There are no homeless people in Decorah. The streets are safe, the children of our community all get a good education from the public schools. For the most part, those that want to continue their education after high school are able to do that, making use of the Iowa tuition grant or perhaps even the tuition exchange program if one of their parents works for Luther. One can buy a house in Decorah for 100,000.00 maybe less, and certainly for more. Apartments are available in 450.00 range for a one bedroom unit.
The area south of San Francisco, known as Silicon Valley could not be more different. In San Jose a one bedroom apartment goes for 2200/month, almost times the cost in Decorah! There is an even larger gap if you want to buy a house. A small three bedroom rambler in Palo Alto or Mountain View can go for 1.2 million dollars or 10 times the cost of a similarly sized house in Decorah.
The minimum wage in Iowa is \$7.25/hour, the minimum wage in California is \$9.00/hr in San Jose the minimum wage is 10.30 per hour, better than Iowa and California in general but still… Here’s a math problem for you, how many minimum wage jobs does it take to cover the rent on a 1-bedroom apartment in San Jose? Definitely more than one! Housing in this area is a huge problem even for people in the tech industry making six figure incomes.
These are some of the issues we have been grappling with the past three weeks as we have visited companies and community organizers and social service organizations in the heart of high tech.
When you set foot on the campus of Facebook or Google its like you’ve entered a theme park. Brightly colored buildings, statues of popsicles, ice cream sandwiches, and cuddly green Androids at Google. Disney-esque restaurants where employees eat free breakfast, lunch, and dinner at most places we visited. Hair cuts, oil changes, laundry services, an on-site doctor for your sore throat are not uncommon at the most profitable tech companies. If you live in the city and commute to Mountain View climb aboard a pristine white bus, complete with WiFi to take you on your journey to work. Once again complementary. Clearly, a degree in computer science is a golden ticket in this world.
But what about the driver of that bus? What about the person cooking your free meals? Cleaning the “streets” and floors and bathrooms in your wonderland workspace? They must buy their own lunch, and drive themselves to work, and pay for their own hair cuts, or heaven forbid they get sick and need to go to the doctor. How do they pay for all of this, especially on $10/hr.
As we walk down Market street from our cozy four bedroom VRBO unit in the Castro neighborhood towards the Embarcadero we pass many homeless people, many are chronically homeless, which means they struggle with mental illness, addiction, and other health issues. They say weird things, they have all of their possessions in a cart or a bag. Some of them dig through the garbage to find cans and bottles we casually toss aside to redeem for some change and the chance for a meal.
It might be easy to think that big profitable tech companies are the root of all of these problems. Housing, public transportation, and other services simply cannot keep up with the appetite these places have for high tech employees. All of which drives up the cost of housing even more. We are told that every new high tech job in the six figures creates four ancillary positions for jobs like nannies, house keepers, and gardeners.
In truth many of the titans of Silicon Valley are doing a lot to help. Nearly every non-profit we met with gets funding from Google. Facebook agreed with a union to pay their bus drivers $28.00/hr. Most companies are in business to make life better for someone. Whether it is through providing emergency commmunication during times of crisis like Facebook, or encouraging people to live a more healthy lifestyle like Strava. No one company is going to do anything to solve the whole problem, but lots of them are trying to make the world a better place.
In terms of housing, we think Facebook is also responsible for a massive new apartment complex just a block away from their campus. Of course even this brings with it questions. The apartment complex is several blocks along on a street with few outlets, and very old, small houses across the street. The traffic that this new complex will add has nowhere to go. One can hope that if the complex is designed for Facebook employees they will all choose to walk to work.
With the limited space available in the valley you might think that building up would be an option. Unfortunately most cities limit the height of new construction which further hampers the ability of developers to add high density housing. On top of all of this when new developments are created then there are cries of gentrification from long time residents.
It appears to be a no win situation. Further success and growth by innovative companies brings in more people which exacerbates traffic, housing, and contributes to the higher cost of living. One wonders why this remains the mecca for high tech. Why not go elsewhere? The simple answer is because there is no where else like this. All of the pieces for a successful startup are just down the block. Money, legal, technical talent are all here. Ideas permeate the air in every bar, restaurant and street corner.
So, what is the solution? We asked most everyone we met with for their solution and unsurprisingly we got a different answer for everyone. I’ll summarize those in my next post…