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pirate wires #104 // looking back on proposition c, tech's san francisco turning point, "doom loop" analysis, a well-paved path to eternal homelessness, and how to solve the crisis
Covid didn’t catalyze San Francisco’s doom loop, San Francisco voted for it.
Checking in on Prop C(atastrophe). Tuesday, the San Francisco Chronicle produced two remarkable stories concerning Salesforce founder Marc Benioff. First, the Chronicle reported, due to San Francisco’s increasingly dire homelessness and drug problem there is a very good chance next month will mark Benioff’s final Dreamforce conference hosted in the city. Second — a total coincidence of timing, I’m sure — our industry’s champion of the downtrodden, the poor, and the dispossessed just donated $1 million to the Salvation Army in support of an “aspirational” program for pulling drug addicted homeless people off the streets. It was a “desperately needed” gesture, said Hillary Ronen, a city supervisor who has presided over San Francisco’s decay for six years, and she was not the only one who seemed to truly love this man.
Reaction to Marc’s selfless donation to the Salvation Army (tax deductible, of course, and actually made by Salesforce) was equally, and overwhelmingly effusive online, not only from the press and local government, but from activists of every political stripe, and leaders throughout the technology industry. I followed the coverage in genuine shock. How was it possible, I wondered, for Marc Benioff to receive such praise in 2023 for tackling a problem he declared public victory for solving — at something like 1,000 times the cost of his donation to the city, and with an actually incalculable cost to the technology industry — in 2018?
Five years ago, riding a wave of unrelentingly positive press, Benioff went to war on behalf of Proposition C, a massive new tax on San Francisco businesses, and the largest tax increase in city history. It was one of the year’s greatest tech industry dramas, as Benioff publicly demonized skeptical tech founders disproportionately hit by the tax, including Stripe’s Patrick Collison, and Square’s Jack Dorsey. Both Dorsey (in a lengthy Twitter thread here) and Collison (in a letter published to Stripe here), along with Mayor London Breed, opposed the proposition, noting, among many things, the city already spent an incredible annual sum on combating homelessness with no apparent plan for actually ending the crisis.
With about $300 million allocated to the problem every year, in significant part funneled to the city’s countless homeless non-profits and activist organizations with nothing but shameless, abject failure on their resumes to show for it, there was the reasonable question of how more revenue could possibly help a city with no clearly stated intention for the money, let alone a strategy. The mayor advised an audit on current spending, and the composition of some coherent plan, before further funding was tapped. This was widely considered heartless.
Benioff characterized all pushback on his favored policy as callous, greedy propaganda, viciously attacking Dorsey in particular. “When it comes to Proposition C,” he said, “you’re either for the homeless or you’re for yourself.” The proposition passed. Five years later, in keeping with all criticism at the time, around a billion dollars has been seized, an entire generation of tech companies has been run out of the city, and San Francisco’s population of drug addicted homeless people from around the country has increased. Today, all agree the city has a homeless problem, and almost none ascribe that problem to the city’s actual homeless policy.
Much has recently been made of San Francisco’s “doom loop,” with a sense that Covid-era remote work led to a depopulated downtown. This, runs popular thinking, gutted local retail, and led to further decline. The worse things get, the worse things get, and none of it is really any single person’s fault. It was just this awful virus, we’re told. But Proposition C catalyzed the tech industry shift out of San Francisco years before Covid, which only accelerated tech’s departure. In other words, the “doom loop” wasn’t caused by the pandemic, it was caused — or at least greatly assisted — by Marc Benioff. Now, years after his ‘victory,’ Benioff himself is hinting at an exit from the city. Incredibly, he is concurrently celebrating the city’s great success in tech, where Salesforce, San Francisco’s largest company, apparently leads. But of course Salesforce is “leading.” Benioff wielded the state as a weapon against the rest of the industry, and in so doing made himself king of a wasteland.
Back in 2020, in a piece called Extract or Die, I defended tech leaders and employees for exiting a city run by people who hated the industry, but I lamented tech’s failure to get involved in local politics. No, I argued, tech wasn’t directly responsible for the city’s decline, but it should have been the city’s salvation. That criticism, while I still think generally correct, was in one small part flawed: there had been some effort from tech in service of local politics, but that effort was largely made in support of the activist class committed to the city’s dystopian trajectory, and there is no possible way to redraft industry strategy moving forward without first analyzing the disastrous choices of men like Benioff.
In the first place, the failure of Proposition C was right there in the language of its champions. Prior to the vote on the legislation, in which gross receipts tax on businesses with over $50 million in revenue was doubled, then funneled into the newly created Department of Homelessness and Supportive Housing, Ted Egan, the city’s “chief economist” (???) declared it would almost certainly reduce homelessness.
“Almost certainly.” “Reduce.”
For over $600 million a year, in service of (then) something like 7,000 people on the streets, this historic tax increase might “reduce” homelessness. Somehow. In Marc Benioff’s victory lap, the point was much more clearly made: “there is no finish line,” he said. It was, verbatim, a stated belief that San Francisco’s homelessness crisis would literally never end. This is because solving the problem was not the purpose of the policy. Indeed, again and critically, there was never a plan in place to actually end homelessness, and no such plan exists today. The purpose of Proposition C was and remains to fund the city’s activist class of local non-profits, which — and this is genuinely a steelman — Benioff must have supposed an inherently good group of people, who meant well.
Benioff credits two things for convincing him to support Proposition C: 1) a conversation with tech journalist Kara Swisher, which is a fun digression for another day, and 2) a conversation with the socialist activist Christin Evans — or, social-ish (her family owns a $12 million home in the city). Evans publicly insulted Benioff for callousness on the issue of homelessness, which garnered a public apology from the Salesforce founder, and eventually led to a phone call between Evans, Benioff, and activist Jennifer Friedenbach, Executive Director of the Coalition on Homelessness (COH) who helped craft Proposition C. Today, Friedenbach sits on the Proposition C oversight committee, which has somehow also greenlit funding for her organization. Accusations of corruption have been made, though few seem to care, and Friedenbach’s paltry $250,000 grant is not why I’m writing today. In the first place, I’m assuming this woman is not actually dumb enough to step into something so obviously suspicious without some kind of legal loophole in her favor. But more importantly I’d like to focus on her actual policy, which Benioff helped make law.
Under Friedenbach, the Prop C oversight committee has recommended $423 million be spent on “permanent supportive housing.” This is the popular activist euphemism for the practice of giving free one-bedroom apartments to every drug addict who moves to the city. A little less than 10,000 homeless are already supported in such a manner, with something like 33,000 still waiting (it remains unclear how this list has grown so long, given San Francisco’s unsheltered population appears to be a fraction of this number). It is an incredible sum of units required, which couldn’t be built even were there adequate funds for such an undertaking as San Francisco largely, and quite famously, prohibits new housing at almost every possible turn. Unsheltered homeless with no free one-bedroom apartment available are placed on a waitlist, and left to die outside. Meanwhile, a comparatively small $53 million has been set aside for “shelter,” a concept the city’s socialist left largely considers inhuman, vehemently opposes, and also can’t be built. Sanjana Friedman recently published a detailed report on this entire strategy, and philosophy, in a great piece for Pirate Wires called San Francisco’s Homeless Ticking Time Bomb.
But, in a nutshell, here’s where the city’s at:
A well-funded, well-organized, highly vocal class of activists who genuinely believe anyone who moves to San Francisco is entitled to a free one-bedroom apartment for the rest of their life (provided they are sufficiently drug addicted or mentally ill) maintains total strategic decision making for the city’s homeless funding. Separately, activists have systematically driven productive tax payers out of the city along with industry, which they both hate on an instinctive level and need to fund their policies, while marketing to the nation’s entire population of the mentally unwell and dispossessed. The results were inevitable.
With analysis of the city’s strategy here laid down, I think it’s worth finally explaining exactly what the city needs to do — what every city needs to do — to solve the homeless problem. Much of this solution is obvious, but requires a painful engagement with reality. In the first place, homelessness in San Francisco is not a housing problem. San Francisco has a massive drug problem, and drug addicts are chiefly motivated by proximity to drugs. This is why American cities with high, well-meaning tolerance for drug dealing, and ample supportive services provided in place of mandatory treatment, attract the most homeless people in the country, and such people prefer urban slums adjacent to major drug markets over idyllic farms and fields and remote, seaside vistas.
Like most people, I believe we live in a society in which the absolute lowest a man should be able to fall is onto a bed, in a warm shelter, with food, clothing, bathroom facilities, and medical care. Fortunately, San Francisco already has more than enough money needed to provide such charity for every homeless person in the city. All the city requires is strategy and will.
The policy should look something like this: strip all non-profits of city homeless funds, then pool all of the city’s homeless funds in the mayor’s office, and task a single person with directing a new, emergency strategy. The goal: zero homeless people on the streets of San Francisco. With hundreds of millions of dollars at the director’s disposal, and with total legislative alignment from the government, emergency shelter should be immediately established on the outskirts of the city, in one of the parks perhaps, far from the city’s drug markets. Then heated, temporary shelter, bathrooms, food, clothing, and nursing support geared toward treating addiction should all be supplied. Once the shelter is erected, and the man power is put in place to facilitate the emergency program, the city must immediately ban sleeping on the streets. Henceforth, the homeless should be provided the options of 1) moving to emergency shelter, or 2) taking a free bus home, with the reestablishment of the city’s Homeward Bound program. Finally, drug markets should be forcibly cleared. Fentanyl dealers should be arrested, and tried for mass murder. Fentanyl dealers living in the country illegally should be deported.
With legislative alignment from the city, and the full budget for homelessness redirected from the task of growing our city’s homeless population to providing that population with emergency shelter and supportive services, the problem can be solved in a month or two. And it has to be solved. This remains the most important thing: in order to solve a problem, solving the problem has to be the goal — not funding committees to think about the problem, not in some ambiguous way easing the problem, but actually solving the problem. This is true of homelessness, but is also, I think, a philosophy of governance surprisingly not in vogue, in almost any corner, from almost any party, for almost any one of our great, civic challenges.
For most executives in tech, San Francisco’s failure of intention is difficult to comprehend, as business is impossible without clarity of purpose, and technology in particular is nothing if not a system of inputs and outputs directed toward some very specific end. But while such earnestness tends to make technologists naturally somewhat vulnerable to grifters, and blind to reality, it also makes them, if they would truly commit themselves, an ideal group of leaders — for our cities first, and then our country.
Just no more amicable calls with deranged activists, please. And problem solved, by the way. You’re welcome.