When the Google Bus Stops: Change, Inequality, and Indifference in Silicon Valley

This piece was published in parts in The Dish Daily and The Stanford Daily last month.

google bus


For the Google employees onboard the Google bus headed for its Mountain View headquarters, confronting that jarring message probably wasn’t the best start to their morning. Protestors in Oakland attacked a Google bus last month, smashing a window and distributing fliers calling for a moratorium against evictions of residents in Oakland. It is tempting to see this as an isolated incident mounted by some disenchanted luddites, but it isn’t. Just last week, San Francisco activists blocked an Apple bus, parading a wooden coffin bearing the words “Affordable Housing”.

Just what is going on? Why, for all the ostensibly democratizing nature of the technology celebrated by Silicon Valley tech companies, are their employees seen as “chums living on free 24/7 buffets driving up housing prices” ?

There appears to be some sort of hipster-on-hipster hatred going on in the city, not unlike the fuzzie vs. techie torsion pervasive on the Stanford campus. But just as the psychology of the fuzzie vs. techie tension runs deeper than humanities majors hating on computer science, the protestors are not taking to the streets because they are against technology per se. Tech work isn’t some harbinger of evil, and there is no reason to believe that SF residents see tech as the enemy, even if pictures of angry banners going viral online tempts us to. Soon after the incident, the University of San Francisco had released a poll suggesting that bread and butter issues – i.e, affordability of housing – is at the heart of the debacle.

Partly because of the recovering real estate market and the tech boom in the Bay Area, housing prices have escalated dramatically: the median price of a home in San Francisco topped USD$1 million earlier this year, while the median rent for a two-bedroom apartment is USD$3250, the highest in the country. Over the past year alone, the whole Bay Area has seen a 22% increase in home prices. Between 2010 and 2013, median rent in San Francisco rose 15%, and 2013 alone saw 1716 evictions, the majority of whom have been seniors and people with disabilities. Existing residents in the community are being squeezed out by young yuppies working in the tech industries desiring to experience the frission of urban life.

The root cause of the problem doesn’t lie solely with Google, Apple or the rest of the tech industry, although they had been specifically called out in the protests. The simplest explanation is that, for a multitude of reasons – access to jobs being one, the allure of city life being another – many have chosen to live in San Francisco. In a way, this is a happy problem that other declining cities in US can only dream of, but its fast growth and rapid influx of workers is causing a housing crisis, making it a victim of its own success.

The real fault, I think, lies in San Francisco’s housing policies, which have not responded to the surge in demand. Thanks to restrictive zoning laws, a Byzantine permit process and a pathological culture of NIMBYism, housing supply has stalled. Barely 1500 new housing units per year have been built over the past two decades, which is half of what Seattle (a tech economy not unlike the Bay Area’s) produces in a year. In 2011, only 269 units were built while the city added over 40,000 new jobs in 2012 alone. Because infill development has been met with active resistance in San Francisco, regional population growth has to be pushed elsewhere – to Oakland, the Brooklyn of the Bay Area.

So why have tech companies become a target in recent protests? Why are lines being drawn for a battle between techies and non-techies?

A probable answer: this is not merely about housing policy, but also about change and inequality.

Change, it must be understood,  is not a tide that lifts all boats. When it comes too fast, too quickly and with indifference to  (un)fairness, resistance is to be expected. In the face of change, it is easy to see who will have to make way: the poor, the older, the less code-fluent, and yes, the less-white. The manifest dissatisfaction towards tech money makes clear one thing: that the tech sector, for all the paeans it sings to egalitarianism, is not exempt from the host of inequalities we see throughout the country.

Silicon Valley is a place where “the right kind of nerdy” does well, and “the right kind” happen to be white or Asian, and male. The gut instincts pervasive in the Bay Area is not free from ethnic or gender biases. Follow the money, and these biases readily reveal themselves: in Silicon Valley, 89% of founding teams of Series A startups are all-male, and only 3% all-female (Curiously, almost 1/3 of Massachusetts’ founding teams are all-female) 83% of founding teams that received seed money are all-white, compared to less than 1% that are all-black – and the latter get way less money than their Asian and White counterparts. Should we even be surprised to learn that the median income for households in Bay Area headed by non-Hispanic whites is $77,000, compared with $26,000 for those headed by African-Americans?

The city that boasts breathtaking views of San Francisco Bay and the 5th highest concentration of millionaires in the country is also where 10% of households subsists on less than $10,000 a year. Mission Street, home to a motley crew of crack dealers and social-security poets, is only some 300 metres away from Valencia Street, which bears high-end furniture stores and pricey restaurants. Social dysfunction juxtaposed against fabulous wealth is creating an ecosystem that doesn’t look too different from Wall Street.

Against this backdrop, tech company shuttles like the Google buses are seen as a homogenizing onslaught of a tech progeny that is changing the fabric of the city in a way that the existing community find alienating. Eric Rodenbeck did a wonderful visualization of the specific conduits and corridors by which this change is being delivered, and as he let the maps do the talking it became clear that they are virtually (and physically) dividing the city. Private networks are starting to supplant public infrastructure, effecting what he observes to be the replacement of “an entire system of urban inter-relationships, built up over generations and stratified in ways that make sense within an urban context…by the inexorable demands of the (suburban) digital technology landscape.” With their presence felt everywhere, tech companies are short-circuiting physical arrangements and changing the sense of place for existing communities.

It doesn’t help that, for all the tax breaks tech companies receive from the state, they are not giving back sufficiently to the community. At a time when the community is demanding that the tech sector contribute through civic engagement – not apps – Silicon Valley’s tech sector is actually giving less. And wealth generated from tech growth is not trickling down to families in the region as much as is hoped. While talent clustering has been a key strategy of global cities aspiring to move up the value chain, Richard Florida finds that the trickle-down effects that result benefits only the most advantaged third of the workforce (i.e, knowledge, professional and creative workers). For less-skilled blue-collar and service workers, this benefit disappears with higher housing prices, which is precisely what we are seeing in San Francisco.

The full effects of gentrification may be more insidious when we take into account migratory dynamics that create an additional level of inequality: inequality of well-being, in which highly-paid skilled workers benefit doubly from high wage and high amenity city neighborhoods. Research by Rebecca Diamond has found that because high-skill workers are more sensitive to amenities and low-skill workers to wage, high property prices disproportionately discourage low skill workers from living in high wage, high amenity cities. According to Diamond, well-being inequality is an additional 20% higher than is predicted by simple wage gaps between different classes of workers.

Perhaps this should give pause to those who say the ongoing gentrification is just another form of the constant change that people shouldn’t fuss over. The right question to ask is: change in favor of whom? The protestors who stopped the Google bus last month were not against change per se; they were against changes that are stacking the odds against them, and that dampen the conditions for upward mobility in an increasingly unequal society. Not to mention the indifference of tech companies that are making their millions and not giving back to the community in which they thrive. Even when they do, they do so in their own (self-serving?) image: providing free wifi in parks – as Google has done – is all good and well, but more urgent concerns like food security, homelessness, dysfunctional public schools are not problems that can be solved with free-wifi or laptops.

Given that Silicon Valley, San Francisco and the wider Bay Area are all hotbeds of progressivism, there is something very ironic about the pervasiveness of inequality in the region. The East-West Palo Alto contrast is the single biggest contradiction lying right at the doorstep of the Stanford bubble I live in. On one side of Highway 101is the heart of Silicon Valley wealth; on the other side is a district fallen into disrepair, with homeless tiding nights in broken vans and RVs. There is something unsettling about the fact that Silicon Valley, home to innovations, and birthplace to arguably the most democratizing technology of the human kind – the Internet – is looking the way it does.

I suppose that was what prompted George Parker to pen his critique of the Valley, in which he called out tech employees for their libertarian mindset. And while I agree with him on many counts, I don’t think Silicon Valley is made up of libertarians or greed-is-good market fundamentalists. The techies being shuttled daily to their suburban tech offices are not your Wall Street financiers wearing hoodies. Silicon Valley is fundamentally different from the Republican stronghold that Wall Street is: after all, Google employees gave more than 97% of their political donations to Obama, with comparable percentages at Apple and eBay. So make no mistake, we are not talking about anti-tax or anti-government libertarians here.

In fact, there is something very admirable about the way Silicon Valley tech companies distribute their wealth internally: it is way more egalitarian. Virtually all tech companies distribute equity in the form of stock options to ordinary employees – the top 100 tech companies granted 19% of total ownership to non-executive employees, while for the rest of corporate America, that figure stands at a measly 2%. It explains why San Francisco is seeing the influx of young millionaire-software engineers who are inadvertently contributing to the real estate crisis.

But such egalitarianism is circumscribed within the bounds of the industry itself, and striking inequalities in San Francisco, East Palo Alto and Berkeley exist in spite of  strong progressivism there. So we find the paradoxical situation in which the very forces behind the democratizing potential of the Internet are generating inequalities in the real, physical world. The truism that technology can better the world sometimes seem like an outsized promise that Silicon Valley struggles to live up to. And the tech industry, while admirably egalitarian in some ways, is also indifferent and insensitive in others. Seen in this light, the smashing of the Google bus was merely a reaction to inaction.

All this should remind us that action and change does not follow naturally from belief and ideology. The guiding vision in Silicon Valley has been a tech-centric one that, for all its better-the-world rhetoric, holds out little promises. It falls on the affected communities to make demands, and last month they have spoken loudly. While fixing the housing policy in those areas will be most important, it also falls on the techie-newcomers to think of the city as more than an idea, but also a place, a physical space that has its history, communities and problems that they, by virtue of living there, are also enmeshed in.

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