After we enter the address Stonly Baptiste, partner at Urban.Us Fund, gives us for our meeting, our Uber, cruising its native San Francisco, drops us at a bank in the Financial District. The man himself whizzes up the street to greet us on a one-wheeled, self-balancing skateboard-style contraption and ushers us in to a meeting room as though it was his own living room. In any other city, this scene could be considered a little odd to say the least. In ‘Frisco, the collision of high tech and novel disruptions, big finance and little startups has become the norm. As more and more of the creative tech industry focus on solving urban problems through innovation, the city is the perfect testing ground and, on the way, the solutions and the eager community that creates them has helped San Francisco continuously rank at the top of the league for liveability.
It’s no surprise then, that the Bay Area (which spans San Francisco and Silicon Valley), has bucked the trend that’s seen innovation fade away in most US metro areas – in fact, the area’s filed patents continue to increase. In 2008, the Bay Area created 16% of all US innovation – and that’s before massive tech-enabled disruptors like AirBNB, Uber and Lyft even emerged. Of course, the city of San Francisco is now synonymous with technology, both hardware and software, but even more interestingly, growth of non-tech patents filed from the city has exceeded all other big metro area: the Bay Area saw its share of non-ICT patents grow from around 4% in 1976 to around 7% in 2008, while New York’s declined from around 14% to just over 8% – and people like Baptiste, whose venture fund focuses on startups that make city life better, are only adding to San Fran’s innovation credentials.
“We decided to launch Urban.US as a program that’s focused on founders who are solving city challenges. We formalized the fund aspect of what was originally more of a platform to connect innovators after the first 16 companies we invested in worked out great,” explains the angel-investor-cum-advisor. Today Urban.Us’ portfolio is 20 startups strong, with a particular interest in the intersection between urbanization and climate change. “With urbanization you have challenges around service delivery, from water to public safety, and as you get more people into cities, it gets harder to deliver a high quality service when you consider the financial aspect. As we look more and more at cities as catalysts of climate change, efficiency becomes a big factor,” he continues, and as we discover more of the city, we find that San Francisco is increasingly aware of the challenge faced by urban lifestyles. In April 2016, it became the first major city to implement a law requiring all buildings of 10-stories or less to integrate solar panels. “In a dense, urban environment, we need to be smart and efficient about how we maximize the use of our space to achieve goals such as promoting renewable energy and improving our environment,” said San Francisco Supervisor Scott Wiener in a statement to the press.
The legislative move comes as part of San Francisco’s bigger plan to power the city with 100% renewable energy by 2020 – a tall order for most cities, but with a population like San Francisco’s, not to mention their neighbors in Silicon Valley, sustainability and solution-seeking are concepts very much celebrated. The San Francisco Green Business initiative in fact goes one step further and rewards clean technology businesses with payroll tax exemptions. In a city historically known for the finance industry and now synonymous with technology and progressive ways of doing business, it’s no surprise it’s one of the top destinations for millennial talent, and it’s even less of a surprise that their income almost doubles the national median. Pair that with the fact that the city’s residents are among the most highly educated in the country, and San Francisco becomes fertile ground for innovation in terms of both adopters and creators. However, this demographic, while plying the city with creativity and ingenuity, has also come at a cost: real estate prices in San Francisco are the highest in the entire US, cost of living is inflated and homelessness is perpetuated.
“Homelessness in San Francisco has been around for four decades. It’s a culmination of 40 years of policies, decisions and sociocultural shifts,” explains Manish Goyal of the San Francisco Office of Economic and Workforce Development. At last count, the total number of people living on San Fran’s streets was just under 7,000, which is a relatively small figure, but the problem is more pronounced due to the density of homeless persons in a geographically small city. “Add to that the fact that our services for these communities are not hidden like in many other cities, and the problem is a lot more visible.” In March 2016, several City Supervisors even called for homelessness to be considered a ‘state of emergency’ and in the 2016/2017 budget, Mayor Edwin Lee earmarked some $32 million to dealing with the problem, including the establishment of the Office of Homelessness and Supportive Housing. The department will launch in July 2016 with an annual budget of $165 million. “This will bring together under one roof the multitude of city services from outreach – including the Homeless Outreach Team – to shelter and supportive housing,” the Mayor’s Office said in a statement.
In fact, a recent study, which tracked 1,818 homeless adults in the city who were entered into supporting housing programs, has shown that San Francisco’s commitment to solving the issue is beginning to pay off: initially costs were high, as they received long overdue healthcare and other crucial services. Over time, however, the expenses declined by a massive $31.5 million or 56% of what the city would usually pay without settling affected people into homes, between 2011 and 2015. This is due to many factors including a dramatic drop in jail costs, less use of homeless services and less emergency healthcare. Dubbed the Housing First Policy, this initiative and the officials behind it understand that the city and taxpayers will undoubtedly incur costs but have proven that decisive action in housing homeless populations is better for the city in the long run.
Meanwhile, the city is strengthening important aspects of liveability for all its residents: with an increasing demand for walkable, public spaces among the national millennial demographic, San Francisco stands apart for its access to parks. In fact, a recent ranking by the Trust for Public Land placed it top of all USA cities in terms of park accessibility, with most residents living just 10 minutes walking distance from their nearest green space. A recent and controversial pilot program by the San Francisco Parks and Recreation Department that obliged picnickers looking for a patch of grass at Dolores Park to make a reservation for $33 to $260 (depending on group size) was scrapped. Its cancellation is a testament to the strong-willed and historically active civil society in San Francisco – over 11,000 signatures were collected in a petition against the scheme, which also saw opposition within City Hall. “I’m very concerned that not only does this limit access to a popular park; we could well be on a slippery slope where the very wealthy are the only ones who can fully enjoy public spaces in San Francisco. We already have a growing income gap between the ultra-wealthy and everyone else,” San Francisco Supervisor Jane Kim said in a statement. “We shouldn’t have a park gap too.”
To close the income gap, or at least create equity of opportunity, the City of San Francisco has several schemes in place to strengthen small businesses and foster an entrepreneurial spirit outside of the headline-dominating technology industries. In 2015, small business loans issued by the city and associated entities reached over $11 million, including nearly $4 million from the Emerging Business Loan Fund which is earmarked for “high impact businesses and projects with the potential to increase economic activity in San Francisco as well as create jobs for low to moderate income individuals.” Meanwhile, the Invest in Neighborhoods scheme works with commercial strips of lower income neighborhoods to lend a listening ear and provide small grants and simple fixes, such as cleaning services, store façade improvements and spaces for community meetings, as well as marketing for the areas. “For every new person that visits a blighted, or previously-blighted area, that’s a new opportunity for job creation or sales,” says Goyal. “Another invaluable service Invest in Neighborhoods provides is just access to information. Something as simple as connecting local entrepreneurs with legal assistance, or explaining permits and licensing procedures has been very impactful.”
“It’s crucially important for us that the companies we invest in focus on connecting communities with each other and with the government, and enabling governments to best serve their communities,” says Urban.US’ Baptiste. “There’s certainly been an upward trend of governments embracing emerging technologies and solutions, and San Francisco’s Entrepreneurship-in-Residence program is a great example.” A 16-week voluntary scheme, the program embeds innovative startups within various city departments to foster innovation. “San Francisco is home to the world’s greatest entrepreneurs, the ones who have ‘disrupted’ numerous industries, and we are bringing those same disruptive technologies to improve delivery of City services for our residents. The Entrepreneurship-in-Residence program brings together government and startups to explore ways we can use technology to make government more accountable, efficient and responsive,” explained Mayor Edwin Lee. “We’re seeing so many cities now hiring Chief Digital Officers and Chief Technology Officers, marking a real shift in government thinking,” concurs Baptiste. “There’s still some challenges regarding of bureaucracy of government and the life cycles of startups, but the intersection between the two is definitely growing.” Meanwhile, Code For San Francisco, the local chapter of Code for America – a non-profit organization which leverages the tech talent of some of the country’s best programmers, coders and hackers to improve civic engagement and city functions – is among the most active members. It’s probably no surprise that San Francisco was in fact the birthplace of the whole movement.
In a bid to ensure that the Web 2.0 boom being experienced in San Francisco and surrounding areas isn’t as exclusive as the dotcom bubble that preceded it, the city is coming together in unexpected ways. Code Tenderloin is a four-week workforce development course for the homeless that, alongside coding classes, provides transportation, clothing, legal assistance and soft skills training for those looking to enter the job market. Created by a previously homeless veteran Del Seymour, the program is funded by his Tenderloin Walking Tours venture: a unique cultural experience he tailor-made to show visitors to San Francisco the disparity between the high-flying tech companies that occupy the rejuvenated neighborhood and the very places he slept on the street. So far, 42 people have graduated from Code Tenderloin and 37 of them have been placed in full time jobs, thanks to partnerships with the surrounding tech community including Zendesk, Spotify, Twitter, Zoosk, Dolby, AirBnB and Yammer (Microsoft). Meanwhile, Mission Bit provides free coding classes for high school students living in urban poverty in the city, enlisting professional programmers in a bid to eliminate the tech divide that’s becoming more and more apparent in an economy like San Francisco’s.
Given its unique make-up, and consequently, its unique challenges, San Francisco is following the private sector’s lead in looking for innovation to solve problems. However, it’s clear that the tech industry’s efforts alone are not enough, and thus a special synergy has evolved in San Fran where the private and public spheres are reliant on each other to contribute to a better city for all. In late May 2016, Mayor Edwin Lee reiterated the notion that one party alone cannot be tasked with solving city problems, announcing a $6 million investment to support San Fran’s nonprofits including an unprecedented $4.25 million to create a Nonprofit Space Investment Fund for the acquisition of permanent affordable space, $1.45 million to launch a Nonprofit Space Stabilization Program to address nonprofit sustainability, and $295,000 to support planning and evaluation for long-term partnerships such as program expansions or shared administrative staff. “Nonprofit organizations are the backbone of our City, and I am proud to invest $6 million to help a broad spectrum of groups stay and succeed in San Francisco,” said Mayor Lee. “Our residents, particularly our most vulnerable, depend on San Francisco nonprofits for services, compassion and inspiration. That’s why I am committed to creating permanently affordable space and investing in the long-term success of these organizations.”