San Francisco’s Tenderloin Resists New Money Invasion: Cities

For 30 years Del Seymour ran his business from a park bench smack in the middle of prime San Francisco real estate.

“I spent 20 hours a day there, selling and using, drinking and whoring, running my girls out of there,” says the 67-year-old, who has been clean for eight years. He now leads walking tours of his old stomping grounds in the area known as the Tenderloin. “That was my kingdom.”

Gone is his office in the Gauntlet, as the grim open space was known before it closed two years ago. After a $9.3 million facelift, the new Boeddeker Park is replete with a cerulean-blue basketball court, a tai chi patio and a set of freshly painted swings. Yet children rarely come out to play.

Even with tax breaks drawing Twitter Inc.’s headquarters two blocks south of its perimeter, the Tenderloin remains a defiant island of poverty. In a city where wealth has overrun once-gritty areas including the Mission, San Francisco’s enduring skid row has punctured the truism that new money turns seedy enclaves like New York’s East Village into hipstervilles.

“The story of urban neighborhoods in the U.S. is that they either become desperately poor, drug-dominated and very unpleasant places to live, or they become gentrified,” said Randy Shaw, who started the Tenderloin Housing Clinic, which provides about 1,600 units to low-income tenants. “There can be an alternative narrative.”


Take his neighborhood -- less than three blocks from Union Square and upscale shops such as the new Alexander McQueen boutique.

Start at the Warfield building, which houses a theater that was once a venue for Grateful Dead shows and whose upper floors are now the home of the music-streaming service Spotify Ltd. Turn the corner and you’ll stumble into someone scoring a fix, shooting up heroin or defecating on the same street where celebrity chefs Roy Choi and Daniel Patterson plan to open a healthy fast-food joint in the first half of this year.

It’s a familiar tableau for James Downs, who serves $14 cocktails at the nearby Bourbon & Branch: “I once saw a homeless man putting needles in the crack of the sidewalk with the needle facing up so people could step on them.”

That juxtaposition shows how the Tenderloin is resisting being overrun by a new wave of urban settlers. While there are numerous examples of downtown revivals, the effects of gentrification may be overstated, studies published by online researcher City Observatory and Oxford University Press show.

Zoning Laws

Zoning laws and a housing stock with virtually no single-family homes have combined to preserve the Tenderloin and its eccentricities. One can count more than 60 liquor stores, but no supermarkets.

With 30,000 people crammed into 40 square blocks, it’s the most densely packed district in the city. A concentration of single-room-occupancy hotels, known as SROs, house a low-income and transient population.

Such cheap digs -- an 8-foot by 10-foot room with bathrooms and a kitchen down the hall -- were ubiquitous at the turn of the 20th century, when they offered shelter and flexibility for herds of factory workers, seasonal laborers, seafarers and immigrants swelling the ranks of American cities.

Over time, they disappeared from Chicago and New York to make way for high-rise condominiums. San Francisco was headed the same way with the razing of the heavily black neighborhood of Fillmore in the 1960s.

“This land is too valuable to permit poor people to park on it,” said Justin Herman, head of the Redevelopment Agency, in 1970 on evicting Asian seniors from Manilatown.


What happened instead was a backlash. The opening of a Hilton hotel at the edge of the Tenderloin in 1964 roused residents and advocacy groups into action. Together they pressured the city to pass laws to save the SROs.

The outcome was a height limit for buildings of 84 feet (or eight stories) and restrictions that effectively meant that if you tore down affordable housing, you had to replace it. The death blow for developers came when nonprofit organizations led by Shaw bought at least a quarter of the old residential hotels and took over leases of many others using city grants, donations and federal funds.

“That sealed it,” said Peter Field, who conducts walking history tours of the Tenderloin showing where the 19th century parlor houses -- or high-end brothels -- were once located. “The NGOs aren’t going anywhere and now neither are their clients.”

Lost Soul

Today there are about 100 of these low-rent boarding houses recognizable from the lit-up marquees of a bygone era. They run the gamut from bed-bug ridden windowless lairs run by slumlords to the spartan dorm rooms at the respectable Fairfax Hotel, where military veterans stay for free.

Gavin Newsom, California’s lieutenant governor and a former mayor of San Francisco, said the area stays so blighted because of the disproportionate number of these hotels and the “off-the-chart concentration of social services” around them.

“We’re managing problems as opposed to solving them,” he said in an interview. “It’s that fine line. You want to make the investments, you want to improve conditions but you don’t want to displace because then you lose the Tenderloin. Lose that, we’ll really be losing our soul.”

Clueless Tourists

Unsuspecting backpackers looking for a cheap place to crash have stumbled into privately held residential hotels such as the Sheldon, which was sued by long-term residents for hawking rooms on Airbnb Inc.

The city filed suit in 2012 against a family that owns 15 buildings in the Tenderloin, citing unsafe living conditions such as rodent infestations, severe mold, raw sewage leaks and defective wiring. One Yelp reviewer said the Winton, one of the hotels cited, “is where you go when you’ve f---ed up one too many times in life.”

Gary Lewis, executive director of The General Assistance Advocacy Project, which provides walk-in legal counseling, has a bucket outside his office collecting the fetid water seeping from the ceiling of a rundown hotel upstairs. Even so, his rent just went up 25 percent.

“The economic formula can change,” Lewis said. “There is no rent control on commercial property so NGOs like us are feeling the squeeze.”

The mental-health clinic down the street mulled relocation after its rent doubled, raising the specter that charities will be forced out by dot-commers.

Area’s Allure

When Mikkel Svane first visited San Francisco in 1987, he stayed at the Phoenix Hotel in the Tenderloin. More than two decades later, having founded software company Zendesk Inc., the Dane was scouting the city for affordable space. Far from a hindrance, the Tenderloin’s reputation for squalor was a draw.

In 2011, Zendesk became the first tech company to move in. In exchange for a tax break on wages, it reinvests a third of those savings back into community projects. Employees also do volunteer work, from serving meals to giving computer lessons.

“We are not offering the pristine campus of Google or Facebook,” said Tiffany Apczynski, director of social responsibility for Zendesk. “We had two murders in our back parking lot and a shooting last summer.”

The starting price for a studio flat in the Tenderloin is about $1,200. While that’s not cheap, it’s a steal compared with the rest of the city, or even across the Bay Bridge in Oakland.

“This is always going to be a neighborhood to serve the needy,” Seymour, the reformed tour guide, said. “The needy don’t look that good and they don’t smell that good. So if you want to come down here and make $100,000 and move in next door, you’re going to step over my clothes cause they’re going to be on the ground.”