've got their looks, right?"