Is Narcissus also a success story?

In sharp contrast with its arch-rival, Los Angeles, San Francisco historically has won plaudits from easterners. Writing in his 1946 landmark work, Inside USA, John Gunther compared “tranquil and mature” San Francisco with LA, a city he loathed as “the home par excellence of the dissatisfied.” The City by the Bay, he wrote, “possesses a incomparable quality of charm” unsurpassed by any American city.

But no group extols San Francisco’s virtues more than San Franciscans. Indeed when journalist Neil Morgan wrote about the place he labeled it “Narcissus of the West.” Perhaps nothing exemplified this self-reflecting modality than the old tendency to refer to the place simply as “The City,” as if, in real terms, there was no other.

Over the past few decades, this combination of urban charm and narcissism has transformed San Francisco. The city I got to know as a young journalist in the early 1970s working for the alternative weekly San Francisco Bay Guardian was already changing. Areas once habituated by old-fashioned bohemians (i.e., those without trust funds) – North Beach, Union Street – already were being displaced by new age enthusiasts, investment bankers and young corporate executives.

But still, in the 1970s, San Francisco remained very much a city of neighborhoods, each one very much a world unto itself. If the east face of the city – North Beach, Russian Hill, Downtown, Chinatown, Fisherman’s Wharf – was being transformed into a kind of high-end theme park, much of the western ends of the city, as well as places such as the Mission and Potrero Hill, remained bastions of ethnic diversity, middle and working class families.

As our articles editor Andy Sywak, who is also editor of the Castro Courier neighborhood newspaper, points out in his first rate analysis, this San Francisco still exists, although it may be holding on for its life. Demographically, San Francisco has changed in ways that may well signal the future for at least a series of American urban geographies – Portland, Seattle, Boston, DC and even Manhattan come to mind – that although quick to celebrate diversity are in many ways becoming increasingly less so.

In some ways, this may be the curse of too-good looks. Ever since Haight-Ashbury caught on as the epicenter of the 1960s hippy movement, San Francisco has lured ever more affluent and well-educated people. In the process, the price of real estate has skyrocketed, making the city virtually unaffordable for almost everyone outside the upper middle class. Once known as a rough, brawling union town, San Francisco likely now boasts the highest percentage of people living off wealth – rents, dividends, interest – of any major American city.

A recent study by the Public Policy Institute of California showed that virtually every income group from households making $50,000 to $150,000 a year dropped between 2002 and 2006. In contrast, households making between $150,000 and $200,000 surged 52 percent and those earning even more expanded by 40 percent. Housing prices, although slightly off last, have more than doubled since 2002 to nearly $800,000; it takes an income near $200,000 to afford a median priced home.

This upper class shift has fostered, indeed encouraged, a strange form of ultra-liberal politics. Perhaps no major American city wears its leftism on its sleeve more than San Francisco. When it comes to imposing “green” controls and standards, as well as any embracing gender and cultural liberalism, The City is not to be outdone.

But such lifestyle liberalism should not be confused with traditional urban reform, which focused on how to expand the benefits of urban life and economy to broad sections of the population. To maintain and even expand this largely childless city – San Francisco has the lowest percentage of children per capita of any major American city – major reform of city institutions, notably schools, no longer commands priority. Instead, efforts can be concentrated in consolidating what University of Chicago urban theorist Saskia Sassen calls “the urban glamour zone.”

In this sense, San Francisco is a place that combines the characteristics of an exclusive resort, with extremely expensive real estate and concentrations of high-end amenities, with an exclusive economy based on elite services fields such as finance, media and design. Even in hard times, its real estate economy can be propped up by purchases by the wealthy, both full and part-timers, who wish to imbibe The City’s urban charms.

Increasingly – and likely more the case in the future – these wealthy people (and their progeny) will settle in San Francisco more for lifestyle than purely economic reasons. Instead of nurturing the traditional middle class, the city can depend on the kind of young temporary sojourners (remarked upon by our Adam Mayer, who recently moved back to the Bay Area) to provide relatively low-cost skilled labor as well as the legions of waiters, toenail painters, dog walkers, performance artists and the like.

Such an urban economy, of course, also requires people willing to do very hard labor – busboys, janitors, cleaning ladies, gardeners – many of whom will have to commute from distant locales to service the “needs” of the cognitive elites. The one impoverished constituency tolerated in the new order, the homeless, will incongruously now share the glamour city with the glitterati. This is why, notes the great California historian and San Francisco native Kevin Starr, The City has become “a cross between Carmel and Calcutta.”

Can such a society work, and, if so, is its model applicable elsewhere? Certainly you must be a place with inherent attractions to the wayward and affluent. Seattle, Portland, Boston as well as Manhattan could also evolve in this direction, and may already being doing so. It’s difficult, however, to see such an economy working out so well in other less powerfully attractive urban centers, particularly those with large concentrations of poverty.

But for a lovely place like San Francisco the trajectory is not entirely negative. As the country’s population expands to 400 million in 2050, there will be a growing, albeit small niche, for high-cost places that appeal to those with requisite high-end skills or at least the right heredity.

We can see this with the economy. Even as it has lost corporate headquarters, manufacturing and other generators of middle-class jobs, San Francisco’s appeal to high-end workers and as an entertainment center – Dr. Starr dubs his hometown “a theme park for restaurants” – has helped secure its position as kind of PR office, party town and alternative hip location for the far less charming, if more productive, nerdistan further south.

San Francisco already has twice successfully hitched itself to the Valley’s surge, first in the late 90s dotcom surge and more recently in the Google-centric 2.0 boom. The city’s total jobs likely have not recovered their 2000 levels, but there has been a notable improvement over the last two years.

The future progress, however, may prove more difficult. Although the administration of Mayor Gavin Newsom has trumpeted what it claims as a major economic as well as demographic turnaround, the inevitable popping of the 2.0 bubble could wreak some damage. Already layoffs in the hard-hit financial sector – some of it tied to the venture capital industry – last quarter saw tenants give up almost a Transamerica Pyramid’s worth of space.

The picture is at least murky on the demographic side. Yet although state population numbers record a return to population growth, the census numbers, which we rely on at NG, are less impressive, recording a loss of roughly four percent since 2000.

These competing claims will not be fully resolved until after the 2010 census. But population growth may be somewhat beside the point. San Francisco’s emerging identity is not as a bustling, growing city that attracts middle class families. Instead, its destiny – or karma as locals may prefer to see it – may be to lure the wealthy, the well-educated and talented to the communal self-celebration that long has stood the trademark of the place they call The City.