#libbyschaaf

*EDIT* I was wrong! While there were some early reports of a bidding war between Google and Facebook, Uber turned out to have the highest bid that won the lease for the old Sears building. Nonetheless, all of my assertions about technology companies, employees and gentrification still hold ring true here.

The issue that’s top of mind for me right now that I’d like to discuss is the gentrification of Oakland, California. Specifically, I’ve heard from multiple sources now that the old Sears Building in downtown Oakland on Telegraph Ave. will be leased out to either Google or Facebook. The two are in a bidding war from what I’ve heard for the lease and I wanted to take a moment to discuss how dramatically their entrance will change the area.

Why would Google/Facebook want to open an Oakland office? First, a quick aside about Oakland and certain parts of what is considered, “The East Bay.” The East Bay (specifically Berkeley/Oakland/Emeryville/Alameda) is now one of the trendiest areas to live in the United States, and several people have described it as the analogue of Brooklyn (and even more people loathe that comparison). 

There is no way one can empirically dispute that Oakland is growing in popularity and that means that demand for housing is going up. Meanwhile, the amount of housing units stayed relatively constant, due to a combination of burdensome regulation and powerful neighborhood associations. I don’t have number on this yet, but I look forward to comparing the percentage growth in demand for Oakland housing in the last five years to the percentage increase in total housing units. 

Regardless, demand for housing is going up. So the Econ 101 lesson that I can apply here, is that when Demand Goes up, and Supply stays constant, Price goes up. That is what we are seeing with housing and rent prices in Oakland and in the East Bay. This perfectly describes gentrification, where, “the arrival of wealthier people in an existing urban district increases rents and property values, and changes in the district's character and culture. The term is often used negatively, suggesting the displacement of poor communities by rich outsiders.” That’s the PBS definition.

So back to the question: why would Google and/or Facebook want to open an Oakland Office? They want to have access to the talent pool in the East Bay. There are tons of brilliant people coming out of UC Berkeley (especially data scientists and engineers) and some of the most creative and interesting millennials I know choose to live in Oakland, even the ones who can afford to live in San Francisco. Oakland is a community of technologists, artists, writers, chefs, musicians, activists, and so many more incredible people. And it’s been beautiful to watch the city evolve.

Now big tech companies like Google and Facebook make a very concerted effort to ensure their employees’ lives are easy and comfortable. Their campuses are sprawling and luxurious, with all the ping pong tables, free food/beer, green space, gyms and incredibly smart people that one can ask for. 

The big challenge for tech companies like Google and Facebook is that their campuses are in the South Bay, specifically Palo Alto, Menlo Park, Mountain View and other surrounding cities. That area on the whole is significantly more suburban and quiet. Males are also heavily overrepresented in the demographics, largely because they’re more likely to pursue STEM careers that lead to working in technology companies. Young (heterosexual) men especially dislike the gender imbalance because it means less dating options and women also dislike it for multiple reasons. Being a cis man, I don’t feel comfortable speaking on behalf of all women, but I would imagine one reason is that male-dominated environments (at least mostly male workplaces) are usually more conducive to misogyny and hypermasculinity.

For most millennials I know, specifically young professionals in their twenties, the prospect of living in the South Bay is absolutely dreadful. The only thing that’s worse in their eyes is commuting over two hours a day from the East Bay to the South Bay. No amount of free Wifi on a Google bus can make the freeway a pleasant place to spend over 10% of your waking hours.

Many young professionals also obviously choose to live in San Francisco, which has its own very serious challenges with gentrification, but even the wealthiest young professionals I know are constantly frustrated with the cost of living in the city.

Ultimately, this makes the East Bay, specifically Oakland, the perfect place for Google/Facebook to open its next office, but there’s undoubtedly a lot of hostility surrounding tech companies moving into the area, mainly because their entrances all but guarantees an increase in rent prices and the cost of living. Minorities get squeezed out, and so do the artists that make the city so vibrant and unique. The higher rents make way for tech employees with stable incomes who want to live somewhere trendy and close to their place of work. 

The artists and the minorities move out and they do not get to enjoy the newfound wealth in the area. This is especially disconcerting for minorities like Blacks and Latinos, specifically because these groups are so economically disadvantaged, relative to their white counterparts. On average, the White American’s net worth is twenty times higher than that of Black Americans. These minorities also have lower rates of property ownership, less education in STEM fields, which makes it even easier to squeeze them out.

The case that I would like to make (and the point that I believe is relatively unique) is that the entrance of technology companies to these gentrifying areas can be a good thing, and the upside can be enjoyed by the broader population if the change is managed responsibly.

First of all, Google and Facebook are not Walmart or ExxonMobil. One thing that makes me optimistic is that big tech companies generally have more progressive leadership, more progressive employees, and make a pretty concerted effort (most of the time) to ensure that their growth is socially responsible. They also create and manage products that are genuinely innovative and beneficial to humanity, like Google and the self-driving car. For example, Twitter has been really critical in facilitating social change. Many people argue that Twitter served as a major catalyst for the Arab Spring, even if was not the cause. At the very least, it was a tool that made organizing social action easier. 

These sentiments are pretty controversial and I think it’s very trendy to hate big tech companies right now, largely because they know everything about us and their employees do honestly play a huge role in gentrifying areas and displacing minorities. It’s an accurate critique and I know they have a lot room to improve. But I would take a Google moving into my city over a Walmart any time, any day.

It should provide us with some comfort knowing that these companies are more concerned about environmental degradation and income inequality than the last generation of megacorporations, even if their products and operations exacerbate these issues. 

It’s not going to be easy, and it’s definitely not a guarantee, but I firmly believe that there is a way to manage the entrance of these companies into Oakland that allows all of the city’s residents to experience some upside.

The most obvious upside to me is that broadening the tax base (although both companies are notorious tax avoiders) will bring in funding for municipal projects, like infrastructure development and education. Those are so important. And lord knows that development in these areas (public transit, better schools) is not happening at a nearly fast enough pace anywhere in America. At the very least, there will be more sales tax collected by way of the employees spending on Oakland businesses, which means more money in the city’s coffers. It would also be great if the new offices had some form of public space, since that can certainly add value to the urban experience. Tech companies like Google and Facebook are so vaulted right now that open spaces associated shared with them or even in close proximity could be tourist attractions. That means more spending and thus more sales tax. Tourists suck, but they spend money. And that’s important for a city like Oakland, where there is so much inequality and crime. 

So here’s what I want this blog to be: a canvas for candid, unabashed optimism about technology, millennials and the two’s ability to make shit better for everyone. Right now, I think that optimism is truly what’s lacking from the popular dialogue about tech and millennials. And it’s easy to be cynical. But there’s a way we can do this right. We just have to give a fuck. 

Full Disclosure: I do not work for Google or Facebook (or anyone, really) right now. I own a few shares of each of them (less than $5,000 total as of June 2015) because I’m confident in their security as an investment. But more than anything, I want to have a voice in seeing them make the world better and I am eager to see them act more responsibly.

Sources

Forum Discussing whether or not Google will Move into the Building; 

https://groups.google.com/forum/#!topic/openoakland/DKIepKGv6pM

Next City article citing, “sources close to the project” saying Google is looking to expand there.

 http://nextcity.org/features/view/oakland-gentrification-libby-schaaf-tech-industry-inequality-foreclosures

Bizjournal article discussing the acquisition of the Sears building, the renovations, and it being a “springboard for more tech companies coming to Oakland;

”http://www.bizjournals.com/sanfrancisco/blog/2014/11/oakland-tech-company-sears-building-twitter.html?page=all

Article about San Francisco being the most expensive city;

 http://www.cbsnews.com/pictures/10-most-expensive-cities-in-america/5/

Article about White Net Worth being 20 times Higher than Black net worth, Christian Science Monitor;

 http://www.csmonitor.com/USA/2011/0726/Wealth-gap-widens-Whites-net-worth-is-20-times-that-of-blacks

Definition of gentrification;