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Through the cracks journalism

The latest catch.

Is the dotcom bubble about to burst (again)?

October 5, 2015

 theguardian – excerpt

In Silicon Valley, millions of dollars change hands every day as investors hunt the next big thing – the ‘unicorn’, or billion-dollar tech firm. There are now almost 150, but can they all succeed? 

Have you heard the story about the tip from the shoeshine boy, a Brit called James Pallot asks me on my last day at TechCrunch Disrupt. I have, I say, though later I Google it to get the facts straight.

It’s attributed to Joseph Kennedy, paterfamilias of the Kennedy clan who, in 1929, was getting his shoes shined by a young boy who was also making confident predictions about which stocks would rise. For Kennedy, it was a moment of revelation. He sold his portfolio. Not long afterwards, Wall Street crashed and the world was plunged into the greatest depression ever seen. So a tip from the shoeshine boy is a sign that the bubble is about to burst. That the wave of confidence will finally crash upon the shore. That the jig is up.

Pallot used to be the digital editorial director of Condé Nast in New York and now he has a startup. But then, we’re at the world’s biggest startup conference in San Francisco, a few miles down the road from Silicon Valley where the world’s greatest concentration of technology startups first started up.

His company is in the booming field of VR, or virtual reality, which is to 2015 roughly what Rubik’s Cubes were to 1982, though with rather bigger potential consequences. Pallot claims it’s the logical next step for journalistic content. In 20 years’ time, you won’t be reading this on the page, I’ll probably be leading you by the hand through a 3D rendering of a virtual TechCrunch conference floor. Or, more likely, you’ll be leading yourself and I’ll be claiming jobseeker’s allowance.

But anyway. In the meantime, Pallot asks me if I’ve heard of the tip from the shoeshine boy. I have, I say, and tell him it’s been on my mind. Because for three days, I’ve been hearing about “unicorns” – a Silicon Valley term for companies that have been valued at more than $1bn. When this usage was first coined, less than two years ago, there were 39 of them. Today, there are 147. Or as Matthew Wong, a senior analyst at CB Insights, tells me: “The funding is at levels that we haven’t seen since 2000.”… (more)

Considering the number of prayers going out for a relapse it wouldn’t be surprising if some kind of “correction” didn’t occur soon. The good news and money in Silicon Valley does not spread very far into the general populous i in the Bay Area communities. The takeover of tech is pushing traditional jobs out, which could lead to a disaster if a  downturn in tech materializes.

New SF political group launches with fall election focus

October 3, 2015

By Tim Redmond : 48hills – excerpt

VisionSF seeks to bring volunteers out for the key housing measure on the November ballot


OCTOBER 3, 2015 – A new political group with roots in both arts and activism launches Saturday afternoon with a rally at Brava Theater on 24th Street aimed at getting volunteers for five November ballot initiatives that seek to change the city’s housing policies.

VisionSF was founded by a group of San Franciscans, led by author David Talbot, who were frustrated by the direction the city is going. From the group’s opening statement:

We are San Franciscans who don’t always agree on politics – but we are deeply concerned about the future of our city.

The San Francisco we love, the city and community we helped build over many decades, is being destroyed. The creative and diverse people who have made this one of the world’s great cities are being driven out by a housing crisis created by the worst city planning decisions we have ever seen. City Hall is increasingly dominated by a small number of very rich people who seem to have no connection to the heart of the city. The city has been handed over to forces of uncontrolled greed and expansion that have little or no concern for the city’s demographic mix or its world-renowned aesthetic beauty and cultural heritage.

The group’s steering committee includes Talbot, former City Attorney Louise Renne, former Supervisor Christina Olague, housing activist Calvin Welch, writer and community activist Julie Levak-Madding, of VanishingSF, and Gordon Chinn, former director of the Chinatown Community Development Center.

The event Saturday is designed to get people involved in the initiatives that Olague says collectively represent a step toward solving the housing and displacement crisis.

“We are often accused of opposing things, but progressives want to promote a better vision for the city,” she told me.

It’s not just speeches and politics; the event will feature music and video and comedy…

Entertainment will include singer-songwriter Thomas Heyman, the Pangea Futbol Club,
and comedian Mike Evans. Filmmakers Joe Talbot and Jimmie Fails will preview “The Last Black Man in San Francisco,” and Christina Pelosi will show a trailer from her sister Alexandra’s documentary “San Francisco 2.0”
But the main idea is to generate energy for the fall election, particularly for Props. A, F, I, J and K.

Here’s the rundown on what those are:

Proposition A is a $310 million housing bond that has pretty much universal support at City Hall. It would provide money to rebuild dilapidated public housing and to construct new units at all levels of affordability. Nobody thinks this is the entire answer to the crisis, but it’s the first housing bond in some 20 years and it’s hard to find anyone who thinks it isn’t long overdue. The way the bond is set up, it won’t raise property taxes.

Proposition F would increase regulations on short-term Airbnb-style rentals. It would fill the gaping holes in the existing law, written by former Sup. David Chiu with the help of Airbnb’s lobbyists. The current law limits the number of nights a unit can be rented and mandates that only the owner of a place (or a tenant) can rent out his or her own space – in other words, a landlord can’t buy a building, evict all the tenants, and turn it entirely into an Airbnb hotel. But even the City Planning Department admits there’s no way to enforce that law. The rules require every owner to register his or her unit – but of the 6,000 or so places on the Airbnb market every night, only about 10 percent bothered to register. So there’s no way to track whether the hosts are following the law.

Prop. F would bar hosting platforms like Airbnb and VRBO from listing any units that don’t have city registration numbers. That means the platforms – in the case of Airbnb, a multibillion-dollar company – would have to take some responsibility for making sure that they and their hosts are following the law.

Proposition I would put an 18-month moratorium on new market-rate housing in the Mission District and would block any project that demolishes light-industrial space, currently known by planners as Production, Distribution, and Repair (or PDR). It would also mandate that the Planning Commission and the Board of Supervisors come up with a Neighborhood Stabilization Plan to prevent further displacement in a part of town that has been ravaged by the tech boom.

It’s not unusual for the city to designate certain neighborhoods for a temporary moratorium, and the supes voted 7-4 in favor of this plan. But that type of zoning control requires eight votes, to the proposal fell short – and community activists managed to gather enough signatures in a very short period of time to put it on the ballot.

Proposition J is an effort to preserve and save small businesses and nonprofits that have been around for decades – many of which are now facing displacement as landlords seek to rent space to higher-end users that serve the new technorati. Prop. J would give modest grants to small business that have been in San Francisco for more than 30 years and would give landlords a subsidy if they give long-term leases to those businesses and nonprofits.

Proposition K is a measure that would make affordable housing a priority when the city decides what to do with surplus land. San Francisco owns a lot of property, and some of it is underused. The measure ensures that any land the city isn’t using gets set aside for what right now is the absolute number one need: Housing for the people who work in this city.

The event starts at 2:30… (more)

Feds Say They Have Evidence Linking Raymond “Shrimp Boy” Chow to Murder

October 2, 2015

By  : sfweekly – excerpt

Federal prosecutors in the racketeering case against Raymond “Shrimp Boy” Chow say they have evidence linking the Chinatown gangster to two murders, including the still unsolved killing of Allen Leung, who preceded Chow as “dragon head” of the Ghee Tung Kong.

“Mr. Chow did not take over the (tong) because of his business acumen,” Assistant U.S. Attorney William Frentzen told Judge Charles Breyer, according to the Chronicle.

In 2006, a masked gunman entered Leung’s import-export business on Jackson Street in Chinatown and demanded cash. As Leung’s wife looked on, the gunman shot and killed 56-year-old Leung and fled, never to be apprehended.

Six months later, Chow became leader of the Ghee Tung Kong.

Frentzen says he has evidence that Chow hired a hitman to take out Leung — as well as evidence that Chow tried to recruit a hitman to kill a member of the Hop Sing Tong street gang, who was, in fact, later killed (along with his wife) in Mendocino County. Those murders also remain unsolved.

Curtis Briggs, Chow’s attorney, urged the feds to pony up whatever evidence they have linking his client to murder. Briggs dismissed the allegations as “a farce.”

Chow hasn’t been charged with murder, and per the Chronicle, it’s unclear whether he will be.

Chow was indicted last year after an undercover federal probe into alleged corruption in Chinatown. This same probe led former state Sen. Leland Yee to plead guilty to accepting bribes in exchange for political favors and illegal gun-smuggling. Mayor Lee and other Bay Area bigwigs were also accused of taking bribes… (more)

New Court Filings in Leland Yee Case Reveal Undercover FBI Agent’s Checks to Mayor Lee
Mayor Lee Accused of Accepting Bribes in Shrimp Boy Court Filings

The Top 9 People and Companies Cashing in on Airbnb’s $8 Million Campaign

October 2, 2015

By  : sfweekly – excerpt

Airbnb’s jawdropping $8 million expenditure to defeat the ballot measure that would strictly regulate short-term rentals in San Francisco has the No on Proposition F campaign on track to become one of the most expensive in San Francisco history. With five weeks to go, Airbnb trails only the American Beverage Association ($9.2 million to defeat the soda tax in 2014) and PG&E ($10.8 million in 2008 to defeat public power).

Airbnb’s $8 million far outstrips the $5.6 million that all 14 mayoral candidates combined spent in the 2011 election.

So what is Airbnb doing with all that money?

Well, first of all, the campaign has only reported the expenditures up to September 19, at which point it had paid out $3,582,028. About 20% of that dough (approximately $600,000) has gone to things like payroll, office supplies, rent (the campaign had to swallow a $10,000 loss after cancelling a $40,000 lease with landlord Edward Litke on its ill-fated Mission campaign HQ), Uber rides, Instacart deliveries, meals for volunteers, and Clipper cards.

The other 80% has gone to a handful of big winners. Here’s who’s cashing in on Airbnb’s pile of cash:

1. Sadler Strategic Communications — $1,715,097
SSC is a political consulting and media buying firm run by Sheri Sadler, a veteran of California politics who worked on Arnold Schwarzenegger’s recall campaign and Ed Lee’s 2011 mayoral campaign. Most of the money paid out to her has been put toward advertisement buys on local television stations, but Sadler has also racked up $63,359.09 in commissions, so far.

2. Joe Slade White Communications, Inc. — $316,904.45

Joe Slade White is a national Democratic campaign consultant. He’s worked for Vice President Joe Biden for years and claims that he beat David Beckham at soccer (he actually beat him at politics but whatever). White’s key to success is his “9 Principles of Winning Campaigns,” which appears to be his own version of Mao’s Little Red Book, replete with aphorisms attributed to none other than Joe Slade White:
In addition to $94,169.88 in commissions to himself, White has shelled out much of his campaign cash to media production folks, including $11,097.50 to the voice actor who did Barack Obama’s 2008 campaign ads.

3. David Binder Research — $264,800.00
Another heavy hitter with an Obama-pedigree, the San Francisco-based polling and research firm is raking in the short-term rental cash. 

4. Hsieh & Associates — $157,983.00
This is a controversial one. Hsieh & Associates is the political consulting firm of Tom Hsieh, a local Democratic Party leader who sits on SF’s Democratic County Central Committee. Hsieh raised eyebrows when he declined to recuse himself from the DCCC’s endorsement vote on Prop. F. Hsieh voted with Airbnb, and now the No on Prop F campaign has the official imprimatur of the Democratic Party. Much of Hsieh’s cash has gone to media buys on Chinese language TV-channel KTSF.

More dirt on the mudslingers.


October 2, 2015

‘Monumental’ housing bill funds $500 million in S.F. affordable projects, accelerates 3,300 units

October 1, 2015

By Roland Li : bizjournal – excerpt

A new state bill passed last week will result in around $500 million in additional funding for affordable housing and accelerate 3,300 units in affordable housing projects at San Francisco’s Hunters Point Shipyard, Transbay Transit Center and Mission Bay, according to city officials.

The new law, SB 107, gave special authority to San Francisco to use bond financing to partially fund new affordable housing. (No other city received that power, and San Francisco has had more leverage to use the tool because it is both a county and a city.) The new funding tool helps to offset the closing of redevelopment agencies, which were shut down in 2012 and removed billions for affordable housing around the state, said Tiffany Bohee, executive director of the city’s Office of Community Investment and Infrastructure, the successor agency to city’s Redevelopment Agency.

“This is monumental,” said Bohee. “We have absolute certainty on when that funding is.”

Without the new legislation, the process of funding thousands of new units would likely take 20 to 25 years. Now, the city is planning on completing the 3,300 affordable units with partners in the next five years, and the state law allows the city to issue bonds for all remaining affordable projects in the three neighborhoods. “It provides a financing mechanism, which in turn creates certainty and allows us to deliver these units faster,” said Bohee.

In the next year, OCII will release request for proposals for five affordable housing projects totaling 818 affordable units. The sites are Block 10A and 11A at Candlestick Point, Transbay Block 4 at Folsom and Main Streets, Hunters Point Shipyard Block 54 and Mission Bay South Block 6 at Merrimac Street. The city is also working on the redevelopment of the existing 179-unit Alice Griffith public housing project…

The revenue will provide about $250,000 of funding per housing unit, or about 40 percent of the total cost of around $600,000 per unit, an expense that has risen sharply due to a scarcity of construction workers and the high cost of building materials. The rest of the costs will be funded with a mix of state and federal sources and the low-income housing tax credit (more)

A shortage of construction workers and high cost of building materials is raising prices. This is the effect of supply and demand we hear so much about. Everything is connected. Once you start raising prices one place they have no where to go but up everywhere. Now wait for the interest rates to rise and send prices through the next roof right after Congress sets the budget based on last year’s rates.

Richmond district feels housing crunch

October 1, 2015

By  : sfexaminer – excerpt

By many accounts the Mission is Ground Zero for The City’s housing crisis, where more than 900 low- and moderate-income families have left in the past five years, and frequent protests aim to curb the neighborhood’s real estate frenzy.

But recent efforts by tenant rights organizations and city officials reveal parts of San Francisco perhaps previously considered immune to the housing crisis — including the foggy Richmond district — are also feeling the squeeze.

“What we’re seeing in the Richmond district is that there are very nice, large flats in apartment buildings … that are coming on the market,” said Tracy Parent, organizational director of the nonprofit San Francisco Community Land Trust, which turns apartment buildings into resident-controlled housing.

“Some cases don’t even have to list the property on multiple listing service,” Parent added. “There’s so many buyers out there … they can even find a buyer without putting it on the public market.”

That’s where the Community Land Trust steps in. Since 2001, the organization has purchased eight properties, primarily in the Mission and downtown neighborhoods, and is in the process of acquiring another three in more centrally located neighborhoods… (more)

All one needs to do is look at the Mayor’s Affordable Housing Bonus plan to understand the way City Hall operates and always will unless the election turns things around. Information on the plans are here:


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