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8/15/13 San Francisco split by Silicon Valley's wealth - latimes.com
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San Francisco is increasingly divided between young, wealthy tech workers and those who saythey are being pushed out of a city they can no longer afford.
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8/15/13 San Francisco split by Silicon Valley's wealth - latimes.com
www.latimes.com/business/la-fi-silicon-valley-backlash-20130814,0,762467,full.story 2/8
By Jessica Guy nn
August 14, 2013 , 5:00 a.m.
SAN FRANCISCO — Every weekday starting at dawn and
continuing late into the evening, a shiny fleet of unmarked
buses rolls through the streets of San Francisco, picking up
thousands of young technology workers at dozens of stops
and depositing them an hour's drive south.
It's an exclusive perk offered by Apple, Facebook, Google
and other major Silicon Valley companies: luxury coaches
equipped with air conditioning, plush seats and wireless
Internet access that ease the stress of navigating congested
Bay Area roadways.
The private mass transit system has become the most visible
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If the economy is up, why is the techindustry in a slump?
A Goog le sh u tt le picks u p w or ker s in Sa n Fr a n cisco to ta ke th em to th e tech g ia n t ’s ca m pu s. Biddin g
w a r s for r en ta ls n ea r th e sh u tt le bu s stops h a v e ca u sed r en ts to soa r , ev en dou ble in som e ca ses. (Liz
Ha fa lia , Th e Ch r on icle / A u g u st 2 3 , 2 01 2 )
8/15/13 San Francisco split by Silicon Valley's wealth - latimes.com
www.latimes.com/business/la-fi-silicon-valley-backlash-20130814,0,762467,full.story 3/8
symbol of the digital gold rush sweeping this city, and of the
sharpening division between those who are riding the high-
tech industry's good fortunes and those who are not.
"Some days I think of them as the spaceships on which our
alien overlords have landed to rule over us," Rebecca Solnit,
a longtime San Francisco resident, recently wrote in the
London Review of Books.
Fueling the growing rift is a common belief that the vast
wealth being amassed by the tech industry is not spilling over
into the community.
Instead, activists say, the high-tech invasion is driving up the
cost of living to levels that more San Franciscans cannot
afford.
They say that a dramatic increase in rent, housing prices and
evictions has sharpened income inequality and squeezed out
more middle-class families, small businesses, artists and
intellectuals, the people who gave San Francisco its rich and
diverse cultural appeal.
Ground zero for this growing array of grievances is the
Mission District, a historically working-class Latino
neighborhood where Victorian flats and newer lofts have
been overrun by techies.
Heated bidding wars — especially in a half-mile radius of
shuttle bus stops — have broken out, causing rents to soar,
even double in some cases. Along shuttle routes, trendy new
restaurants that serve high-end food and spirits have taken
the place of corner stores and mom-and-pop businesses.
Anti-Google graffiti has turned up here, and activists recently
held a small anti-gentrification rally at which they smashed a
Google bus piñata. Last year, a Google bus driver was caught
on video threatening a bystander for photographing a shuttle
blocking city buses and bicyclists.
Ted Gullicksen, executive director of the San Francisco Tenants Union, said he fears that the techies
are permanently inheriting the city and won't pack up and leave as they did after the 2000 dot-com
crash.
"In the first boom, many of those companies went belly up. Now we are talking about some pretty
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8/15/13 San Francisco split by Silicon Valley's wealth - latimes.com
www.latimes.com/business/la-fi-silicon-valley-backlash-20130814,0,762467,full.story 4/8
well-established Internet companies such as Facebook and Google. It's hard to envision them going
belly up, and that's what rescued us the first time around," Gullicksen said.
Unlike in previous booms, the tech industry isn't creating as many middle-class jobs or as much
goodwill. The gap between Silicon Valley's high and low earners is widening, with average per-capita
incomes going up while median household incomes have fallen for the third consecutive year,
according to Joint Venture Silicon Valley, a private group that publishes an annual report card on
the region.
In a region that lays claim to some of the world's wealthiest companies, food stamp participation has
hit a 10-year high, and homelessness has increased 20% in the last two years, the group found.
That has led to some pointed criticism — some of it coming from within technology's own ranks.
San Francisco entrepreneur Chris Tacy admonished fellow techies about their boorish behavior in a
series of blog posts after watching a young man reluctantly give up his seat on a bus to an elderly
woman and then say loudly to his friends: "I don't know why old people ride Muni. If I were old, I'd
just take Uber."
Techies frequently use their smartphones to hop rides with the Uber car service to get to and from
work and around town. The gleaming armada of black town cars and limousines is another reminder
to some in San Francisco of the growing divide.
Uber, which is headquartered in San Francisco, raised eyebrows over the Fourth of July weekend
when it offered New Yorkers the "ultimate freedom from the crowds, the traffic and the long trip out
East" to the Hamptons: a rented helicopter for $3,000.
"Blair Waldorf, Don Draper, and Jay Gatsby got nothing on you. This is the epitome of luxury,
convenience, and style," Uber boasted in a blog post.
It's just those kinds of showy displays of wealth that grate on people here.
Billionaire Napster founder and former Facebook executive Sean Parker spent millions on his
fantasy June wedding in the Big Sur woods. Last year David Sacks, a former PayPal executive who
founded Yammer, threw himself a birthday party rumored to cost $1.4 million with the Louis XVI-
theme "Let him eat cake."
Google's three top executives — Larry Page, Sergey Brin and Eric Schmidt — are building their own
private $82-million corporate jet center at San Jose International Airport. It will have five hangars
on 29 acres, with one hangar large enough to accommodate a Boeing 747.
If resentment of the growing wealth and power of the tech industry is building, "we are bringing this
on ourselves," Tacy said.
"A lot of people in the U.S. don't have economic confidence in the future and at the same time you
have a lot of tech wunderkind becoming billionaires," he said. "It's a volatile combination."
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8/15/13 San Francisco split by Silicon Valley's wealth - latimes.com
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Matt Brezina, who has founded two companies here and lives in San Francisco, says the wave of
gentrification is inevitable. People are being priced out of San Francisco as they have been out of
other highly desirable cities such as Manhattan, Tokyo and London. He acknowledges "a bit" of
conspicuous consumption, but says it's not the norm for this generation of techies, many of whom
have given millions to charity.
"We have a bit of a different culture here that kind of frowns on that," he said. "We don't wear Prada,
and we'll drive a Porsche but not one we own. Who wants to own a car? We drive Porsches on track
days at Laguna Seca."
But a recent article in the New Yorker magazine made some here squirm. The author, George
Packer, pointed out that Silicon Valley has 50 or so billionaires and tens of thousands of
millionaires, but also record numbers of poor people.
"After decades in which the country has become less and less equal, Silicon Valley is one of the most
unequal places in America," he wrote.
Jake Levine, general manager of Digg, said in a recent blog post that he was guilty of "pretty much
every arrogance" the piece called out and pledged to become more involved in addressing real-world
problems.
Theresa Flandrich, 58, who shares a small, $645-a-month one-bedroom apartment with her 25-year-
old son in North Beach, one of San Francisco's oldest neighborhoods, said she would like to see
young, wealthy technology workers connect with the communities in which they live.
Most young technology workers order food and supplies online, so she doesn't run into them at the
corner store. They keep their noses buried in their smartphones when they walk on the streets and
don't volunteer in the community, Flandrich said.
She has seen a sharp uptick in evictions under the Ellis Act, the state law that allows a landlord to
evict all tenants of a building if it is being taken off the rental market. And now she and the other
tenants in her building — some elderly and disabled — have also received eviction notices. She is
facing the prospect of leaving the neighborhood where she has lived for three decades.
Her son, like most young people, wants to be able to move out and live on his own even as the city
gets more and more expensive.
So he's hunting for a job as a recruiter in the tech industry.
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