I’m in a fluxspace near Sixth and Shipley, a large, low-ceilinged room that sleeps three -- all men, all hackers, all involved in information security. Their work is cryptography and penetration testing. That's simulating attacks on computer systems. When one hacker moves out, another infosec guy takes his place. On the table are empty pizza boxes; in the air, the smell of sawdust.

A fluxspace is any part of a building that hackers and makers have illegally occupied so they can live and work together. It's grassroots rezoning.

Rent hikes are one way San Francisco has responded to the incoming floods of people and money. That’s the story everybody knows. The other story is one of breaking the rules, quietly, so the city can keep absorbing labor by reallocating buildings for residential use. Even as it's growing upward via high-rises and outward through sprawling suburbs, San Francisco is growing inward. Fluxspaces are clandestine demographic infill -- no city planners needed.

In a way, each fluxspace is a microcosm of the South of Market neighborhood, whose unfinished, irregular blocks are suspended between the area's working-class past and some dystopic, tech-dominated future.

SoMa is already covered with structures that have been turned from their original purpose -- warehouses, tenements, souvenirs of the city's industrial past — all converted into lofts, restaurants, boutiques. Most have permits, but fluxspaces are different. They haven't completed the leap, and they don’t announce themselves. Inside a decrepit tenement whose chief ornament is the fire escape, you enter a nameless suite of rooms through a small, unmarked door.

This particular four-story building has a peeling, greenish facade and zigzag iron staircase. It’s a few hundred yards south of the crack hotels and hardened dereliction that have made Sixth Street an extension of the Tenderloin. These blocks boast as many sexual offenders per square foot as any in the city. A lo-fi neighborhood with one liquor store per block.

To enter the fluxspace, you have to pass through a pawnshop full of faded Christmas ornaments and electric guitars. To one side, a door leads to a sunless flight of stairs lit dim blue and red. Welcome to VaultLabs.

It’s not a squat. They pay the rent in cash: $2,100 a month, split three ways, which gets them a particle board floor and some makeshift bedrooms. On weekends the hackers parcel up the common living room with sheet rock. One wall is still a scaffold of two-by-fours, another covered with a red and white psychedelic mural, equal parts Looney Toons and Dali.

"They're hard to find, but it's paradise when you get in, because you can do anything you want," one of hackers tells me. "I can use the power saw any time."

The cash goes to a Chinese guy who runs an "apparel business" upstairs. If you stand in the bathroom and hold still, you can hear Mandarin spoken by female voices drifting down through the ceiling, and the low whir of sewing machines. That’s what this fluxspace used to be.

Above the sweatshop is an artists’ collective, some grow ops (which may be the most legal of any activity in the building), and one guy so fond of the neighborhood, he parks his motorcycle next to his bed. Every night he rolls its heavy chrome through the hallway into an enormous service elevator. This crumbling edifice is factory, co-op and parking garage and plantation all at once. And, in my mind, living proof that San Francisco is a living city.

You know a city is doing well when outsiders want to move in, and if there's one rule about migrant workers, it's that they stick together. When San Francisco had its first gold rush, the miners built tent cities on a swamp plain by the bay. When jobseekers descend on North Dakota's oil rigs, they build mancamps. When coders come to SoMa, they look for a fluxspace. It's a live-work cluster, with one slight difference.

While they don't have the revolutionary ethos of previous communal movements in San Francisco (like, for example, the Diggers), fluxspaces epitomize the anti-surveillance leanings of the hacker community. Surveillance is control. And the most paranoid fantasy ever voiced about America's techtalitarian state was legitimated by Edward Snowden's leaks. More than others, infosec hackers know just how vulnerable we all are.

The rooms at VaultLabs have no heat, and are sometimes overrun with mice. Living there is kind of like camping inside a building. And like campers, the people here enjoy a certain freedom. There's no one watching, except maybe online.

In a sense, a fluxspace is a hack. And when people build their own workarounds, when they choose to break the rules, it’s a signal that something’s wrong. Whatever these coders are doing must seem better than the alternative. Their options would be either moving somewhere more affordable with fewer jobs, or finding a legitimate apartment and blowing everything they earn on lodging. San Francisco offers jobs without shelter; other places offer shelter without jobs. It turns out shelter is an easier problem to solve.

There’s a word in internetspeak called “inbetweening.” ‘Tweening is how one frame of animation transitions to the next. When you tween something, you help it make a leap. San Francisco is tweening. It has nothing to do with preteens or maturity or progress. It’s just change. This particular set of changes are making some people rich and others homeless. They’re also making it possible for a lot of us to live through the city’s slow transformation.

When I moved back to San Francisco last year, I was sleeping in a warehouse and working in an apartment block. It was the first time I’ve had to live in a building zoned for light industrial use and commute to one zoned for residential.

We were vaguely aware of about two startups per floor in that building. Institutional memory or urban legend had it that Sean Parker created on one of his early companies there. Everybody told building management they were students working on a class project, and management quietly took their VC money and looked the other way. (Two moves later, we made it to a real office.)

Whether they’re in tech or not, young, broke, ambitious people are moving to San Francisco and not telling San Francisco about it, because the city can't do much to help.

Officially, it's been producing an average of 1,500 new housing units a year for decades. Let’s assume, generously, that each unit will house two people in a city that already counts 825,000 inhabitants. That means new housing is absorbing a population increase of about 0.4 percent, less than half the city’s official growth rate of 0.9 percent. Meanwhile, jobs are growing more than double that at 2.3 percent per year, which means migrants will keep coming. Fluxspaces help make up the difference.

[Details identifying VaultLabs and its location were altered for obvious reasons.]