Last updated: September 3, 2019
Topic: BusinessConstruction
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While walking in San Francisco, Chirag Bhatka, a tenant rights nonprofit worker and longtime resident of the Tenderloin neighborhood passed by four well-dressed men. He muttered, “F***ing tech bros, ruining the neighborhood” One of the men fired back with, “If you can’t afford it, get out!” (Colins, Chris). This interaction encapsulates a huge problem facing many cities worldwide: gentrification. The Bay Area’s experience with gentrification has been impacted by the heavy presence of extremely successful technology companies. Residents are quick to point a finger at these businesses as the root of the city’s crisis, but technology companies are defensive and eager to note that without them, other issues would arise such as higher unemployment rates. Tech companies flocked to San Francisco due to a generous tax break and their well-paid employees followed, sparking a fierce debate as to what role the technology industry has played in shaping modern-day San Francisco. The Oxford Dictionary defines gentrification as, “The process of renovating and improving a district so that it conforms to middle-class taste”; however, this definition does not adequately capture the human element inherently involved in these changes. Patricia Kerman recently got an eviction notice for the rent-controlled apartment she has lived in for decades. At sixty-five years old with a monthly income of $900, she will likely have to leave the city as she is unable to afford another place; the median rent in the Bay Area is a staggering $4,440 compared to the United States average of $1,441, and the median home price is over a million dollars, five times more than the national average. This can be problematic for residents like Kerman, but tech workers who make more than twice that of the average worker barely bat an eye. Researchers at UC Berkeley conducted a survey of 130 people who worked in Silicon Valley and found that proximity to a corporate shuttle stop was rated more important than affordability when choosing where to live. Although the researchers are credible, the study’s sample size is a very small fraction of tech workers in the Bay Area. While housing costs in the city have unequivocally increased, whether or not this is the fault of the tech industry remains a central and divisive issue.The mass movement movement of 746,100 tech workers to the San Francisco Bay Area has transformed the region. From 2010 to 2014, San Francisco’s tech employment increased almost ninety percent and the price of a home grew by about one hundred percent, leading some to blame the wealthy tech workers for the record-setting housing costs. Erin McElroy, an activist and resident of San Francisco griped, “This was a great place to live, but not anymore…you’re probably going to get evicted so someone making way more money then we’ll ever make can move in” In 2013, there were more people evicted than housing units being built. One study found that since 2011, sixty-nine percent of these evictions were within four blocks of a private shuttle stop for tech companies. One lawmaker, Eric Mar, proposed a tax only on tech companies explaining that the businesses should be held accountable for the effects of “the technology-driven housing crisis” Others cite different factors contributing to the housing problem. Scott Wiener, a city supervisor argued, “Our housing crisis is the result of decades of not creating enough housing. The crisis won’t be solved by chasing good-paying jobs in one targeted industry out of San Francisco” Jed Kolko, chief economist for the real estate website Trulia asserted that, “Geography limits construction in the Bay Area—it’s hard to build on the ocean or on steep hills—but regulations and development costs hurt too.” One outcome of rapidly rising housing costs and evictions is “wholesale neighborhood change” according to Steve King, a researcher for the nonprofit Urban Strategies Council. Locals have not been idle during the flood of tech workers. Kerman stressed the importance of community, stating, “The older you get, your friends, family, they die. But you have your community. I love this city. It’s not the bridges. It’s not Golden Gate Park. It’s the people.” Others have protested, bearing signs that declare, “SF IS FOR THE PEOPLE, NOT FOR GOOGLE” and, “F*** OFF, GOOGLE” The CEO of eBay, Devin Wenig, disagrees with those sentiments, insisting, “There are real issues about displacement and gentrification but it’s stereotypical to say that tech doesn’t care” Wenig’s multi-billion dollar company is based in the Bay Area, so he is invested in the matter and likely wants to be perceived as empathetic. Supervisor David Campos has a similar opinon, “I’ve always believed there is something special about the tech worker. The reason they are moving…is that they value the diversity, culture and art that make San Francisco what it is” It should be noted that Campos has close ties to tech companies and that Google donated almost seven million dollars to a program he founded. Tom Rapp, a musician who was born and raised in San Francisco pointed out the ironic result of wealthy people moving in is that they “displace the people who made them want to live there” Proponents of tech industry’s takeover in the Bay Area often highlight the city’s low unemployment rate of 3.2 percent. Tim Redmond, former editor of the Bay Guardian concedes that, “Without Twitter and the current tech boom, the city’s unemployment rate might be higher.” but disputes the notion that tech companies are beneficial for the average person because the companies are mostly hiring “people from somewhere else who came here for a high-paying job,” instead of unemployed Bay Area residents. Enrico Moretti, an economist at UC Berkeley analyzed ten million workers in two hundred twenty metro areas and found that each tech job supports five additional ones. Kurt Hillbrand, a cab driver born and raised in San Francisco, identifies a different problem, “There are lots of jobs for everybody here, but there are lots of jobs that don’t make much money” As the tech industry has grown, so has financial inequality. The wealthiest people in the region earn about 28 times more than the poorest, by far the biggest wage gap in the country. Mario G., a service worker for big tech companies in Silicon Valley simply said, “They get richer, we get poorer,” Leslie Dreyer, a protester against the growing number of prosperous tech employees explained the position she shares with many others, “There’s been this debate of people with more wealth saying, ‘well if you don’t have enough money, then you need to move to a cheaper city’ That’s not taking into account their roots, their community, their needs, or anything else” The Bay Area is grappling with the soaring costs of housing that have been uprooting residents who are often replaced by affluent tech employees at a record pace. A delicate balance must be struck between longtime residents who anchor their communities with tech companies that benefit the economy. The arrival of innovative tech companies is very controversial and has been scapegoated or defended by a diverse group of people, each with their own concerns and interests. Campos claimed, “Right now, the middle class in San Francisco is being pushed out. It’s becoming a city that only millionaires can afford” His observation is empirically true, which begs the question: what will the Bay Area do about it?