San Francisco's homeless measure passed, but don't forget how Big Tech resisted


This is a monumental week for San Francisco. Proposition C, a measure aiming to tackle the city’s chronic homelessness, was passed by citizens with a 60 percent majority late on Tuesday night. The bill proposes a 0.5 percent tax on local companies with revenue of more than $50 million, hitting many of Silicon Valley's heavyweights, including companies with a sizeable downtown presence like Stripe, Dropbox, Lyft, Salesforce and Twitter.

California is the state with the highest number of homeless people in the US, and in San Francisco, it's an ever looming issue. At present, around 7,500 people are forced to make the streets their home, and this figure hasn't shifted much over the past several years. I recently attended a conference in the city, and like most visitors, was struck by the viscerally shocking reality.

The problem is so pronounced that an unofficial ‘homeless quarter’ has materialised within the Tenderloin district, an area that rubs up against the skyscraper populated downtown and financial districts. Here, people without homes stand in clumps, sit or lie on the street, sometimes with bin bags stuffed with belongings strung over their shoulders, sometimes with small children in tow.

Inhabitants of the city say that the problem has been creeping, the invisible demarcations of this quarter inching ever further out, as yet more swathes of the city are engulfed by human suffering. And of course, there are the tent cities, the filthy conditions of which were recently denounced by a UN investigator as constituting a humanitarian crisis.

Homelessness is a problem in many cities in the US, but the characteristics of San Francisco's homeless population are a little different from others. The city has a much higher proportion of unsheltered homeless people, and the highest rates of 'chronically' homeless people who live for years, or even decades, on the streets. These two statistics are causally linked to two more: rates of psychiatric disorder are higher in homeless San Franciscans than other cities, and so are rates of addiction.

Homelessness is not just a social issue that afflicts the city, it’s also a public health issue. Among homeless populations, diseases commonly experienced include tooth infections, trench foot, and body lice at one end of the scale, and tuberculosis and hepatitis A at the other. Meanwhile, a lack of public bathrooms means that the streets of San Francisco are often smeared with faeces. At present, the city is called 65 times a day by people reporting the issue, and there have been more than 14,597 calls in 2018 alone.

Yet despite all of this, many of the city's resident tech giants came out in opposition of Prop C, with the aforementioned Stripe, the self-proclaimed ‘woke’ ridesharing company Lyft and Twitter all generously funding an opposition campaign. Twitter CEO, Jack Dorsey, even voiced his outrage on social media at the idea of paying, despite his company being a long term beneficiary of ample tax breaks gifted by the city.

Prop C proposes funnelling the money raised by an additional tax, which is predicted to amount to between $250 to $300 million per year, into initiatives to aid the homeless population. Some of these measures include building 4000 homes, expanding the capacity of shelters by 1000 beds and providing intensive mental health and addiction services to those in need.

So why would companies oppose the bill and risk bad publicity in a city where homelessness and its human toll are so starkly visible?

“Much like Trump uses immigrants and Muslims, so our downtown interests tend to do a lot of hateful campaigns against homeless people,” says Jennifer Friedenbach, CEO of the Coalition for Homelessness, one of the main bodies behind Prop C. She says that the city's politicians are known derisively as ‘San Francisco Democrats’, to imply that in reality, they’re more closely aligned with Republicans.

Friedenbach highlights the legacy of Gavin Newsom, Mayor of San Francisco between 2004 and 2011. Under him, the 'Care not Cash' programme was introduced, which cut the welfare cheques given to homeless people by 85 percent on the pretext that they were using the money to buy drugs and alcohol, which also indirectly led to homeless people being charged for stays in shelters.

Other anti-homeless measures introduced over the years include a sentence of six months in prison for asking for money twice and the ‘Sit Lie’ bill which criminalises sitting or lying on the sidewalk during daytime hours. Along with this, a tent ban was introduced, with the flimsy concession that the city must offer homeless people 'one night’s shelter' in return.

Friedenbach has seen this legislation introduced against a shifting backdrop of public perception. “What I've seen over time is that, when I was first doing this work, there was much more of a systemic analysis,” she says.

But with the ongoing politicisation of the problem, she thinks the general public are now more likely to believe that a homeless person must have done something wrong to end up on the streets. “A lot of the interests in San Francisco have fed into those feelings and really elevated a lot of stereotypes and prejudices against an entire class of people,” says Friedenbach.

Perceptions such as these stoke the general reluctance of neighbourhoods to play host to accommodation or shelters for homeless people. Instead, a strain of NIMBYism (Not In My Backyard) can come into play. “Unfortunately, the ‘everybody’ who wants supportive housing is often quieter than a smaller subset of neighbours who say: ‘We agree it belongs somewhere. It just doesn’t belong here.’ Preferably in a fifth dimension. And invisible,” Carol Wilkins, a longtime consultant on homelessness told Wired.

This is why initiatives such as ‘Homeward Bound’, which sees homeless people promised a one way ticket out of the city, can be more palatable to the city’s inhabitants than, say, building apartment blocks. “That, I figured, was the easiest sell,” John Miller, executive director of SHAL (The Southernmost Homeless Assistance League), told the Guardian. “Give us money and we’ll ship our homeless problem to somebody else.”

The Guardian carried out an extensive analysis of the homeless people who were relocated as part of San Francisco's programme and found that 10,500 homeless people were moved out of the city over the last 12 years. While not necessarily ending in more hardship - recipients of tickets have to prove they have a contact to stay with in their destination city - only three people were followed up during the period between 2010 to 2015.

It seems particularly insidious that the blame for homelessness is increasingly pinned on the individual at the same time as the root cause is becoming ever more systemic.

In San Francisco, rents have soared, with the average one bedroom apartment now costing $3,300. Despite there being relatively good protections for renters in place compared to other American cities, eviction rates have surged, with landlords desperate to cash in. Cheap housing that once existed, such as single room occupancy (SRO) accommodation has been torn down to make way for hotels or apartment blocks catering to the moneyed tech elite.

“Here, it's kind of like the yuppies of the 80s on steroids,” says Richard Walker, author of Pictures of a Gone City: Tech and the Dark Side of Prosperity in the San Francisco Bay Area. “It's a very lively scene, but in a lot of downtown and even beyond it's fairly homogeneous with these young people. And that has replaced a lot of the older workers, artists, and people working for nonprofits, political activists.”

But there are other ways the Silicon Valley stalwarts are tipping the equilibrium off balance. Traditional companies perpetuate what is known as the bell curve income distribution: there are some highly paid people at the top of the company, some poorly paid at the bottom, but most are focused in the middle, constituting the American middle class.

Yet today, tech companies are breaking the mould. At Amazon, the median salary is around $23,000 - the wage paid to warehouse workers. While at Facebook, the only low paid jobs are the likes of cafeteria workers and van drivers, while all the white collar workers command salaries in excess of $100,000.

Read next: What happens when robots take all of the jobs

“Instead of having a bell curve, you get what's called a dumbbell economy,” says Greg LeRoy, Director of Good Jobs First, a nonprofit watchdog group on economic development incentives. “That is, you've got a lot of very highly paid people at the top - these very highly skilled software engineers, code writers, inventors. And then a lot of very low paid people at the bottom.”

San Francisco's insanely high rents are pricing out virtually anyone that doesn’t earn in the $100,000 bracket, meaning that service workers can no longer afford to live there. “You've got people who literally drive to Silicon Valley Monday morning to work all week and live in their vans and RVs in parking lots, and then go home on the weekends because they can't afford to live a reasonable distance from their jobs,” says LeRoy. But at these prices it's also teachers, lawyers and middle management whose salaries fall short.

In the precipitous real estate market, suffering a health problem or losing your job can be enough to slip through the cracks. “We basically have no social safety net in the United States,” says Friedenbach. “If you're an impoverished person and something happens, then you fall out.”

Around half of the San Francisco homeless population became homeless before the age of twenty-five. Another common theme is the suffering of abuse or neglect in childhood. “That has an impact in terms of trying to recover from those traumas and then being re-traumatised over and over again out on the streets,” says Friedenbach.

San Francisco has always experienced its issues, but these have only been exacerbated since the Silicon Valley boom began in the 90s. The problem is twofold: an influx of wealthy tech employees drive the prices of living and accommodation up, while at the same time the companies themselves receive major tax breaks and lobby hard to pay even less, meaning that public services and infrastructure are starved of desperately needed income.

This pattern is playing out not only in San Francisco, but in other locations that tech giants have deigned to call home. In Seattle, the base of Amazon's vast headquarters, an eerily familiar tale is underway. Since the e-commerce goliath set up shop, the city’s population has increased by around 40 percent, with nearly 20,000 people moving there annually.

By some measures, this would be welcome, but the flood of highly paid tech workers is straining the city, with house prices rising 70 percent in just five years. As a result, the Seattle area is now home to the highest homeless population in the country following New York and Los Angeles. More than 11,000 people are now without accommodation and forced to sleep rough.

In the wake of this crisis, and in an effort to capture some revenue to fund affordable housing, the city voted in favour of a tax that would levy an annual $275 per employee on large businesses (Amazon of course, included). However, much to residents' outrage, the company effectively blackmailed the city, stalling further development until the tax was eventually canned.

But why are states so quick to acquiesce to businesses who - by any metric - have the least need for handouts? A running score card from Good Jobs First, keeps a tally of all of the tax breaks Amazon has cashed in on. So far, the trillion dollar company has benefited from over $1.6 billion in tax payers’ cash.

Read next: The biggest tax breaks tech giants have cashed in on

Director of Good Jobs First, Greg LeRoy blames America's stagnating entrepreneurial sphere which has led to a homogenisation of the business landscape. “That means that those companies that can announce big deals - and that's often tech companies these days - they have inordinate power,” he says.

This means, according to LeRoy, that states are most definitely overspending. “We've documented twenty-two deals, for example, that are worth more than two million dollars per job,” he says. “The cost-benefit math never works on a deal like that, right?” They've documented 400 ‘mega deals’, which involve state giveaways of hundred of millions or even billions of dollars in tax breaks.

These are particularly gratuitous when presented under the rubric of ‘incentivising’ the building of structures like data centres. As Greg points out, everyone knows by now that cloud computing is the future. “You're not causing something to happen that wouldn't have happened otherwise, and therefore it's not really an incentive,” he says, “it's a giveaway.”

States' willingness to debase their revenue stream for the privilege of hosting tech conglomerates has real consequences.

If California was a country, it would have the fifth highest GDP in the world. People often question how a wealthy city like San Francisco can be home to such extreme destitution. But while some scenes may be reminiscent of impoverished nations, the problem here is not lack of prosperity. In fact, prosperity is part of the problem.

Read next: What tech IPOs tell us about the changing nature of capitalism

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