When tech talent comes to town, does good value have to go out the window?
Well-paid tech workers in San Francisco are pricing locals out of the market – but could it happen here?
Bumper to bumper: Recent estimates published by LinkedIn show that nearly a third of new residents in the Bay Area region represented “technical talent” and they are pushing up rental prices there. Photograph: George Rose/Getty Images
Those who remember the utterly destitute state of Dublin’s docklands during the 20th century must get some solace from its revitalisation in recent years.
For many, that process of reinvigoration reflects the exponential growth of the IT sector here. Thanks to the presence of multinational giants such as Google, Facebook and LinkedIn, the south docks has been given the dubious moniker of “Silicon Docks”, in homage to what is conventionally regarded as the nucleus of international technological development in California’s Silicon Valley.
Despite the euphoric fervour with which job announcements and Governmental development strategies in an area of rapid economic growth are greeted, one need look no further than the various conflicts emanating from the birthplace of such corporations to gain a sense of the challenges that Dublin’s transformation into a true software city may face.
Regarded as the spiritual home of software innovation in recent decades, the swathe of land from San José in the south to San Francisco in the north of the Bay Area region known as Silicon Valley has been home to many IT-related companies such as Intel, Apple and Microsoft in the 1960s and 1970s, and more recently Google, Facebook, Dropbox and many, many more.
Recent estimates published by LinkedIn show that nearly a third of new residents in the Bay Area region represented “technical talent”. Given its popularity, residential development opportunities within that corridor of growth have become limited of late, prompting many well-paid tech and software workers to go to San Francisco in search of suitable accommodation.
A community activist with the Housing Rights Committee of San Francisco, Tommy Mecca works with long-time residents of some of the city’s most historic and identifiable neigbourhoods who have been bought out of their family homes by Silicon Valley newcomers with more money to spend.
“For a lot of the long-term tenants being evicted, they have to leave the city. They can’t rent, it’s impossible.
“If you’re a senior living off $985 a month, you can’t afford an apartment for $3,000 [€2,345, now the median rental rate in the area]. We’re losing a lot of people, and the people we’re losing are those who made the city what it is – the artists, the immigrants, the queer folk,” says Mr Mecca, who began protesting against the displacement of working class residents from San Francisco during the dotcom boom of the 1990s.
One feature in particular that has drawn the anger of community advocacy groups is the advent of what have become known as “Google buses”– private buses that transport “techies” between the city and the various corporate tech hubs of Silicon Valley.
A report released from the University of California’s city planning department in Berkeley directly linked the huge rise in rental prices there – thought to be about 30 per cent for one- and two-bedroom apartments last year as compared to 2011 – to the operation of such bus routes.
Although many of the routes aren’t operated by the search engine giant, Google and Apple seem to have borne the brunt of the PR damage caused by an ongoing municipal lawsuit that aims to halt the use of the shuttle bus system.
“These buses are symbols of everything wrong that’s happening in this city,” says Mecca.
“You talk about a tale of two cities; these buses represent the other city. They are the rich – these elite people who get to ride on buses that have food and free wifi, and using our bus stops while the rest of us have to pay $2 to ride standard buses, packed in like sardines.”
Mecca also believes that corporations should be forced to contribute “billions” to affordable housing options for the city’s inhabitants.
Of course, many Dubliners can relate to the reality of rapidly rising home rental and purchase prices. However, it is a problem felt more acutely by San Francisco residents given its unique geographical complexion.
The city is just seven miles (11.2km) by seven miles in area, and is enclosed by mountains to the south, the bay to the east, and the Pacific Ocean to the west – a situation that should have made city officials more aware of the need for responsible planning, according to UC Berkeley professor of city planning Elizabeth Deakin.
“We shot ourselves in the foot in terms of development of affordable housing by doing away with redevelopment law, as it’s turned out to be extremely problematic in California because it hasn’t been implemented effectively,” says Deakin.
“[Laws] previously stipulated that money garnered from commercial development would be set aside in order to provide affordable housing, but that’s now gone.
“Housing in the area is terrifically expensive. The last bastions of affordable housing are now being mined out for gentrification and redevelopment.
“There are areas in the city which were strong ethnic enclaves, and now seniors are retiring, their houses are worth a lot of money,” she continues.
As in parts of Dublin, there is a pervading fear among San Francisco residents that high-rise developments will begin to alter its characteristic skyline in the coming years.
It is a fate that could be avoided if planners encourage property owners to build second and third units, thereby increasing population density and limiting the need for tall, unsightly developments, according to Deakin.
“A lot of people here had concerns about high-density development, about losing views and parking spaces, or that we’ll lose some of the character of the city that makes it a very liveable place,” she says.
“We’re not built on a Manhattan scale and thinking of changing it that way scares people.
“Part of the problem is that planners haven’t done their jobs in showing people how they can live in increased density without a high-rise policy.”
Under current circumstances, it may seem farfetched that Dublin should have to contend with such diverse societal problems given the comparatively nascent nature of our booming tech and software industries.
Yet still, given the scarcity of residential and commercial property availability in Dublin at the moment, and the inflated pricing structure such scarcity has helped to propagate, it isn’t difficult to envisage a similar situation occurring in Ireland’s capital.
Especially when one takes into consideration the 20,000 to 23,000 extra jobs that are estimated to be generated by the Docklands Strategic Development Zone (SDZ) urban regeneration programme, which received planning approval earlier this year.
Although the 22-hectare plan includes provisions to house just 5,600 people, Ciarán Lynam, a senior partner with the O’Toole Partnership architects who has had extensive involvement in Docklands planning projects throughout his career, doesn’t believe the associated overspill need manifest itself in extreme cases of urban gentrification as has happened in San Francisco.
“It’s about creating community, creating appropriate housing for those who have lived in the area for many years and those who have come to the area through work, and those who enjoy living in the city. There’s huge opportunity but huge responsibility,” says Lynam.
He is in agreement with Berkeley’s Deakin that smarter options need to be assessed in order to increase density within the city, especially considering the eight-story height restriction broadly imposed in the SDZ, but cites the precedent set by Guinness, Dublin’s former big employer, in creating housing for its employees as a possible avenue of exploration when contending with the problem.
“Guinness was a hugely significant employer, but in that they also delivered an awful lot of social services. They created a dispensary, a concert hall, swimming pools. So within the employer there was community support for their employees, and I think that’s essentially what you need.
“There were workers’ houses built and made available. It doesn’t have to be down to the open market . . . Whether it happens out of companies like Google, or the banking sector or other such areas . . . there’s lot of opportunities and it’s not all about just big companies either, it’s large and small companies working in cooperation,” he says.
Nama last year indicated that it would dedicate a substantial portion of a €2 billion tranche of investment into the Docklands redevelopment, and Mr Lynam believes that the agency has a unique opportunity and responsibility to ensure its funding contributes to a vibrant, and diverse, city centre community.
“There’s been a situation in parts of Dublin where local people feel that their area has been gentrified, and it is part of the process but it doesn’t need to be let run rampant.
“Nama will control a huge amount of the development that is to be delivered, and with Dublin City Council I think there’s the opportunity for Nama to achieve great things to ensure that the local community is not displaced, to ensure there’s a rich and vibrant community, reinforcing what’s there at the moment.”