Star venture capitalist Ron Conway absolutely lost his shit today at the Bloomberg Next Big Thing Summit after fellow VC Chamath Palihapitiya suggested Mayor Ed Lee was doing a poor job addressing San Francisco's gentrification crisis.
Conway, who raised $600,000 in angel funding for Lee's first mayoral campaign and has been an outspoken backer of the Mayor, had been stewing in the back of the auditorium for 10 minutes, according to TechCrunch, waving his hands demanding to comment on Palihapitiya's criticisms of Lee. And once Palihapitiya stated that "he'd resign" if he were Mayor Lee, Conway stood up to defend the Mayor, frantically pointing and shouting towards the speaker.
"I live in the city of San Francisco, you live in the city of Palo Alto. [...] Ed Lee, who you ridicule—how dare you, Palo Alto resident!" Conway sneered as eyes widened behind him.
Palihapitiya, an early employee of Facebook and investor in Yammer, attempted to have a conversation with Conway over housing policy. But Conway continued ranting, slamming Palihapitiya's apparent calls to levy a 1% equity tax on San Francisco startups to help fund affordable housing.
"Ron, if [startups] wanted to be in the city, there are all these people in the city right now that are really frustrated. You see it with the riots. All I'm saying is..."
"They're working to make it a better city, and so is Ed Lee, and it is going to get better—not worse."
"Ron, effort is fine. All I'm saying is that there are a ton of people that feel like they're getting pushed out of subsidized housing, that feel like..."
"30,000 units. Ed Lee has a mandate in every city department [Ed note: not true] to build 30,000 units. Is that not enough?"
In fact, it isn't enough. According to study by San Francisco's chief economist Ted Egan, it would take at least 100,000 market rate units to make a noticeable dent in housing prices.
"There's also the alternative of increasing market-rate housing construction, which does have an effect in the long run on housing prices," he said, adding that 100,000 new units — equal to all the housing built in San Francisco since the 1920s — is "the level of housing that you would have to build in order to see a significant increase in affordability at large."
As for the mayor's recent plan to construct 30,000 new housing units, Egan said, "It's certainly fair to say 30,000 new units would be less impactful than 100,000, but it will have an impact."
As much as Conway wants to point to Ed Lee's success in merely calling for 30,000 units to be built by 2020, the "follow through" is completely speculative. Mayor Lee's plan to cut red tape at the building permit office and bump up the priority of developments with high percentages of affordable housing is an ambitious approach towards fast tracking 30,000 units in a politically charged town. And never mind his office's very own inability to get already approved, city-funded affordable housing built in the city, which casts further doubt on his effectiveness.
So it's unsurprising that Conway's blind faith in the Mayor wasn't enough to sway Palihapitiya. "All I'm saying is you can provide economic frameworks to solve these problems. You can say for all these companies that want to be [in San Francisco], you could [create] another kind of tax that says 'this is a subsidized housing tax' and we want a piece of your equity. And a company can chose not to be there. But imagine how many more units they could build? 300,000. A million!"
Hell, 100,000 would be just fine.