San Francisco Spent the Decade Rich, Important - And At War With Itself

Everything has a cost, especially success. JL

Scott Lucas reports in Buzzfeed:

Jefferson Airplane guitarist Paul Kantner once joked, “San Francisco is 49 square miles surrounded by reality.” In the last 10 years, the easiest enemies to find were the techies and the nimbys. “The unique urban features that have made San Francisco so appealing to a new generation of digital workers — its artistic ferment, its social diversity, its trailblazing progressive consciousness — are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it. And it’s not just about housing. Many San Franciscans don’t feel as if they’re benefiting from the boom in any way."

In December 2019, as the decade drew to a close, thousands of 10-inch-long penis fish flopped ashore at Drakes Beach, about 50 miles north of San Francisco. Otherwise known as the fat innkeeper worm (Urechis caupo), the invasion of the phallic critters took over the beach, forcing out the locals. If you were looking for a metaphor to sum up what a decade of growth in the high-tech industry has done to the Bay Area, you couldn’t ask for something more apt. Unless, of course, the penis worms were libertarians.
Because, from a certain point of view, that’s been the core story here since the end of the Great Recession. Hordes of newly minted and newly wealthy tech bros, flush with Silicon Valley VC cash, ruined what once had been an all-are-welcome cool, gray city of love, where the funky landlady Anna Madrigal offered furnished rooms on Russian Hill for $170 a month. As the Jefferson Airplane guitarist Paul Kantner once joked, “San Francisco is 49 square miles surrounded by reality.” If that were ever true, this was the decade in which reality finally closed back in.
At the end of the decade, how did the Bay Area end up in such dire shape? Perhaps our politicians, bought and sold by big business, opened the gates to a wave of capital and an influx of outsiders. That’s one way to tell the story of the decade of the technology industry in its capital, the San Francisco Bay Area.

And so, when the tech industry reignited our economy, we — newcomers and locals alike — didn’t have the capacity to grow.

But there’s another, which is perhaps more apt. In December, San Francisco’s Planning Commission approved the construction of five duplexes in Bernal Heights, where the median home price is just under a million and a half dollars. In the middle of the region’s excruciatingly well-documented and seemingly near-permanent housing crisis, it didn’t take the commission a month to approve the construction, or even a year. It took 41 years — four decades to approve just 10 new units of housing on a vacant hillside, kept that way by the opposition of neighbors who opposed construction, quite literally, in their backyards, and a system that prioritized their preferences over our needs.
This isn’t an anomaly. Across the street from Apple’s headquarters in Cupertino, a developer proposed to convert an all-but-empty mall into 2,400 homes. City voters said no. In 2013, San Francisco voters rejected a 141-unit condo building on the waterfront. Across the region, city councils, beholden to voters concerned about their own property values, dragged their feet in approving new housing. And so, when the tech industry reignited our economy, we — newcomers and locals alike — didn’t have the capacity to grow.
Politics is much less about who your friends are than who your enemies are. And in the last 10 years, the easiest enemies to find were the techies and the nimbys.

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When he became the mayor of San Francisco in January 2011, Ed Lee presented himself as a compromise figure, one who could build consensus among the ever-warring factions of the city’s Democratic party. “I present myself to you as a mayor for everyone,” he said at the time. “A mayor for neighborhoods, a mayor for downtown, for business, for labor, for the powerless and the powerful, for the left, the right, and everyone in between — for everyone.”

In 2010, during the trough of the Great Recession, the regional unemployment rate reached 10.5%. So the next year Lee and the Board of Supervisors (San Francisco’s name for its city council) passed what became known as the Twitter tax break, an exemption on payroll taxes for new employees for six years. At the time it was estimated the legislation would save the company $22 million, in exchange for which it abandoned a threat to leave town for the valley, and moved to the offices it still occupies today, a stately building on the corner of Market and 10th streets.
For a moment, the Twitter tax break seemed as if it would make good on Lee’s promise to bring the city together.
The deal united members of the moderate wing of San Francisco’s Democratic Party with the progressives. It lured not just Twitter but several other tech companies, including customer service software maker Zendesk, to locate in a seedy part of San Francisco, better known for drug dealers than disruptors. When he unexpectedly ran for reelection in 2011, Lee's allies cut a deeply goofy, but not unfunny campaign video featuring Facebook’s Sean Parker, Twitter’s Biz Stone, and Yahoo’s Marissa Mayer, Giants pitcher Brian Wilson, and rapper MC Hammer.
Lee won in a rout, but the era of good feelings was short-lived.
In October 2012, San Francisco magazine ran a story by Salon founder David Talbot that posed the question that would dominate the rest of the decade. The title of the story said it all: “How Much Tech Can One City Take?”
Talbot’s answer: as little as possible.“The unique urban features that have made San Francisco so appealing to a new generation of digital workers — its artistic ferment, its social diversity, its trailblazing progressive consciousness — are deteriorating, driven out of the city by the tech boom itself, and the rising real estate prices that go with it,” he wrote, adding, “And it’s not just about housing. Many San Franciscans don’t feel as if they’re benefiting from the boom in any way. While 23-year-olds are becoming instant millionaires and the rest of the digital technocracy seek out gourmet restaurants and artisanal bars, a good portion of the city watches from the sidelines, feeling left out and irrelevant.”
The progressive narrative hardened from there: Lee, desperate to attract businesses, had sold out the city to high-tech, throwing open the gates to every “Stanford asshole” (as Talbot would later put it) with a pulse and a business plan. Enter stock options, exit the soul of the city.
It was only a little more than a year later, in December 2013, that the next front in the local war against tech would open — this one covered in vomit.

Because of the region’s clogged freeways, poorly designed public transit systems, and lack of housing near the main campuses of companies like Google, Facebook, and Apple, several tech giants had for years offered their employees shuttles to and from work. That winter, activists in San Francisco and Oakland blocked the path of the private shuttles that ferried workers who lived in the cities to their offices in Silicon Valley.
Demanding that tech companies pay for use of city streets, the protesters handed out a communiqué that blamed the tech industry for the rising cost of housing. (From the lowest point of the recession, the median inflation-adjusted cost of a home in the region had risen over $100,000 in just two years by 2013.) “Rents and evictions are on the rise,” they wrote. “Tech-fueled real estate speculation is the culprit. We say: Enough is Enough! The local government, especially Mayor Lee, has given tech the keys to shape the city to their fancy without the public having any say in it. We say, let’s take them back!”The first protest occurred in December, and they lasted until April. In San Francisco’s Mission District, protesters stood in front of the buses as they loaded passengers. On the freeway, someone shot a projectile through a window. And in April in Oakland, a masked anarchist climbed on top of a bus and puked on its windshield.
Everyone had a hot take about the Google Bus protests. (This one was mine.) A UC Berkeley professor wrote that they were “synecdoches for the anger that many San Francisco residents feel towards technological privilege and its facilitation of a widening of a class divide in the city.” Media theorist Douglas Rushkoff rushed out a book that argued that protests showed that “the digital economy has gone wrong.”
Eventually, San Francisco’s city government muddled to a compromise. But by then, the issue had taken on a weight more symbolic than substantive.

The Google buses symbolized “the spaceships on which our alien overlords have landed to rule over us.”

And depending on which camp you found yourself in, there was one of two essays you’d brandish at dinner parties, yell about on Twitter, and pretend to have read that explained what the protests symbolized.
One was by the prolific writer Rebecca Solnit (Men Explain Things to Me) and published in February 2013. In the starkly titled “Google Invades,” she argues that the Google buses symbolized “the spaceships on which our alien overlords have landed to rule over us,” and compares the tech workers to the Prussian army invading Paris, while noting in passing that she, a Connecticut native, had sold her Mission District apartment to a Google engineer in 2011.
From one point of view, Solnit was a lyrical truth-teller. From another, a Boomer hypocrite, who benefited smartly from gentrification before decrying it.
It took until the following year for those inclined to the second point of view to find their voice, which came under the guise of a long post at TechCrunch by journalist Kim-Mai Cutler in which she tries to figure out how, as her title went, “burrowing owls led to vomiting anarchists.”

“NIMBY-ists in every city try and shove the housing issue onto someone else.”

To hear Cutler explain it, it wasn’t the tech industry that caused housing prices to skyrocket. Rather, it was a collective action problem: Too many people, for reasons that made sense individually, opposed new housing. That meant that, collectively, we were straight out of luck.
Thanks to homeowners protecting their prices, activists concerned about gentrification, preservationists fretting about the erosion of the physical traces of history, and environmentalists protecting those burrowing owls, San Francisco and the rest of the Bay Area simply had not built enough housing to keep up with demand. The city “has added an average of 1,500 units per year for the last 20 years. Meanwhile, the U.S. Census estimates that the city’s population grew by 32,000 people from 2010 to 2013 alone,” she wrote. And what was true of San Francisco was true of every other city in the Bay Area, which added some 600,000 people over the course of the decade: “NIMBY-ists in every city try and shove the housing issue onto someone else.”

The first time I met Sonja Trauss, we were breaking and entering. Coffees in hand on a sunny afternoon, we ducked under a railing at the Transamerica Pyramid to sit in a spot it didn’t quite seem we were allowed to be.
The former math teacher had just founded the SF Bay Area Renters’ Federation, an advocacy group of tenants that argued for more housing. It was the first moment in what became the “yes in my backyard” — YIMBY — movement. Trauss gives much of the credit for the spark to Cutler, telling me back then that the article “made organizing pro-density renters easier.”
Since then, the YIMBYs, and their elected allies, have notched several victories. In 2014, San Francisco Supervisor David Chiu narrowly defeated Supervisor David Campos, whose response to the housing crisis in his part of San Francisco was to propose a moratorium on market-rate housing construction, a measure that the voters defeated. Two years later, their colleague, Supervisor Scott Wiener won election to the state Senate. Wiener would go on to become the most consistent state legislator in working to accelerate the production of new housing, the author of a bill that would require cities to locate dense housing near transit hubs. YIMBY-supported candidates would also win office as San Francisco, Oakland, and San Jose mayors, although Trauss was heavily defeated in her own bid for the San Francisco Board of Supervisors in 2018.

"They aren’t leaving because they want to."

Trauss lost in part, she thinks, thanks to a perception that the YIMBYs still represent short-timers, young workers who are not yet invested in where they live. “It was so sad,” she says. “I would talk to people who had lived here for 20 or 30 years. They would say, ‘These young people come to this city and leave after three years. They don’t even care. They are just here temporarily.’ They aren’t leaving because they want to. They are coming here, really trying to stay, and getting pushed out. You see that happening, and you think they are here for an extended vacation, but it’s really a pathological process. They are displaced.”
And while it’s true that their groups have broad support today, the YIMBYs drew much of their earliest support from leaders of the technology industry, including a $100,000 gift from Yelp CEO Jeremy Stoppelman and fundraising help from Nat Friedman, a Microsoft vice president. Critics seized on that funding to claim that Trauss, were she not a shill for developers, was a tout for the reterritorialization of the cities by tech-fueled neoliberal capital. As former chair of the Berkeley Planning Commission Zelda Bronstein wrote in 2018, “Yimbys propagate the capitalist growth imperative. Using housing as a proxy for growth, they endow the limitless expansion of population with a seductive moral charge.”
And many in the tech sector went out of their way in the last decade to be impossible to defend. There were world-historical villains like Peter Thiel, the billionaire who sued Gawker into oblivion after it outed him, and Tom Perkins, the venture capitalist who wrote the Wall Street Journal a letter during the Google bus protest to “call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich.’”

We had local-level assholes, too.

There were state-sized targets of ire, too, like Sun Microsystems cofounder Vinod Khosla, who bought a coastal property in 2008 in Half Moon Bay, south of San Francisco, and tried to cut off access to the public beach there. Or venture capitalist Tim Draper, who made California voters waste their time on his proposal to split the state into six for no better reason, it seemed, than he was bored. Even San Francisco’s old money low-key hated guys like them, if you believe Vanity Fair.
We had local-level assholes, too. Startup founder Peter Shih wrote a 2013 Medium screed complaining that San Francisco was filled with “49ers, [women] who are 4's but behave like they are 9's." There was Greg Gopman, a hapless techie who excoriated San Francisco’s homeless in graphic terms. “In downtown SF the degenerates gather like hyenas, spit, urinate, taunt you, sell drugs, get rowdy, they act like they own the center of the city,” he wrote the same year. “Like it’s their place of leisure.” Then there was Sarah Slocum, who got thrown out of Molotov’s, a Lower Haight bar, in 2014 for wearing Google Glass and claimed she was the victim of a hate crime. And the less we talk about T.J. Miller’s 2015 performance at the Crunchies, the better.
And I haven’t even mentioned Larry Ellison, the Oracle cofounder who inflicted his fancy boat race on us in 2013, at which his yacht-racing team cheated.
Point being: This decade has been such that, were you inclined to agree with Cutler or with Solnit, you could find plenty of evidence to support your point of view.

As the decade comes to a close, in many ways we’re no closer to a synthesis than when we started. Tech’s villains continue to be awful, both individually and collectively. And our housing production remains anemic.
And yet there are signs of hope.
In search of it, I head to the roof of the Hamilton Families shelter in the Tenderloin. Here, standing next to her husband and Mayor London Breed, YouTube CEO Susan Wojcicki announces that she is donating $1.35 million to the nonprofit (Google.org gave $850,000 and Wojcicki $500,000). Wojcicki discovered the shelter, which houses 200 people and serves some 500 more, after her daughter was assigned a school project on homelessness. The two visited, and Wojcicki decided she’d like to be more involved.
The donation is part of a larger push by the tech giant, which bought the video site in 2006, to address housing and homelessness. In June, the company announced a $1 billion investment, comprising the development of 15,000 new homes on property it owns, a $250 million investment fund to support affordable housing subsidized for low-income people, and $50 million in grants to nonprofits. In October, Facebook made a similar commitment that it estimated at $1 billion and In November, Apple did too, at an estimated $2.5 billion.
Toting up all three, if all of the promised projects were to come to fruition, it would bring at least 35,000 new units of housing online (Apple has not made public how many housing units it intends to build), something like three times all the new housing construction in the region in the past year.
On the roof of Hamilton Families, I meet the chief of public affairs for Google in California, Rebecca Prozan. She’s something like a diplomat for the company, working to keep local officials as happy as they can be. It’s ironic, but although the company has power that exceeds nation-states, its plans to redevelop its Bay Area still need to be approved by city councils representing 80,000 people.Google would rather not be in the shuttle business, she tells me. Those commutes are long — two or three hours a day — and that’s why the company is hoping to develop mixed-use projects in San Jose, near the Diridon train station, as well across the region.
Prozan understands that the backlash to the industry in which she now finds herself is real. But she attributes it to a fear of change. The neighborhood restaurant closing. The owners of a long-popular bar deciding they wanted to sell. The shuttles became a visual representation of that, she thinks, but not the cause.

The shuttles seemed to have raised prices in areas right near the stops.

I do think she’s mostly right, although I disagree about the shuttles. Recently, I changed my mind on their impact, thanks to this research paper by Brian Asquith, an economist at the W.E. Upjohn Institute. He found that within a kilometer of the shuttles, prices of homes went up and so did evictions of renters. “A fair interpretation of my work is that the shuttles seemed to have raised prices in areas right near the stops,” Asquith told me. “Every kilometer you get closer to the shuttle stop, prices appreciated by 5 to 18%.”
But, as Prozan rejoins when I tell her about the study, that’s likely true of public mass transit as well — and not an argument against building bus and BART stops. And besides, she points out, commuting in a shuttle is better for the environment and congestion than commuting in individual cars.

As much as I find to agree with when I talk to Prozan, Google seems like an outlier. Too big, too rich, and frankly, there’s plenty on the negative side of the ledger. The day after we speak, the company fires a fifth employee activist for violating our security policies, according to Google. Google is so big and important that it’s only a stand-in for Google. To figure out what the Bay Area’s equilibrium might look like in the next decade, it helps to look elsewhere.
In the mid-Market neighborhood, a few blocks from Twitter and a massive fancy retail space that’s stood unoccupied since it was finished in 2016, is Zendesk. I’m in an upper-story office, surveying the Crazy Horse strip club with Tiffany Apczynski, the vice president of public policy and social impact at Zendesk, who points out that in renderings of a new building to be constructed next door to it, the architectural firm was careful to leave out the strip club. A former journalist, she still has an eye for a compelling anecdote, and I appreciate it, because it perfectly sums up the jostling tension between the old and the new, or the present and the future, here in the neighborhood that feels like the crucible of tech in San Francisco.
Zendesk, which makes customer service software, is far less known than Twitter. But it also benefited from the tax break, and now employs 1,100 people across 174,000 square feet in four buildings in mid-Market — including, oddly enough, the space where BuzzFeed used to have our San Francisco office. (We didn’t get the tax break.)

"Jackson, Mississippi, is in 1985, and they want to get an economy. So, careful what you wish for.”

In 2011, when Apczynski’s company moved here, it had 60 employees. “I recognized right away that this could go in a really bad direction,” she says, so she set about getting its coders and product managers out into the community, rubbing shoulders with people living on the streets. The company’s employees have run bingo games at the Curry Senior Center, assembled harm-reduction kits at Glide Memorial Church for people with drug addictions, and, as part of their first-day orientation, each one volunteers at the St. Anthony Foundation, which serves meals to the homeless. Next year, one of Zendesk’s designers will help St. Anthony’s redesign their clothing giveaway program.
“We didn’t want to be heroes,” she says. “but we did want to be neighbors.”
Apczynski is a 25-year resident of San Francisco, and plans to run for office here someday. But she worries that her 7-year-old daughter might not be able to afford to live in the city she’s growing up in. “If things don’t change, she probably won’t be able to afford to stay here. I want my baby girl living next to me as long as she can,” she says.
Apczynski recognizes that her company had to build trust — and that it took many years. And she’s not blind to the attitude that the Bay Area could solve many of its problems if it simply drove the techies into the Bay. She rejects that idea, though.
"I’m on the board of the San Francisco Gay Men’s Chorus, and in 2017 we went on a tour of the Deep South. Selma, Birmingham. Jackson, Mississippi. While we were there, I met some startups. They’re hungry to get venture capital. I think about that a lot when that San Francisco attitude comes to the forefront of, ‘Get out, I want to go back to 1985.’ It’s like, Jackson, Mississippi, is in 1985, and they want to get an economy. So, careful what you wish for.”
That said, she’s not tech supremacist either. She tells me something in passing that sounds simple, but is profoundly complex to achieve.
“Let’s be neighbors here,” she says. “Let’s be residents.” ●