Tech Rides Are Focus of Hostility in Bay Area

[cwerdna]

Ah, ok. So people that just like complaining. Glad I haven't wasted any mental effort on them.

Well, AFAIK, at least for the SF Bay Area ones, they just want to see "rich" tech workers move out and not come.... and if the shuttles are banished, that means fewer of them will want to tolerate the commute w/o the shuttles. That still doesn't solve the bigger issue and then the traffic problems would get far worse, to boot.

But yeah, it's similar to Occupy Wall Street. Seems like they didn't have any realistic solutions either.

 

[AnOutsider]

As has been discussed a few times, one of the big issues in both cases is the gentrification of the neighborhoods. Really well paid techs are flooding into remote areas where the shuttles service and driving up the cost of living (primarily rent from what I can tell) for those who have lived there comfortably before. They're worried about being forced out of their homes.

 

[Robert.Boston]

Are the shuttle services treated as taxable benefits? If not, why not? This would seem the most obvious mechanism for putting money in city coffers related to the shuttles.

 

[AnOutsider]

Are the shuttle services treated as taxable benefits? If not, why not? This would seem the most obvious mechanism for putting money in city coffers related to the shuttles.

Not sure that would change the whole gentrification thing. If you have an area/town where the average rent is $500/mo (making these #'s up), then wealthier folks start moving in, and soon the prices are averaging 1500-2k/mo as competition gets fierce, you're going to drive the lower class residents out. Why wouldn't a landlord take double or triple the rent if they can? If the locals aren't getting these tech jobs and a salary increase too, I'm not sure how much the city getting extra tax revenue (or any revenue at all to be honest) makes a difference.

Though, I guess the case can be made that if the locals are locally employed, then perhaps the local shop-owners can see a come up based on the spending of the techies and pass that on in wages.

 

[SwedishAdvocate]

.../ If you have an area/town where the average rent is $500/mo (making these #'s up), then wealthier folks start moving in, and soon the prices are averaging 1500-2k/mo as competition gets fierce, you're going to drive the lower class residents out. Why wouldn't a landlord take double or triple the rent if they can? /...

In Sweden we have a little something called The Swedish Union of Tenants.

The Swedish Union of Tenants: Our fundamental principles | In English | Hyresgästföreningen

It works like a charm. The dude(s) that own the apartment I rent are trying to raise my rent. But thanks to the laws on the books in Sweden and The Swedish Union of Tenants negotiating for me, my apartment owner can’t just set whatever rent he wants.

The hard part is of course as always getting people organized, but a Union of Tenants is one thing they could work to set up instead of just picketing in front of busses.

 

[brianman]

As has been discussed a few times, one of the big issues in both cases is the gentrification of the neighborhoods. Really well paid techs are flooding into remote areas where the shuttles service and driving up the cost of living (primarily rent from what I can tell) for those who have lived there comfortably before. They're worried about being forced out of their homes.

I guess I just don't understand the concept well enough.

I would expect the course of a city's development either (a) improves or (b) decays, typically in waves one direction and then another. With wealthier tenants coming in you get (a). With protectionism of existing tenants you get (b). As an investor or owner, if I see (b) I would plan to move to somewhere else which means you get acceleration towards (b). So is the goal to block (a), which I posit leads to (b), and then pushes the city towards street crime and such? This reminds me of other races to the bottom.

What am I missing?

 

[SwedishAdvocate]

.../ If the locals aren't getting these tech jobs and a salary increase too, I'm not sure how much the city getting extra tax revenue (or any revenue at all to be honest) makes a difference. /...

The extra tax revenue can be spent on raising wages for people working in the public sector. And one way to make sure such a pay raise do become reality is to organize the workers in a trade union, since no one rarely gets anything out of thin blue. If you want your wage raised, you’ll have to get it raised yourself. And banding together with others (other brothers and sisters in the workforce) is sometimes the only way.

The extra money these public sector workers earn, can then be spent in the local economy to the benefit of local private sector workers and small businesses.

 

[brianman]

And one way to make sure such a pay raise do become reality is to organize the workers in a trade union

We've already got a thread on unions. I really don't want to have to start arguing this stuff again here.

That said, this is another example of things that would make me plan to move somewhere else. More specifically, if the governing body doesn't see the value of such workers increasing in such a case and pay them increased wages to match it, the city is on the downward spiral. Consequently, if a union needs to be formed to force that issue the city is on the wrong path already.

 

[AnOutsider]

Yes, let's please not turn this into a union thread. I don't think this is anywhere near that. As for the economics of it all, I won't pretend to understand long term effects in either direction. Simply trying to shed light on what issue the protestors have as I understand it.

 

[stopcrazypp]

thanks to the laws on the books in Sweden and The Swedish Union of Tenants negotiating for me, my apartment owner can’t just set whatever rent he wants.

In San Francisco, we have something similar, it's called rent control which limits the amount of rent the owner can increase. However, there are ways around it and landlords are increasingly using those ways.

 

[SwedishAdvocate]

@Brianman and AnOutsider: No need to worry. I’m just describing something that has worked in Sweden, Norway and Denmark.

 

[gg_got_a_tesla]

In San Francisco, we have something similar, it's called rent control which limits the amount of rent the owner can increase. However, there are ways around it and landlords are increasingly using those ways.

Right, it's the Ellis Act here in SF that allows landlords to choose to get out of the rental market altogether (for a period of time) and thereby evict low-rent paying tenants:

Ellis Act - Wikipedia, the free encyclopedia

Here's an article that digs a bit deeper:

Missed connections: Limbo in high tech's culture clash | Tech Culture - CNET News

 

[SwedishAdvocate]

In San Francisco, we have something similar, it's called rent control which limits the amount of rent the owner can increase. However, there are ways around it and landlords are increasingly using those ways.

Then you can always work with others to pass additional juridical protection that prevents these kinds of ‘workarounds’…

 

[stopcrazypp]

I guess I just don't understand the concept well enough.

In terms of tax revenue to the city (using San Francisco as an example), it comes mainly from: property tax (~30% of total overall revenue), business tax (~15%) and other miscellaneous taxes (~20%, taxes on hotels, parking lots, etc). Intergovernmental revenue from the state makes up ~15% and likely includes local sales tax revenue as the state collects that.
http://sfcontroller.org/modules/showdocument.aspx?documentid=4497

In terms of property tax, gentrification of the rental market does not increase revenue (as these techies are renting, not purchasing). Business tax revenue doesn't increase except indirectly (from their shopping at local businesses) because these people are not working in the city (San Francisco business tax is based on employee payroll). The other miscellaneous taxes might increase if they buy things locally (although not a guarantee) and park locally (N/A for shuttle riders).

Overall there's not really a whole lot of extra direct tax revenue provided by this crowd (which previous tenants didn't provide already), simply because they aren't planning to purchase a home or work in the city (which really would give significant funding for city development). The only way for the city to really benefit is a tax on rental income or a general city income tax.

 

[SwedishAdvocate]

We've already got a thread on unions. I really don't want to have to start arguing this stuff again here. /…

Yes, let's please not turn this into a union thread. /...

The thing is though, that no one objects when something like this is posted:

…/I would expect the course of a city's development either (a) improves or (b) decays, typically in waves one direction and then another. With wealthier tenants coming in you get (a). With protectionism of existing tenants you get (b). As an investor or owner, if I see (b) I would plan to move to somewhere else which means you get acceleration towards (b). So is the goal to block (a), which I posit leads to (b), and then pushes the city towards street crime and such? This reminds me of other races to the bottom.

What am I missing?

We've already got a thread on unions. I really don't want to have to start arguing this stuff again here.

That said, this is another example of things that would make me plan to move somewhere else. More specifically, if the governing body doesn't see the value of such workers increasing in such a case and pay them increased wages to match it, the city is on the downward spiral. Consequently, if a union needs to be formed to force that issue the city is on the wrong path already.

But as soon as someone introduces an alternative perspective everyone immediately objects… :crying:/:wink:

 

[lorih]

I tried to not respond here, as this is a complex topic, and tempers tend to run hot, but I have some personal experience here, and I will try to separate opinion from facts.

1. I am pro-environment, so anything that promotes shared transportation in a crowded area I am all for.
2. I am pro-tech. I think Silicon Valley brings many benefits to the local economy, and to the world at large (we are after all having this discussion on a Tesla Motors enthusiasts forum).

On the other hand

1. The Google bus that was vandalized was stopping at local city bus stops and picking up highly paid tech workers (for free) to drive them 1-2 hrs (each way) to Mountain View, home of Google.
2. That same ride would either not be feasible by pure ‘public transportation’ or would take 3x longer. I have ridden the bus system in SV, and many of people riding are low income, elderly and disabled. Most everyone else has a car here, or makes the conscious decision to live close to work so they can bike or take a much shorter public transportation route.
3. Rents are incredibly expensive here and continue to increase. A recent news article quoted that between 2010 and 2013 rents went up 10-12% per year.

Personal local example:

I live in Mountain View, home of Google. In my complex a small (550 sq ft) Junior one bedroom (more like a studio, than an actual one bedroom) goes for $2000/mo. When the lease ends the management raises the rent $200-300/mo each year (9.5-14.2% increase monthly), unless you resign a lease 3 month prior to first least ending. (In my case, they offered to raise it only 4% per month if I signed 3 months early, but I get a penalty of $3500 if I want to break my lease).

If I wanted to go ‘monthly’ after my 1 year lease, the rent would go to $4,000/mo Yup, that’s right, $4,000/mo for a 550sq ft apartment, just to live 2 miles from Google headquarters.

Most of my neighbors work for Google. Most of my neighbors only stay 3-6 months. Google puts a lot of their new hires in this complex.

I believe that the management prefers to rent monthly to Google for 3-6 months (part of a high tech moving package for new hires) and turn over the apartments, than have a stable consistent renting community of leaseholders.

The location of the vandalized bus is 1-2 hr commute driving. Most Google employees are too busy to drive 2-4 hrs per day, so they wouldn’t be living further out of SV in Berkeley, Oakland or SF if they had to drive themselves (my assumption, but I have a lot of friends that work for Google, and I don’t think it’s a stretch.)

Having a free bus so that they can sleep or work during the commute makes it easier for them to live further away and not pay the outrageous rents closer by, but it also means that as they move further out, the rents where they move tend to increase over the original base prices.

I love Google, I love SV, I love public transportation, I love the extra perks the techies get for working at cutting edge companies. But, not everyone is a single male engineer here. There are families here, teachers, and other people that struggle to afford to live here. Now you can say, “Well, if they can’t afford it they should move someplace else” but there are less and less places in California that are affordable, and it is really hard for people with families, and people that have lived their whole lives in one place to just pick up and leave and start someplace new, especially if they are now older, have limited income or are disabled/ill and need the support of friends and family.

I’m sorry this was so long, but this is a complex issue and I wanted people to see both sides.

I do agree that rent control would help (i.e. landlords can raise the rent as much as market once the renter leaves, but have limits to raising it year after year when someone is trying to live there). Other than that, I don’t know what the answer really is.

Unfortunately, I don’t think Silicon Valley is the type of place that will embrace rent control.

 

[AnOutsider]

Thanks lorih, for giving some context

 

[SwedishAdvocate]

…/ I do agree that rent control would help (i.e. landlords can raise the rent as much as market once the renter leaves, but have limits to raising it year after year when someone is trying to live there). Other than that, I don’t know what the answer really is. /…

Tax financed, rent-controlled housing built and owned by the public sector (a private sector builder does the actual architectural work/engineering/building though)?

That has worked in Sweden.

But yeah, I can imagine the reactions to such an endeavor/proposal in the opposite political camp… :wink:


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And also:

Isn’t Google’s motto “Don’t be evil”?

How much money does Google have?

Couldn’t Google set up a subsidiary corporation that builds, owns and maintains housing of different kinds for zero profit (or some reasonably low profit margin that allows this subsidiary to continue and build more housing as long as need be)?

The goal of this subsidiary would be to address the supply-demand issue that is driving rents ‘through the roof’.

Yeah, I know You’re welcome! :wink:

 

[tenstringer009]

Tax financed, rent-controlled housing built and owned by the public sector (a private sector builder does the actual architectural work/engineering/building though)?

That has worked in Sweden.

But yeah, I can imagine the reactions to such an endeavor/proposal in the opposite political camp… :wink:

I'm not sure what the set-up is like in Sweden, but when I was in college I worked on developing and financing a conceptual low-income housing project in Central California, and let me just say, it is NOT easy. Granted, I certainly was not an expert at it, but when you combine the high real estate costs with a very convoluted low-income housing program, it would be very difficult to pull a large scale project off in the Bay Area. Trying to get anything built in San Francisco is a challenge with it taking some developers 15+ years to get their projects off the ground, so it would be very difficult for anyone to plan a low-income housing project in SF given all the variables (supervisors' approval/possible ballot measure, state funding once your project is actually approved, cost projections from initial concept to groundbreaking, etc.).

It's a tough situation all the way around and not one that will be solved easily. After all, on the aggregate I think America prides itself on capitalism, and that's the line of thinking the landowners are going down. I'm sure I'd be upset if I couldn't get a tenant to leave for a new one who would be willing to pay 2x+ whatever the current one did. There's a very delicate balancing act that needs to happen between owner and tenant rights.

- - - Updated - - -

And also:

Isn’t Google’s motto “Don’t be evil”?

How much money does Google have?

Couldn’t Google set up a subsidiary corporation that builds, owns and maintains housing of different kinds for zero profit (or some reasonably low profit margin that allows this subsidiary to continue and build more housing as long as need be)?

The goal of this subsidiary would be to address the supply-demand issue that is driving rents ‘through the roof’.

Yeah, I know You’re welcome! :wink:

That's crossed my mind too. Unfortunately, even with Google's deep pockets, once anyone got wind of them trying to buy up a section of property, you'd better believe the last hold-out would be asking for an insane amount of money. Ideally you'd have Google/Facebook team up to do some community investment/rebuilding in the more underdeveloped areas like East Palo Alto. The problem is that you'd then have to convince employees to live there (for those of you out of the area, East Palo Alto doesn't have a great reputation due to gangs and the resulting shootings). On top of that, you'd still have a very disparate community between those living within the Google/Facebook buildings and those that do not. I'm sure some very interesting sociological experiments could come out of that though.

 

[lorih]

And to make things even more complicated, some "regular folks" that don't want to be landlords were forced to rent their condos and homes in the last few years because housing costs decreased, and when life situations forced them to move they were underwater and couldn't sell, so they are stuck renting their place out.

So a bunch of these "regular folks", (I have it in quotes to distinguish from professional real estate business people that purposely own multiple rental units, not saying real estate people aren't real folks) won't be happy if rents are artificially held low.

There would be some benefits of Google owned and operated housing, but then there is the whole "monopoly thing" and who gets to live there. Also, I used Google as an example because of my familiarity, and because of the particular altercation with the Google sponsored bus. Lets not forget that there are many other high tech firms here.

(wouldn't it be great if Tesla built a few apartment complexes with viable high speed charging so renters could full take advantage of the best technology out there)