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The human cost of Silicon Valley

20/05/2019

The San Francisco Bay Area is struggling to cope under the weight of a widespread and catastrophic housing crisis. With tech workers descending on the area in their thousands and low-income residents struggling to hang on, we explore the consequences of the rising cost of living in Silicon Valley.

The human cost of Silicon Valley

The San Francisco Bay Area is the home of some of the largest tech companies in the world. With Adobe in San Jose; Apple in Cupertino; LinkedIn in Sunnyvale; Facebook in Menlo Park; and Dropbox, Twitter and Uber in San Francisco, internet giants form a dot-to-dot line across the map of the region. Together, they stimulate economic growth at a rate two times faster that of the rest of the US; the Bay Area has a GDP that exceeds those of several countries. Yet in cities across the region, people are living on the sides of roads in RVs.

 

“I live in a trailer, called Lindy—here’s the whole street, the whole park.” In Pamola Martinez’s short film Crisanto Street, Geovany Cesario is giving a tour of his home. Gripping a handheld video camera, the young boy runs past trailer after trailer—a phenomenon that’s become the only viable living circumstance for many across Palo Alto, with landlords reportedly buying up derelict RVs and renting them out to low-income tenants for $400 per month, according to KPIX 5. “We’ve lived for two years in this trailer, and thank God we’re leaving now,” says Geovany’s mother Antonia. The family is about to swap their RV at the side of the road for a low-income apartment.

 

The rapid rate at which tech companies expand leaves little room for the existing communities in the poorer parts of the Bay Area—quite literally.

 

A housing crisis in the making

The Bay Area Housing Crisis has been ongoing since the early 1990s, but it has its origins almost a decade earlier. In 1978, a referendum put a limit on the ability of governments in the area to increase property taxes, effectively granting more freedom to landlords and homeowners. To balance this out, tax was instead collected from other sources: sales, jobs and office buildings. Facebook moved to Palo Alto, California, in 2004, and in the same year the Googleplex was built. Apple acquired the land to build its juggernaut headquarters, Apple Park, in 2006. Since 1992, Apple had occupied One Infinite Loop in Cupertino, but expanded to its completed headquarters in 2017.

As the tech companies moved in, so too did their workers. A BuildZoom study from last year found that people who moved to the San Francisco area between 2005 and 2016 made $12,640 more annually than those who left the city in the same period. This figure accelerated from 2010 to 2016, when newcomers

made around $18,700 more than former residents. Tech-company super-campuses are capable of holding workers in the tens of thousands, but the San Francisco housing market is unable to keep up. Last year, the ratio of new jobs to housing units in the Bay Area was 3.5:1. The limited ability of governments to increase property taxes, the handsome wage packets offered to white-collar tech workers and the influx of these inbound workers presents a huge problem for those at the bottom end of the region’s average pay scale.

 

“Are we not the right kind of workers?”

It’s a problem that’s rendered people not usually associated with homelessness living in their cars or struggling to pay the rent. The story of Ellen James Penny broke, and quickly went viral, in 2017: an English teacher at San Jose State University, James Penny was living in her car with her husband. “The housing takes up three quarters of my monthly income,” Penny told CBS, “so to stay here and to teach, I have to live in the car.”

James Penny and many like her—outwardly, members of the middle class—are casualties of a housing problem so acute that even those on steady incomes cannot afford to rent, let alone buy. As super-scale offices continue to expand, local governments are ill-prepared for the inflow of workers bound for San Jose, San Francisco, Cupertino and more. Some opportunistic property buyers, on the other hand, are more welcoming to the tech workers. A new phenomenon has swept the traditionally low-income areas: real-estate companies are buying up apartment buildings with low-income residents, evicting them en masse and renovating the vacant buildings to appeal to a different clientele. One such developer said in a statement: “While rents will be increasing at this property, we would, of course, be delighted to have the original residents come back to this building as residents in the renovated units if they would like to.”

For many, this would prove impossible. The Guardian reported in 2018 that some tenants were facing rent increases from $1,100 to $1,900pcm. In December of last year, a group of tenants and their supporters urged Mountain View City Council to reject a proposed demolition. 2005 Rock Street houses more than 75 residents— 30 of them children—across 20 affordable homes. A development permit, which would see the affordable homes razed in order to build 15 luxury townhouses, was approved on December 13. “I would love for my husband, my children and I to live in these luxurious townhouses—unfortunately they are unaffordable and clearly weren’t made for us,” said Reyena Dominguez, a member of the Tenants’ Union at 2005 Rock Street. “In fact, at one point the developer told us that these townhomes were being built for ‘workers’. To this, we answered, we are workers! Are we not the right kind of workers?”

 

The super-company as the benefactor

As the crisis intensifies, campaigners are looking to those with the largest stake in wealth in the region: the tech companies themselves. Google is expected to build nearly 10,000 homes near its new Mountain View campus, and launched the Bay Area Impact challenge in 2015, which issued grants amounting to $5.5 million to a range of community initiatives. In 2016, it issued further grants to ten organisations, each with a specific focus on tackling homelessness.

In 2017, Facebook proposed building 1,500 housing units near its headquarters. The Chan-Zuckerberg Initiative—a charitable cause founded by Facebook founder Mark Zuckerberg and his wife Priscilla Chan—aims to use technology to “accelerate the pace of social progress” in science, education, and justice and opportunity. The latter focus area includes “housing affordability and access”.

In practice, the latest manifestation of this comes with the Chan-Zuckerberg’s “Partnership for the Bay’s Future”—the goals of which include “the expansion and protection of the homes of up to 175,000 households over the next five years and the preservation and production of more than 8,000 homes over the next five to ten years—across San Francisco, San Mateo, Santa Clara, Alameda and Contra Costa counties.” The Chan-Zuckerberg will work with a number of community foundations and faith groups.

Yet in 2017, an RV community in East Palo Alto was evicted by the city. As reported by The New York Times, its former residents claimed at the time that it was to make way for “the Facebook school”—a private school for low-income children called the Primary School, set up by the Chan-Zuckerberg.

It’s not clear if the RV community was evicted to make way for the school, but the reaction to it indicates just how wary low-income communities are of tech companies in the Bay Area. The provision of what have traditionally been government services by tech companies is still very much a novelty.

 

The grassroots campaigns

On the ground, the plights of activists and campaigners in the areas tell a very different story: a tangled problem that can’t be solved by grants or corporate initiatives. Last year, Katherine Nasol of Serve the People San Jose, a grassroots movement in the area, wrote on Google’s plans for a new campus in San Jose. “We feel that the Google campus was less of a solution and more a barrier to what our community needs, which is low-income and extremely lowincome housing, fully-funded public schools and access to quality public services,” Nasol wrote for San Jose Inside.

More recently, the story of the #Google8 was extensively documented by Serve the People San Jose: eight individuals were arrested after chaining themselves to their chairs in protest of Google’s planned San Jose development. On February 4, it became clear that there were no charges against the individuals, but only after they arrived at court to be arraigned.

In advance of the day in court, Serve the People San Jose posted on its social media: “While tech CEOs get freedom to use San Jose as their playground, ordinary people get trumped-up charges and illegitimate arrests. We gotta have each other’s backs!” Campaign groups such as Serve the People San Jose and Silicon Valley Rising highlight a very specific problem, difficult to understand for those not on the ground in Silicon Valley. Many of those facing rent hikes and homelessness aren’t white. Silicon Valley Rising points out that most of Silicon Valley’s low-paid subcontractors—“janitors, food-service workers, maintenance workers, security guards and shuttle-bus drivers who help build and sustain the tech economy”—are “blacks and Latinos”. Those same groups make up just 10% of the core tech workforce.

Meanwhile, Save the People San Jose provides all of its communications in English and Spanish, addressing a community that was, at its last census, 33.2% Hispanic or Latino. The plight of those facing homelessness is both a low-income problem and a racial one.

 

The future

As it stands, house prices in the Bay Area are continuing to climb. For the tech workers, this might mean renting rather than buying, or succumbing to the infamous “super commute” into work, about three hours each way. For residents on low incomes, this might mean renting an RV at the side of the road, living in their cars or leaving the area entirely. Nasol writes: “Our families and friends are already being pushed out of San Jose, as well as other Bay Area cities such as San Francisco, East Palo Alto, Mountain View and Oakland.” Former residents have been pushed as far as Texas and Nevada—a whole state away.

It’s hard to pinpoint a single solution to a problem decades in the making. The Bay Area Economic Institute Think Tank has called for the cost of building new housing to be lowered, zoning to be changed to allow less expensive housing to be built and state funding to offset the cost of building—but pinpoints the hardest challenge as “the lack of affordable housing for middle-income residents who are not eligible for subsidised housing even if it were available in sufficient quantity”.

The super-campuses inhabited by tech companies are built on the principles of community: employers are granted free lunches, work in spaces architecturally engineered to facilitate collaboration, and have inbuilt parks and open spaces for breaks. Meanwhile, on a stretch of road in Cupertino, families such as Geovany Cesario’s will fall asleep in dilapidated RVs, listening to trains rattle past outside: their communities displaced.

 

Becky Kells