Should Tech and Crypto Innovators Avoid San Francisco?

San Francisco has been a tech hub for decades. The city is home to many leading crypto companies. Ripple, Coinbase, Solana Labs, Oasis Labs, Anchorage Digital, Venture Aviator, The Black Box and CoinList all reside there. But its reputation is in a downward spiral as heinous crimes make headlines. Some even question whether officials are looking the other way in the face of surging crime.

Just last week, Bob Lee, the founder of CashApp and former CTO of Square was fatally stabbed in a neighborhood where many crypto industry players do business.

Elon Musk promptly rebuked San Francisco’s mayor and police department on Twitter for their handling of the city’s crime rate. He called the recent violence “horrific.” 

The Stats on Crime and Cost of Living

If it feels like crime is on the rise post-COVID, that’s because it is. But that is not the whole story. Violent crime in San Francisco had been waning leading up to the pandemic. It went lower in 2020, but has since risen by 7.5%. According to the SFPD, violent crime includes homicide, rape, robbery, assault, and human trafficking. 

Bob Lee’s death appears (based on the facts we have) to be a random act of violence, and it seems such crimes are on the rise again. Data shows that homicides and assault have reached pre-pandemic levels. Meanwhile, rape, robbery and human trafficking are down.

San Francisco has had a notoriously high cost of living for decades now. In fact, many people who work in San Francisco can’t even afford to live there. They commute. But lately, some workers have left the city for other reasons.

“Especially in recent years, those who live outside of San Francisco are likely doing it because of preference rather than affordability,” Zac Clark, founder and Executive Director of the nonprofit HomeMore Project, told BeInCrypto. “It is a unique economic model where so much of our revenue comes from tourists and people temporarily living in San Francisco for work,” he added.

Crime Not Contained by Neighborhood

San Francisco is a relatively small city. It stretches over an area of 46 square miles. Anyone who has walked its streets knows how fast one neighborhood morphs into another. “In a city as small as San Francisco, there is tremendous overlap in the ‘crime-ridden’ areas and areas where crime may not be as prevalent,” Clark said. “However, due to this close proximity, this hypothetical overlap occurs more often than anywhere else.”

Naturally, police presence may increase in neighborhoods with high crime rates. Unfortunately, that will not necessarily stop attacks from happening in adjacent spaces.

“Bob Lee was stabbed in an area some top global companies call home,” Clark said. “If it can happen there to him, it can happen to anyone.”

San Francisco and Tech

Since the Industrial Revolution, people have moved to cities in the hopes of making a better life for themselves. If the promise of success comes with a good chance of harm, people might rethink where they go. Furthermore, no business wants their success story to be surrounded by bleak headlines. But crime isn’t the only reason ambitious companies might want to avoid San Francisco.

Back in 2018, voters passed Proposition C. The new policy taxes the wealthiest corporations in the city and puts those funds toward services for the homeless. While well-intentioned, its effects leave something to be desired. 

At the time, Jack Dorsey was outspoken about how the tax did not take differences between businesses into account. He wrote on Twitter that the tax would disproportionately affect fintech startups. “Taxes would grow at rates multiple times our adjusted revenue, which no company can sustain,” he added. 

But according to the San Francisco Chronicle, the city has spent only a quarter of the funds raised as of 2022. Clark started his non-profit in the wake of the pandemic, two years after the city adopted Prop C. Clearly, the problem persists. And the only effect of the tax seems to be undue hardship to business.

The Future of Innovation in San Francisco

“San Francisco has continuously damaged its reputation over the years, from tech and crypto leaders to the mom-and-pop store serving homemade food on the street corner,” Clark said.

The future of San Francisco’s tech and crypto industry is uncertain until it can tackle the crime crisis head-on. “It will be quite some time before San Francisco bounces back from this down period,” Clark concluded. “I have said for years that if San Francisco fixes a few things, it will be the world’s greatest city,” he added. 

Until then, tech companies and their customers must remain vigilant and aware of the dangers in this once vibrant tech hub.