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The Street
The Street
Luc Olinga

Elon Musk Puts Huge Pressure on San Francisco

San Francisco didn't need that.

The American tech capital is currently going through a deep identity crisis, since the end of the restrictions put in place to limit the spread of covid-19.

These restrictions have caused two big issues. 

On the one hand, they have amplified the homeless crisis that has affected the city for many years, and its corollary, the drug epidemic linked mainly to Fentanyl.

The city has nearly 8,000 homeless people out of a population of around 835,000, which works out to approximately 1%. This situation causes residents and businesses to complain about tent camps set up in the streets, dirtiness and vandalism.

Public exasperation led to the recall of three progressive members of the San Francisco Board of Education last year. The district attorney was also ousted.

San Francisco Is Emptying

On the other hand, the lockdown has caused many tech employees to move out of town, to either greener states or states with a lower cost of living.

Many of these employees no longer want to return to the office, forcing tech companies to adopt a hybrid model of work. Most tech companies are also in an austerity phase, which includes the closure of many offices, especially in areas where real estate is expensive.

As a result, downtown San Francisco, which was home to a large number of tech companies, remains empty, despite the end of the lockdown.

Office vacancy in San Francisco is among the highest in the nation – with space in the city the quickest to empty out, according to Savills, a commercial real estate firm. The city’s vacancy rate grew from 32.1% in the fourth quarter of 2022 to 32.7% in the first quarter of 2023. It's a new all-time high, according to Savills.

To measure the extent of the problem, you have to compare it with the rest of Silicon Valley: the office vacancy rate in the Silicon Valley stood at 23.1% in the first quarter, comparer to 22.7% in the fourth quarter of 2022.

"We expect office availability (in San Francisco) to continue to increase in 2023 as the slowdown in the technology sector persists,” Savills said in the report.

These profound changes that are shaking up the mecca of tech have been worrying some of its most eminent figures for many months. 

Elon Musk, the CEO of Tesla TSLA, is among those who have repeatedly sounded the alarm about this depopulation of San Francisco. The billionaire left Silicon Valley at the end of 2021 to settle in Austin, Texas. He also moved Tesla's headquarters from California to Texas. 

But Musk bought Twitter for $44 billion last October. This deal forces him to spend more time than he would probably like in the area. Twitter is headquartered in downtown San Francisco just blocks from the city's notorious Tenderloin district. The Techno King recently decided to move Tesla's AI operations headquarters to Silicon Valley.

A Tech Executive Stabbed to Death

The billionaire, who has moved to the right politically, believes that San Francisco's current problems are tied to its identity as a land of progressivism. He believes that these values ​​are one of the reasons that have accelerated the challenges the city is currently facing.

The latest development is likely to reinforce his point of view and cause even more damage to San Francisco. Bob Lee, the creator of Cash App and former Chief Technology Officer of Jack Dorsey's payments company Block, formerly known as Square, was killed in a stabbing in San Francisco, on Tuesday, according to multiple sources.

On the morning of April 4 at 2:35 a.m., the San Francisco Police Department (SFPD) responded to a report of a stabbing in the city's SoMa neighborhood. According to the report posted on the SFPD website, officers arrived at the scene to find a 43-year-old male victim, apparently suffering from stab wounds.

Officers provided first aid to the man, who was taken to a local hospital with life-threatening injuries. The victim succumbed to his injuries, the SFPD reported, noting that the department is investigating the incident as a homicide.

Shortly after the incident, NBC Bay Area reported that the stabbing victim was Bob Lee. This was later confirmed by crypto platform MobileCoin, where Lee served as Chief Product Officer.

Prior to joining MobileCoin, Lee worked at Google, helping to lead the team that developed the Android platform. He then joined Block. 

Lee was also an angel investor. According to his LinkedIn profile, he has invested in companies such as SpaceX and Clubhouse, among others.

His sudden death shocked the tech community.

Shocked, Musk decided to put pressure on the local authorities and in particular on the District Attorney.

"Very sorry to hear that," the billionaire said in reaction to Lee's death. "Many people I know have been severely assaulted."

He continued: "Violent crime in SF is horrific and even if attackers are caught, they are often released immediately. Is the city taking stronger action to incarcerate repeat violent offenders @BrookeJenkinsSF?"

'Bringing Justice'

"Protecting public safety and holding violent and repeat offenders accountable continues to be a top priority for my administration," District Attorney Brooke Jenkins said in an email statement. "We work closely with the San Francisco Police Department and bring forward charges when arrests are made and there is enough evidence to prove beyond a reasonable doubt to a jury that the defendant is guilty."

She said that she "directed [their] staff to ensure that cases are vigorously prosecuted."

"No one who commits a violent crime, or who is a repeat offender are receiving overly lenient plea deals from my office," Jenkins added. "Every day, lawyers in my office fight for justice in the courtroom for murder victims and other victims of crime. We present arguments in court to detain individuals that present clear public safety risks - most especially repeat and violent offenders, and will continue to do so."

Referring specifically to Lee's fatal stabbing, Jenkins said that she and her office "are committed to bringing justice for this senseless act of violence."

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