All language subtitles for San.Francisco.2.0.2015.1080p.WEBRip.x265-RARBG3_English

Brown: 2,500 years ago,

a Greek poet
named Heraclitus said

no man steps into
the same river twice.

And one might even say

no one visits
San Francisco twice

because it's changing.

Pelosi: Do you think
it's changing for the better?

- You know,
that's like saying,

"Is getting older
for the better?"

It's inevitable.

[intro to Village People's
"San Francisco"]

Pelosi: This is San Francisco,

the golden gate to America.

This paradise,
born of the gold rush,

is my hometown.

It's the place where

all my childhood memories
still live.

But you don't have to be
from here

to know that San Francisco
is a pretty special place,

and not just because
of its unique beauty

but because
of its long tradition

of embracing nonconformity.

- ♪ It's a city
known for its freedom ♪

- ♪ Freedom ♪

- ♪ Cycles shining bright ♪

[tinny drumbeat]

Pelosi: San Francisco

has always attracted
special people--

mavericks and bohemians--

and it's always had
a rebellious streak.

In the 1920s,

it even passed its own laws
against Prohibition.

[jazzy music]

In the 1950s, it was home
to the beat generation

of Kerouac, Ginsberg,
and Ferlinghetti.

In the 1960s,
of course,

it gave birth to the hippies
and flower power.

And in the '70s,

it was the champion
of the gay rights movement.

And it's that sort of freedom
and spirit of antimaterialism

that we think of
when we think of San Francisco.

But now...

- [screams]

[rumbling and crackling]

Pelosi: Now people are saying

that that San Francisco
that we know and cherish

may be doomed.

- It's the end
of the world!

[screams]
It's the end of the world!

Pelosi: No,
it's not the earthquakes,

but it is
tearing the city apart.

This is an invasion--

the IT invasion.

- Where do they come from?
- I don't know.

Pelosi: It's the techies.

male announcer:
They come from another world,

bringing a new dimension
in terror.

Pelosi: And they're coming
from everywhere.

- You're in danger!
Flee!

Pelosi: And it may be too late
to stop them.

- Can't you see?

They're here already!

You're next!

[dramatic musical flourish]

[laid-back music]

Pelosi:
Good old San Francisco,

the counterculture capital
of the world,

is in the middle
of a pretty drastic makeover.

Like many great cities
around the world,

San Francisco's being forced
to reinvent itself.

Everywhere you look,
you see cranes

building luxury
high-rise apartments.

And in neighborhoods
all over town,

the shells of the old houses

are hiding new expanded
and retrofitted palaces.

These are the homes
for a new generation

who've been transforming
this town into a power city.

But as the march of progress
pushes forward,

the question is,

will some be left behind?

[upbeat techno music]

San Francisco is now

the world's leading
tech paradise.

Thousands of tech firms
call this place home,

but many of the locals

accuse the new generation
flocking to the city

of being oblivious to
the culture they're displacing.

San Francisco 2.0
is full of tech bros,

hipsters,

yoga yuppies,

$6 cupcakes,

organic juice shops,

and freshly minted millionaires

who all work for
these new Silicon start-ups.

And where do all these
start-up companies come from?

Well, many of them
come out of incubators.

Like nursery greenhouses
or mushroom basements,

tech incubators
are trying to grow start-ups

in buildings all over town.

Hertzog: An incubator is a term

for any kind of program
or space

which accepts start-up companies
and helps them--

helps facilitate their growth.

We've got about
75 different companies

working in this one space.

And they apply to us.

It's an invitation-only space.

So the entire space
is a shared workspace.

Rather than work in isolation,

the teams can
pool together resources,

make as many
serendipitous opportunities

possible that we can.

Pelosi: How did you end up
in San Francisco?

Hertzog: Okay, so one of
the reasons why I moved here

and why people are sort of
flocking here--

and the way
I kind of think about it,

it's almost like
a digital gold rush.

I kept reading company
after company being acquired,

and at the end of
the news article, it would say,

"San Francisco, California,
San Francisco, California."

So after reading
about ten of those,

you essentially say, "Okay,
something's going on here.

"Something's happening here,

and I got to get myself there
to see it for myself."

And I bought
a one-way plane ticket out.

And the first week,
I managed to become

the first employee
at Runway Incubator.

Pelosi: The new media

is literally
pushing out old media.

Yahoo has taken over
three full floors

of the "Chronicle" building--

the town's largest
daily newspaper since 1865.

So what's it like
to be young

working here in San Francisco?

Fortet: First of all,

there's no old people and kids
in San Francisco,

especially in the center.

That shifts your mind.

That means that you're in a--
like, in a young bubble,

and this young bubble
is a place

where everyone
is doing something,

and everyone is doing something
extraordinary.

It's like everything--
every action I take every day

can be improved through an app

or through a new service
or experience,

and everyone in San Francisco
is trying to think about that.

I sit in a chair; how can I
improve that experience?

I order a pizza; how can I
improve that experience?

I order a soda; how I
improve that experience?

Pelosi: In the new
digital gold rush,

the shining lure
is workplace perks.

The tech companies
have engaged

in something like a perk war,

with each firm
having its own array

of happy-making enticements
to bring

the best and the brightest
into their fold.

Mattingly: San Francisco,
Silicon Valley

is really changing
work environments

around the world
for the rest to follow.

Pelosi: How come
everything in Silicon Valley

feels like
my five-year-old's fantasy?

Mattingly: It is.
Because it is.

Pelosi: Don't you
have jobs to do?

What are you doing
playing with Legos?

Mattingly:
We have a games room,

a massage room here.

Around the corner,
we have a music room.

Houston: We've always had
a jam room of some sort.

Our first office
had drums in the corner.

Looked kind of like that.

Pelosi: And it's not just
food and toys.

- If you need something
for your computer--

Pelosi: Need a new component
or software for your computer?

- Need your badge.

Pelosi: Just push a button.

- There you go.

Pelosi: It's free.

Mattingly: Everything here
is free.

It's part of the deal,
part of the benefits deal,

from food to drinks to gyms
to everything you see here.

And everything is provided
to make your work-life balance

good and enjoyable.

Pelosi: What do you see
when you look around the room?

Mattingly: Just happy people.

Loving--love being--
working here.

Just happy people.

This is the future,
without a doubt.

It's the future,
and then some.

[upbeat music]

[jittery string music]

Sahu: San Francisco
is gonna be the place

that'll save America

and eventually the world,

because we would create
the next jobs,

and we would create the next way
people are more productive

than where they are
right now.

And San Francisco presently

is the richest place
in the world,

bar none.

And--and--and we have
about 1/4 of the world's

construction right now
happening in this city.

Pelosi: No way.

Sahu: What we are seeing here
is the early stages

of the phenomenon
that we have seen

all the way
from the Roman Empire,

where we would become
the center of the world.

Pelosi: A steady stream
of young people

with Facebook
and Twitter dreams

continue to swarm
into this center of the world,

hoping to get planted
in an incubator

and, with a little bit of luck,

might end up like this guy--

a multimillionaire

who developed a start-up
from scratch.

How did you get rich?

How did I get rich?

We sold a social network
called Bebo in 2008.

We sold it to AOL
for $850 million.

Didn't fare well at AOL.

Um...

bought it back a year ago
for $1 million.

And now we're redeveloping it
here at Monkey Inferno

to relaunch it.

Pelosi: How come if I've
never heard of your company--

There are all these
millionaires

walking around here
that got rich

off some of these companies
I've never heard of.

- Yeah, I mean,
I am in Silicon Valley,

and I still
meet people every day

that I've never heard
of their company.

Pelosi: So why don't you
just sit on a beach somewhere?

Why are you still working?

Birch: Because it's so boring.
I like projects.

I like having--
setting myself a goal

and seeing
if I can reach that goal.

So we started a club,
a private members club,

called The Battery
in San Francisco.

And we opened the club
primarily because

we thought,
"There's an opportunity.

"No reason
this couldn't create

"a really interesting kind of

social environment
for San Francisco."

Pelosi: So with luxuries

like invited
membership-only clubs

that provide
exclusive opportunities

to socialize and network...

[bell rings]

The tech set
is extending their paradise

beyond the walls
of the workplace

and into the fabric
of San Francisco life itself.

But why San Francisco?

How did all the tech bros
end up here?

Well, it all started
down in Silicon Valley.

People were coming
from all around the world

to work there,

but no one really
wanted to live there.

So the tech companies

started chauffeuring
their young talent

on these luxury buses

to and from where
they really wanted to live:

in San Francisco.

After seeing the dark
double-decker buses everywhere,

it didn't take long

for the wise leaders
of the great city

to wake up and smell the money.

So Mayor Ed Lee
and his advisers devised a plan

to entice the tech companies
to relocate to the city.

By offering tax breaks

to any firm that would
move its headquarters

into a region
around the Tenderloin--

a district known for its
homeless and destitute--

the city lured in
the tech giants,

creating the second gold rush
for San Francisco

and opening the golden gate

for the techies
to build their playground.

Lee: We've got
1,979 tech companies.

I mean, we went from 9.5%
unemployment rate

to 5.2% in less than two years.

So that's 42,500 new jobs.

[crowd murmuring indistinctly]

Pelosi: One of
the chief architects

of the so-called
Twitter tax break--

as it came to be known--

was billionaire investor
Ron Conway.

Known as the Tech Godfather,

his investments
almost single-handedly

turned companies
like Google and Facebook

into corporate giants.

- Not me single-handedly,
not at all; it's--

Pelosi: But you're
the money guy.

You're the guy that
gets all these dot--

all these start-ups--
you're starting up--

you're the guy who's
starting up all the start-ups.

- Well, I'm funding
a few of them,

some of the ones that got big.

Twitter and Square
are huge companies.

Pinterest is going to be
a huge, huge company.

Pelosi: But you're
the mastermind behind this.

You're the consigliere
that got the mayor

to roll out the red carpet
to the tech companies.

- Well, the mayor--
the mayor--

I didn't have to convince
the mayor of anything.

Ed--Ed Lee
has a lot of common sense.

It's Ed Lee who did this.

It's not Ron Conway.

Pelosi: San Francisco
is booming.

I barely recognize
my hometown now.

Conway: It's called progress.

That's called progress,

and when you bring in these
tech companies who innovate,

the by-product is,
the entire community

is gonna make progress.

Now, we--
we do create problems.

San Francisco
is only six square miles, and--

and that's why we have
an affordability--

a housing affordability issue

that we have to deal with,
but--

but we are dealing with it.

Pelosi: So there's
trouble in paradise.

They call it "a housing
affordability crisis,"

which is the politically
correct way of saying

that you have so many
well-paid techies

moving into
this small little peninsula

that if you don't have

a billionaire
venture capitalist backing you,

you can't afford to live here.

Van de Mark: The price
of this property,

if I hadn't touched it,

has gone up more than 50%
in three years.

So if I had not touched it,

I could turn around today
and sell it

for probably 1.65, 1.7.

With this completed,

this remodel done,
it's arguably worth 2.6.

It could even be worth 3.

So this house should rent,
when it's finally completed--

and it'll only be
about 1,400 square feet.

But it'll rent
for about $10,000 a month.

Big, huge television
recessed in the wall here.

Subwoofer in the floor.

Speakers in the ceiling.

Electronic shades
for the windows.

Hit a button.
Bzzzz!

This is the boom cycle
of this city,

which is a city that has
a history of booms

and then lulls.

Not really busts
but booms and lulls.

And so we've got a boom.

We've got a bona fide boom.

It's the internet 2.0 or 3.0

or social networking,
whatever you want to call it.

But it's super exciting.

[soft string music]

Pelosi: And now
that the traditionally

desirable neighborhoods
are full or unaffordable,

the well-heeled hipsters
are taking over

the formerly
less desirable areas.

The infusion of new money

is pushing the lower income
residents out.

Hill: I live in
the Hunters Point area.

I'm being evicted

out of my home that
I've been in for 27 years.

I've grown up in this home.

Hunters Point
is not much of a good area,

but it's home to everybody

that's been there
for so long.

And all these companies
coming in

and taking over our area,
it's a little difficult,

'cause we have nowhere to go.

Where do we go?

Where do we stand

as a people
in our own neighborhood

where we're getting
pushed out of

because of these large
billion-dollar tech companies?

Pelosi: As this drama
plays out,

a new kind of segregation

between rich and poor
is emerging.

Hill: So this is where they're
taking all the projects down

and building new apartment
buildings for other people.

And basically--
this is basically the before.

They haven't tore it down yet,
but they're getting ready to.

And this is the after now,
which is...

we look like we're in
Beverly Hills somewhere now.

Like, it's crazy.

They're moving all the--

you know,
the rich white people in,

and it's taking everybody
out of they homes.

And I'm pretty sure they're
not gonna make it available

for people like us
to live over here,

so it's kind of like
throwing it in our face.

Kind of like, "Ha, we're
building this building here,

and you can't stay here
'cause you can't afford it,"

all in our face.

Pelosi: Look,
there's Candlestick Park.

Isn't that going away too?

Hill: Yeah, I don't know how
long it's gonna be there for.

They're--they're planning
on tearing it down right now,

because the Niners
have moved to Santa Clara,

into the tech valley.

So now since
the tech companies came in

and moved it out
and moved it over there

by where they
want it to be at,

you know, it's for them now.

Like, that's--
their Niners is theirs now.

It's not even ours anymore.

And we're gonna miss
everything about the stadium.

They're taking something
from us that's very important.

Pelosi: I don't think
that the tech companies

stole the 49ers.

I think that the 49ers
went where the money is.

Hill: They did.
Indeed, they did.

All of it is about money.

All of it.
That's all it is.

They don't care
about nobody else.

They don't.

They took our history from us.

Pelosi: Of course,

not all history
is worth saving.

[soft string music]

This decaying steel yard
in the district called Dogpatch

is an eyesore.

And it's being torn down

and replaced
by a development project

that does have
some affordable housing.

But this is fast becoming
a neighborhood

those new lower-
and middle-income residents

will not be able to afford.

[upbeat music]

To cater to all the new money
moving in,

premium cocktail bars,
artisan foodie restaurants,

and upscale boutiques
are popping up

and pricing the locals
out of their own community.

[upbeat music]

Talbot: You know,
a city is a fragile thing.

It's sort of
a fragile alliance,

a fragile pact that people make
with each other

to live together,

people from
all different walks of life.

That's what makes a great city.

If the current trends continue,

where the wealth gap
is exploding at a--

at a much quicker rate
than any other city in America,

then the artists
and the writers,

the musicians,

the people who made this city

the kind of attractive magnet
that it is,

that--they're--
that's all gonna go away.

San Francisco will become
a bland, monotonous,

tech-oriented city.

Pelosi: This sweeping away
of diversity

is happening all over town

but can be felt most acutely
in the Mission district,

where the tech invasion
is uprooting immigrant culture

that's been here for decades.

Hernandez: The heart
and soul of San Francisco

is being actually
ripped out of the city.

You have teachers.
You have policemen.

You have firemen.
You have janitors.

You--the working class
of San Francisco

is being pushed out.

Landlords are really,
really greedy.

You know, they want more money.

They want to cash in
on this boom

of technology and all the money
that's coming in.

There's a place
on Valencia Street

that charges 56 bucks
for a hamburger.

[laughs]

Pelosi: So who buys
a $56 burger?

Hernandez: It's not us.

It's all the techies
that come here.

So most of this whole block,
families were living there.

Families were living there,
families, families.

Right now, you would have
this block filled with children

playing out in the street.

There ain't no children
right now playing.

You know,
if you're gonna live here,

you got to be part
of this community.

Most of the people who
moved in, they don't say hello.

They don't talk to you.

And I talk to all of them.

You know, I always--

I make them say hello
in the morning.

I say, "Good morning,"
or I say, "Buenos días,"

you know, just to kind of
break that ice.

And then the other thing
is our murals.

I mean, we have
some beautiful murals

here in the neighborhood.

Some of these businesses
that have moved here

have either painted over

or removed some of our murals.

A lot of the murals
are cause related.

People think
they're just murals,

but if you look at,
for example, this mural,

you have Cesar Chavez
on there.

You know,
you have Martin Luther King--

people who have contributed

to the betterment
of the human race.

Pelosi:
San Francisco's murals

have always reflected

the struggles in the community.

And the pain they feel today
is visible on the city's walls.

- There's my
favorite one right here.

You do know we were also
almost evicted, right?

But, you know,
we fought it.

Well, one day, my mom--

you know, she doesn't know
English well.

So she, like, showed me
this letter.

And, you know,
I was reading through it,

and I didn't understand it.

But from the gist that
I picked out of it is that,

"Hey, you know,
one year from now--from today,

"you know,
pack your things and go.

"Here's a--
here's a nice check,

"you know, for you
to, like, you know,

find a new place somewhere."

Pelosi: So how much were you
offered to find a new place?

- Oh.
[scoffs]

He offered me,
like, less than 2 grand,

which doesn't cover even,
like, moving expenses.

You know,
it's barely enough to, like,

even find a place
in San Francisco

or, like, even, like,
in the areas around it.

It was garbage money, right?

Pelosi: So you were offered
$2,000 to leave your home?

- Yeah, he kind of,
like, gift-wrapped it too,

like he was doing me a favor,
you know?

That's pretty much how
all these businessmen see it.

You know, it's like, you know,

"I didn't cause a problem,
but I can,

you know,
somehow profit from it."

Not, "How I can help--

not how I can help
the situation,"

but, "How can I benefit myself
from it?"

You know,
people came here in droves,

just, you know,
expressing their own ideas.

You know, for free!

Crazy, right?
You know?

Sharing your art, sharing
your expression for no money,

just for the love of it.

The city is being taken over

by the one thing
I always thought the city hated,

and that is--
and that is just money.

And that's what these guys
are trying to do.

They're trying to, like,
take that away.

They're trying to say, "Okay,
how can we make money, period?"

You know, I was always
fascinated by,

you know, the business angle
of San Francisco

and, like, the art angle
of San Francisco

and how they always
kind of, like, clash.

You know, it's kind of like--

you know, it's kind of like
a paradox, right?

But they, like, fit so well,

like yin and yang;
it's beautiful.

But now it's like--
it's more, like, unbalanced.

It's--it's become probably
one of the most expensive cities

in the whole freaking world.

A city where it
just revolved around arts

and just the beauty
of imperfection

is being lost to--to money!

[crowd chanting indistinctly]

McElroy: The gap
between the rich and the poor

is growing at
a very unprecedented rate,

not necessarily because
the poor are getting poorer

but because the rich
are getting richer.

And we are in an eviction
epidemic right now.

These are the three types
of no-fault evictions

that are used
to displace tenants

for no fault of their own.

Pelosi: What
is an Ellis Act eviction?

McElroy: An Ellis Act
eviction is when a landlord

decides to exit
the rental market,

and what they do is,

they speculate on a building,
buy it.

Often within the first year
of ownership,

they give the tenants--

who are often
rent control tenants--

Ellis Act notices.

And that means
that they have to vacate.

It's very hard to fight
an Ellis Act eviction.

It's unfortunately legal.

It's a state law
that supersedes

any city law or ordinance.

Ellis Act evictions are up
175% over the last year.

No-fault evictions in general
are up 115%

over the last year alone.

These huge corporations
that are tech corporations

are basically just
selling San Francisco

to their employees
as an added benefit or perk.

So, you know, you can work
in Mountain View or Palo Alto

and get to live in this cool,
hip city.

And of course,
landlords are taking advantage

of the money that tech
is bringing into the city

to evict longtime residents
for no fault of their own

to create housing that people
much more affluent can afford.

We're seeing this happen
again and again

with these people
who are very vulnerable,

who are very reliant
on their neighbors

and communities
that they've built

throughout their lifetime
being forced out

and basically
just put into the street.

Agnos: I, as a former
mayor of San Francisco,

could not afford
to live in my house

that I bought in 1972.

It's too expensive,

if I were to try
to buy it today.

And so it is
with every house here.

Look at the young people.
Look at the coffee shops.

Look at all--it's changed

and, with it,
the nature of the population,

because we aren't building
any alternatives

for people
who have traditionally

had an opportunity to live

in what was
affordable housing.

And we want to keep
a place in the city

for the people
who can't afford

$4,200 for a two-bedroom place

or $5 million condominiums.

Pelosi: The space invaders
of San Francisco 2.0

are not only usurping housing,

but, in their quest to put up
mega-story tech towers,

developers are taking over
San Francisco institutions

like the Flower Mart.

The Flower Mart has been

a cornerstone
of the flower industry,

supplying the whole
of the West Coast

for over a century.

Agnos: This is
the San Francisco Flower Mart.

It is one of five
in the country.

It's the second largest
in the country.

It's been here, the origins,
for over 100 years

and in this particular
city block

which it encompasses
for 56 years.

There is no other place like
this in all of San Francisco.

And it's important
that it be here,

because it's part of
the transportation hub

that's necessary for the flowers
to come here

for the wholesalers,
the retailers,

and all of these
small businesses.

The developers want
to demolish all of this,

create high-rise office parks.

Pelosi: Who do you think
is responsible

for the changes
taking place here?

- I don't think
it's the tech companies

that are doing it.

I think it's
the developers that are

reaching out
to the tech companies

that see an opportunity here.

They get with
the tech companies,

and the tech companies go,
"Yeah,

this would
be a great location."

Agnos: Developers see
an opportunity here

to make billions of dollars

at the expense of the heart
and soul of this city.

Pelosi: The developers
will build

their 1 1/2 million-square-foot
tech campus.

The flower vendors will have
to relocate for a few years

during the construction.

And if they survive,
they can move

into the ground floor
of this new high-rise.

So much for flower power.

But at least they have a chance
to remain in business.

In the battle for the heart
and soul of San Francisco,

other small businesses
haven't been so lucky.

- The vice president and
leasing agent for this building

came down here and told me
my rent was going to triple.

When we first started
working down--

When I first started working
down here in 1987, 1988,

there were literally tumbleweeds
in this part of town.

There was nothing down here.

You couldn't
get a cup of coffee.

We were a primary source
of income

for quite a few artists,
including Randy right there,

who's picking
his artwork up now

and, at this point,
has no place else to sell it.

The people getting hurt are
artists, small-business people,

people who can't program
or write code.

You know, San Francisco
is rapidly becoming a tech town

and a tourist town.

There's no--
There's nothing in-between.

There aren't jobs

for the rest of the people
who don't have--

who don't work in either
of those two industries.

Tech--tech has money.

Tech pushes people around.

And when they say,
"We want buildings

and we want this,"

they get what they want.

[somber music]

♪ ♪

Kamiya: It's not about
saying, "Oh,

"these wealthy young
white guys are coming in,

and they are the problem."

The problem is capitalism

and that we live
in a market-driven economy.

[somber music]

♪ ♪

Now, there's a whole nother
element to the techies

that has to be
thrown into this,

which is the cultural one,

which is people complaining,

"They're not
real San Franciscans.

"They don't--
they don't understand.

This is a town
of renegades and mavericks."

You know, the techies
have gotten beaten up a lot

because they're not
giving back to the community.

Pelosi: Do you think
the tech companies

are giving back enough
to the city?

- No, the tech companies

aren't even coming close
to giving back enough.

And I think they're
very vulnerable to attacks,

and they need to wake up
to that reality.

It's not good enough to say,

"We create jobs
and generate revenue,"

though they create jobs
and generate revenue.

They have to find
a--a--a way to be responsible

for the world outside
their doors.

- I am very concerned

with what happens
to all of these young geniuses

who are part of all
these start-ups,

and obviously,

more than 90% of the start-ups
never go anywhere.

At some point,
the angel investors

and all the people who provided
the start-up money will be gone.

And all these young people,

all of whom are talented,
gifted, and what have you,

will be at a loss,
but they'll be in our city.

Will they become
the next group of people

we really have to look out for?

I am really concerned
about that.

Pelosi: Why should
anyone care about

what's happening
in San Francisco?

- San Francisco is a microcosm

for what is happening
not only in the United States

but all over the world.

San Francisco is London.

It is Vancouver.

It is Manhattan.

It is places that are

increasingly desirable
to live in

that are becoming
gated communities.

I think that ultimately,

there is a very
fundamental question

that we all have to face.

We have a tradition
of helping one another,

but as we separate by income
and by place,

as we segregate geographically

according to
our pocketbooks and wallets,

as we lose contact across
classes with each other,

the question is,

can we maintain a sense

of being one people?

I'm worried about a--
a city that is becoming

uniformly wealthy

and out of reach
and out of touch.

- And that is the--

the anomalous character
of this new internet culture.

And it is creating
winners and losers

and exacerbating the gap

between the
rich and the poor

and the middle class.

And that is a big
political problem,

and that's not
gonna be solved

just in San Francisco

or even primarily
in San Francisco.

It's gonna challenge the country

to make the kind of rules
that will help

cushion the untoward
side effects

and create a more
egalitarian society.

[somber music]

Pelosi: So now
the question is,

what's the government's role
in all of this?

This is turning
into a conversation

that goes deep
into the nature of capitalism.

[somber music]

♪ ♪

Tech companies say
they don't have to play

by the government's rules

because they're not
a part of any industry.

They're only creating apps

that bring people together
and help them share.

In fact, they call it
the sharing economy,

which kind of sounds like
a bohemian '60s hippie concept.

Reich: Well, the expression

"the sharing economy"
sounds wonderful.

I mean,
who doesn't want to share?

I mean, I--
I think it's delightful

to conceive of
people sharing their cars

and their homes
and everything else,

but look more closely.

You're taking more and more

real estate
off the rental market.

That means you've got
fewer and fewer places

for middle-class and
working-class people to rent

or potentially to buy.

And that means
unless you have

a lot of new housing
being created--

and you don't have that
in San Francisco--

Airbnb is actually making it
harder rather than easier

for the middle class
and the poor.

Pelosi: Airbnb
and the other big names

in the sharing economy

are multibillion-dollar
corporations

that have small businesses
crying foul.

Bhakta: Obviously,
I am not a big fan of Airbnb.

I am biased,
as I do help run a hotel.

They get a lot of tax breaks
that we don't get.

They don't--you know,

they don't have to function
as a normal hotel.

They don't pay the proper taxes
that they have to,

and that hurts our business.

If Airbnb wants to act like
it's a proper business,

then one of the things
they should do

is pay their taxes
and feed into the community,

feed into San Francisco.

So I'm trying to run a hotel,

and they are stealing money
out of my pocket.

No one is saying they shouldn't
be able to rent it out, right?

As long as they abide
by the same legal codes

that we have to

and the same building
inspections that we have to

and the same taxes
that we have to.

Pelosi: Okay, Sean, you're
the smartest techie I know.

So just explain it to me.

How come we can't get the tech
companies to play by the rules?

Gourley: Well, you can,

but we hardly
have any regulations,

and we can effectively,
at the moment, do as we wish.

So we live in a world where

we--we--we actively
kind of move away

from things
that are regulated,

that have government influence.

And in many ways, when we
can't get the systems to work,

we create Uber;
we create Airbnb.

Because, you know,
"To hell with the taxi union.

"To hell with the hotel lobby.

We'll just make
our own system."

And it's on an iPhone,
and so, you know,

"We can run faster than you,

so we don't need to deal with
your regulatory structures."

So it's a world
where we make products

that sometimes
circumvent regulation,

either by just being
so far ahead

or by just, you know,
changing the rules of the game.

Pelosi: Though the gears
of government do move slowly,

the San Francisco
Board of Supervisors

did take action
and called a hearing

to discuss legislation

that would regulate
home sharing.

And what happened here
will have profound implications

on the way
America does business.

- Airbnb is headquartered here.

And they are
fighting like heck

to make sure that San Francisco
doesn't regulate them

so they can send a message
to Seattle and Los Angeles

and New York and Chicago

that if they can do it
in San Francisco,

they can do it anywhere.

Pelosi:
It's a legislative battle

that pits neighbor
against neighbor,

those who can no longer afford
to live in their homes

without sharing them...

- Home sharing
enables my wife and myself

and so many like us to afford
our homes in today's economy

and not have
to leave this city.

Pelosi: And those
who are concerned

about home sharing's impact
on affordable housing.

woman: Look at the numbers.

It's pretty horrible.

5,000 units a day
available online.

Pelosi: These hearings
produced a new law

that requires Airbnb
to begin to pay hotel taxes,

but housing activists pushed

for even tougher legislation
to go on the ballot,

and Airbnb spent $8 million
to defeat the proposal

that would have put tougher
regulations on home sharing.

Now the concerns are shifting

to the other players
in the sharing economy,

like the unregulated
car services.

Gourley: We love technology,

so it was like,
if anyone else came along

and said, "I'm gonna create
a new taxi service,"

the union would've been like,
"You can't do that.

"You know, they're not allowed.
There's all sorts--

"You should probably
have regulation.

"What do you say?

"You want drivers
that have never been tested?

And you don't want insurance?"

And--like--
like, "No, you can't.

That's not a good idea."

But as soon as you hold up

and say, "It's on an iPhone,"

everyone's like, "What?

"It's on an iPhone?
That's amazing!

"We should absolutely
have this!

"That's awesome!

"What else can you do
on an iPhone?

This stuff is amazing."

And--and
so there's this kind of--

Like, you wrap yourself
in the cloak of technology,

and you can get away
with so much stuff.

- What happens
to widening inequality?

What happens to job security?

I mean, everybody who becomes
a more of a contingent worker,

more of a precarious worker,
whether you're an Uber driver

or you are an Airbnb proprietor,

your source of income
is that less certain.

A freelance economy
can be a very cruel economy.

It can be a form
of social Darwinism.

You know?

Survival of the fittest.

Pelosi: A visit
to the Tenderloin district

reveals the new
Darwinian reality.

As innovation eliminates jobs,

it's pushing older
college-educated workers

out of the workforce

and into the food lines
and soup kitchens,

like Allen here,

who used to work
at a securities firm.

How'd you go from working

at a securities firm
to being homeless?

- Well, it was a recession.

There--no one was hiring.

I went through
my unemployment benefits.

Then I cashed out my 401(k).

And then I started
working temp jobs.

I know other people
that are in my position

that are college-educated

that have lost everything.

Pelosi: In this land
of young entrepreneurs,

you have to adapt or die.

And Allen is a dinosaur.

[lock clicks]

- So this is where I live.

This is what it's like
during the day,

so I have to leave a light on
all the time.

The only time I will be
in this room all day

is if it's raining heavily
outside.

I leave after breakfast and
don't come back till sundown.

So basically, the only thing
I do in here is sleep

or read at night or watch TV.

That's it.

Pelosi: Are you
looking for work?

Zebrowski: On Monster,
LinkedIn, any other website,

I have never
gotten a response for work.

Never hear a word.

I'm 61,
I've got two college degrees,

I've got about
30 years' experience

working in the corporate world,

and nobody wants
somebody like me.

I'm--I'm on the tail end
of my work life.

I'm about to retire,

so nobody wants to hire
somebody like me.

I don't live
in your world anymore.

Things--things
are completely different.

What you take for granted

doesn't exist in my world
anymore.

I mean, for over 20 years,

I was able to have
a one-bedroom apartment

in San Francisco by myself
in a nice area.

And now I'm living
in a place like that,

in an SRO, in one of
the worst parts of town.

I think we're rapidly becoming
something like Venezuela,

where--where there's
a very small ultra-rich class

and everybody else is poor

and the middle class
is shrinking.

I think the American dream
is a load of crap.

There is no American dream.

It's a nightmare
for most people.

Pelosi: Now, there have always
been homeless in San Francisco.

We can't blame the techies
for that.

They're the obvious scapegoat

in a much more complicated
conversation

about affordable housing
and gentrification.

Still, as innovation moves in,

with it comes
a new generation of homeless--

those who have been pushed out
of San Francisco 2.0.

This is the dark side
of progress.

- ♪ I left my heart ♪

♪ In San Francisco ♪

Pelosi: As my beloved hometown
adjusts to the growing pains

from all this new development,

the questions remain.

Who gets to live in the city?

Will ordinary people still
feel like they belong here?

Or will it become a town

only for those
who can buy their way in?

This is not simply
an economic question.

It's also a spiritual one.

What is the price of change?

And what will the growing
divide between rich and poor

do to the fabric of America?

As income inequality

becomes something
of a national epidemic,

we need to find solutions

that will
keep our country together.

And if any city
can solve these problems,

I'm hoping that
this progressive town

will lead the way

and not leave
its heart and soul behind.

[dreamy music]

♪ ♪