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Why housing costs should scare tech workers too

The tech industry isn't necessarily to blame for the skyrocketing cost of living in cities around the world, but they should be concerned. Here's why.

Technology industry workers are not apathetic. The industry is known for its passionate defense of civil liberties, growing movements in education and immigration reform and the unprecedented scope of the philanthropy of its most successful members. (It's not just Bill Gates, either. Facebook's Mark Zuckerberg, Ebay's Pierre Omidyar and Google's Sergey Brin were all among the top 10 philanthropists in the U.S. last year.)

Working in such a transformative industry naturally leads people to think and care deeply about societal issues, but I suspect most tech workers have hardly given a moment’s thought to housing issues. That needs to change.

The history of the technology industry was mostly written in the suburbs, whether in Silicon Valley or Redmond, but today tech companies and tech workers are increasingly choosing to locate in city centers. In San Francisco, the arrival of Twitter has brought an influx of tech companies downtown, while here in Seattle, Amazon has completely transformed South Lake Union.

Given the large and ever-accelerating size of the tech sector, these companies and their employees are increasingly shaping the character and policies of cities. That gives the tech industry a responsibility for engaging constructively on housing issues, which are central to city life.

For a sense of urgency, look to San Francisco, which has become the obvious example of what happens when a tech boom combines with failed housing policy. New residents have been flooding the city during the latest tech bubble, while construction of new housing continues its decades-long stagnation. (See Gabriel Metcalf’s piece in The Atlantic Cities for a great summary.)

Predictably, already high rents have skyrocketed. Rightly or wrongly, tech workers have been cast as the villain in all this. Protests against evictions, rising rents and gentrification have become so frequent that they’re making national news. The improbable lightning rod for these protests has been the company buses that ferry tech workers each day to campuses south of the city.

Protesters block a Google bus in San Francisco.

Protesters block a Google bus in San Francisco. Photo: Chris Martin.

In a sense, protesters are right to blame tech workers for rising rents. Wealthy tech workers are directly competing with poorer residents for San Francisco's severely limited housing stock.

But in another sense, the blame is misplaced. Had San Francisco built housing to keep up with demand, there wouldn’t be ever more people fighting over the same limited housing stock. This is why the tech industry should be pushing hard for more density: Without it, their workers really are pushing out the poor.

The tech industry should be a powerful voice for more housing, more affordable housing and an end to homelessness. But unfortunately, the message from the tech community that’s gotten the most attention is ex-AngelHack CEO Greg Gopman’s rightfully reviled rant against the poor. Gopman’s contention that the poor should be forcibly removed so as not to bother the rich reads as almost too movie villain evil to be real, but sadly, he has become the public face of the tech industry for many.

Being seen as the enemy will have real consequences for tech workers. Companies like Twitter and Amazon are able to locate in downtown cores because city leaders have welcomed them. If public sentiment turns against them, as it has in San Francisco, tech companies will surely find it more difficult to work downtown. Additionally, the new construction that houses so many tech workers in city centers can only continue if the public is convinced that density and growth is good for the city as a whole.

Seattle is thankfully in a far better position than San Francisco. We’ve continually added to the housing supply, keeping rental prices from rising as rapidly as they have in San Francisco. But debates about growth, density and affordability are far from settled. The tech industry in Seattle should heed San Francisco’s warning and get involved now. For their own good and the good of the city, tech workers should stand up to demand enough housing for everyone who wants to live here.


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Comments:

Posted Fri, May 2, 12:52 p.m. Inappropriate

An overly polite economist in the public employ resorts to hard numbers to make clear the scale of new market rate supply to make the dent implied, and the newly "educated" takes it as marching orders.

http://www.sfexaminer.com/sanfrancisco/leveling-sf-housing-field-could-take-100000-new-units/Content?oid=2703869

“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.”

Construction on that scale would have the same impact on affordability, he said, as giving every low-income household — about 56,000 households — $75,000 for down-payment assistance.

When asked recently about his 2012 testimony, Egan said, “I think what I said was that building 100,000 units would have a comparable impact on prices to a down-payment subsidy that would cost several billion dollars just to cover the entire low-income — 50 to 80 percent of the area media income — population in The City. Whether such a level of construction would ‘really impact’ prices is a matter of opinion....

That opinion seemed to be his in 2012: “In order to have an appreciative effect on diminishing housing prices in San Francisco,” he told the committee, The City would have to build 100,000 units."

afreeman

Posted Fri, May 2, 1:40 p.m. Inappropriate

I beg Amazon to build housing in the Denny Triangle even as they build those new office towers. There has to be balance.

Posted Fri, May 2, 1:49 p.m. Inappropriate

Thanks for the above posting on how difficult it would be to build our way out of expensive housing. Density proponents reduce their argument to "more supply equals lower housing costs." This might be true for widgets, it's not true for housing. First, if pent up demand is large or growing, increased supply might, at best, slow down the rate of housing costs. Secondly, if there is sufficient income disparity, low income workers will never be able to compete for market-rate housing. New construction is expensive and often displaces older, cheaper housing, leading to decreased affordability.

Counting housing "units" also fails to consider housing type. Small apartments might serve individuals or couples but are not desired by families with children.

Increases in density outpace public parks, open space and transportation infrastructure, eroding quality of life. At some point, this erosion of quality of life will start to depress housing costs but this isn't the model developers want to acknowledge.

Mr_Jones

Posted Fri, May 2, 2:37 p.m. Inappropriate

"Had San Francisco built housing to keep up with demand, there wouldn’t be ever more people fighting over the same limited housing stock. "

This is the type of KoolAid rhetoric spewed by the developer-funded/friendly "think" tanks, and shows little depth of analysis of the issue.

San Francisco's problem may be attributed to a slow-growth neighborhoods movement bent on preserving character and preventing displacement in a city already extremely dense by US standards. Something we are seeing with nascent organizations in Capitol Hill and Ballard such as Seattle Speaks Up and Livable Ballard.

But what is not looked at is the housing demand created by San Francisco as it converted warehouse and industrial zones south of Market and around Potrero Hill into high tech offices which brought in the thousands of workers seeking housing.

Similarly the explosive growth of Amazon and others in South Lake Union brought in a surge of new employees, not already residents of Seattle, who are now displacing long time Seattle residents on Capitol Hill and Central Area just as San Francisco tech workers displace people of color and blue color workers in the Mission and Potrero Hill.

The City and DPD talk about sustainability and growth management yet balance and planning are really something that appear to be beyond its capability. And all those Councilmembers that lobbied against District Elections on the assertion that they think regionally and citywide really don't and can't. It should have been obvious that the job growth in SLU could not be met by housing supply in the city. Amazon added nearly 30,000 jobs in a two year period alone.

Jane Jacobs wrote quite elegantly about her theory of "import substitution" - basically that a community is healthier the less it needs to import. Seattle imports workers - either across Lake Washington or from the south and the north - causing huge transportation problems. And we are jumping into the corporate headquarters game where even more imported high tech workers will further the gentrification of working class and poorer communities.

Instead our leadership should be looking to help create jobs for the people that are here, and not just for people that the booming tech market wants to bring here.

And we should better understand the impacts of continually building more office space and converting lower intensity zones to higher commercial uses. It is not likely that the housing market will lead with units that will remain empty until demand picks up...

Posted Fri, May 2, 5:18 p.m. Inappropriate

"Instead our leadership should be looking to help create jobs for the people that are here"

The most important thing "leadership" can do to help create jobs for the people here is run a great public education system. Oh, but wait, appeasing the teachers' unions and being politically correct is more important.

kevin22

Posted Mon, May 5, 10:52 p.m. Inappropriate

that, maybe. but also, not convert industrial and manufacturing lands to basketball arenas.

Posted Sat, May 3, 11:47 a.m. Inappropriate

Good article. Something else to worry about I guess. But note that the buses that were attacked were transporting workers to Palo Alto and San Jose; there is a nuance to this that is not explained clearly in the article, namely that Silicon Valley employers were effectively subsidizing their workers to live in glamorous, picturesque and expensive San Francisco. This transportation subsidy was making matters worse for renters in San Francisco (not to mention clogging up Bayshore). Twitter and other startups that operate their businesses within San Francisco should be viewed more sympathetically.

kieth

Posted Sun, May 4, 8:14 a.m. Inappropriate

Silicon Valley employers [are] effectively subsidizing their workers to live in glamorous, picturesque and expensive San Francisco.

That is EXACTLY what Microsoft is doing with its "Connector" vans. It is subsidizing its workers so they can buy and rent residential property in North Capitol Hill, Madison Valley, Queen Anne Hill, Bryant and Laurelhurst.

I saw a MSFT commuter van blocked by protesters on Madison Street last week. They held a large banner out in front of it so it could not pull out of the Metro stop it had used to pick up the code monkeys to take them to Redmond for the day.

crossrip

Posted Mon, May 5, 10:44 a.m. Inappropriate

How things have changed that tech workers require a subsidy to live in Madison Valley!

Posted Mon, May 5, 12:41 p.m. Inappropriate

Those employees do not require that perquisite (Connector service).

Not only is that perquisite not needed, it causes negative social and financial impacts in communities throughout Seattle. That is why people are demonstrating against it.

crossrip

Posted Tue, May 6, 8:59 a.m. Inappropriate

Other than money, why in Dog's name would anyone want to work in tech - it's boring, you're stuck in cube land all day, and the only socially redeemable part of your job is creating little screen widgets to entertain 20 somethings with the latest time-waster. Ugh.

Lily32

Posted Fri, May 9, 9:38 a.m. Inappropriate

Homeless GoPro is one attempt to use a bit of technology to elevate the stories of the homeless, by giving them a voice directly. Empathy and understanding of each other's situations is a precondition to effective policies that work for all of San Francisco.

http://homelessgopro.com

Kevin1393

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