San Francisco’s housing is the most expensive in the country. Housing prices are climbing, and developers are erecting new luxury condos at breakneck speed, forcing lower-income households to steadily move east to less expensive cities. Rent is staggeringly high: A household must earn more than $130,000 annually in order to afford an apartment at median cost. To capitalize on this lucrative market, unscrupulous landlords and opportunistic developers have been evicting tenants; the eviction rate has increased by a third since 2010. In addition, in 2013 the city permanently lost 1,017 rent-controlled units, one of the only forms of affordable housing, through condo conversions and other factors.
The struggle over housing has morphed into what many are calling a class war. Local advocates, public-sector employees, retail workers and others with low to moderate incomes are increasingly frustrated with the city’s newest wave of young techies, who are perceived as arrogant and oblivious. (Tech workers are flocking to San Francisco in droves, thanks in part to new tax breaks and a mayor who meets weekly with tech companies to seduce them into staying in the city.) Unfortunately, the tech industry has done little to salvage its image, occasionally taking to social media to cruelly lambaste San Francisco’s homeless, women and cyclists in what many locals would describe as a decidedly intolerant, un–San Franciscan fashion.
As a result of dramatic anti-gentrification protests, one particular component of San Francisco’s class war has captured national and even international attention: the Google buses.
These huge, unmarked, Wi-Fi-equipped shuttles take more than 14,000 well-paid tech workers — the median Silicon Valley tech salary is more than $100,000 — from San Francisco to their jobs 30 to 50 miles south in Silicon Valley, reversing the typical bedroom-suburb pattern. In so doing, the buses provide some very important environmental benefits: They reduce thousands of tons of CO2 emissions annually and take many single-occupancy vehicles off the road. While companies such as Electronic Arts and Genentech also have shuttles, many San Franciscans refer to all the corporate transports as Google buses.
There are approximately 200 shuttle stops throughout San Francisco. Although the routes are not public, a San Francisco design firm dispatched a team of bike messengers to track and map the shuttles. They found that shuttle routes are concentrated on Van Ness Avenue (a major north-south throughway) and in the Mission neighborhood — a traditionally Latino section of the city that has become ground zero for the rise of young, white affluence and the site of several anti-shuttle protests.
Many have argued that these buses are a symbol of economic stratification, a stand-in for generalized anxiety about another wave of gentrification. Indeed, the buses provide a potent, visual representation of the shifting relationship between Silicon Valley and San Francisco. In 2013 one group of protesters took baseball bats to a piñata shaped like a corporate shuttle, and another group incorporated a faux Google bus into the annual gay-pride parade and distributed pamphlets about the steep increases in eviction rates.
However, the buses are much more than just a symbol. The corporate shuttles actively contribute to the city’s higher housing prices and its resulting gentrification.
Soaring housing costs
As a master’s student in city and regional planning at the University of California at Berkeley, I studied the impact of the Google shuttles on rents from 2010 to 2012. I looked at five shuttle stops in neighborhoods with a high concentration of renters and compared the rate of change in rents from units located within a walkable distance (half a mile) of the stops with units just outside those areas (half a mile to a mile away).
I found that rents within the walkable zones rose up to 20 percent more rapidly than rents outside the walkable zones.
My research (PDF) is consistent with other studies (PDF) of the impact of transit investment on housing prices. Transit-oriented development — policies that concentrate housing and commercial space around transit nodes — has been shown to increase rents in a halfâmile radius of the transit nodes in cities such as St. Louis; Portland, Ore.; Sacramento, Calif.; Chicago and San Francisco. In most cases, however, the transit investments were to public infrastructure (i.e., public transportation). Thus, even if the investments contribute to increasing rents, they are also providing some public good. By contrast, in the case of the Google buses, private infrastructure investments that only benefit a select few are causing rents to rise without increasing transportation opportunities for the general public.
Housing market economics supports the conclusions of my research. Economic theories demonstrate that as individuals’ transportation burdens decrease (for example, commutes paid for by their employers), their ability to pay for housing increases. Thus, if individuals are provided with free or reduced-cost transportation, they can demand a higher bundle of housing services and may force prices upward.
Craigslist ads provide additional qualitative evidence that the shuttles are affecting the rental market. Craigslist is a very popular website for listing apartment rentals, and its listings provide a snapshot of what amenities landlords think will draw potential tenants to their units or allow them to charge higher rents. From November 2012 to April 2013, I picked three random, separate days to review Craigslist ads for apartments in San Francisco. On each of these days, I found many listings that advertised proximity to Google bus stops as a perk. The same is true today.
Charging Google $1?
My research indicates that the tech shuttles are contributing to soaring housing costs in San Francisco. And in some ways, the name calling between techies and the rest of San Francisco is a distraction from the real issue: Many of San Francisco’s policy makers are more invested in pandering to the tech industry than in protecting low-income San Franciscans.
Just recently, the city missed an opportunity to interject concerns about equity into conversations about the tech shuttles.
Until January 2014, the tech shuttles ran mostly unregulated through the streets of San Francisco, using curb space designated for San Francisco’s public Muni buses. While a private car idling at a Muni bus stop could face a $271 fine, the tech buses were able to use the stops with impunity. However, according to a new program (PDF) developed by tech companies in collaboration with the San Francisco Metropolitan Transit Authority (SFMTA) and approved on Jan. 13, the tech shuttles will now have to pay $1 each time they use this public infrastructure.
State law limits the transit authority to charging the tech shuttles only for cost recovery of the shuttles’ impact, and the SFTMA argues that $1 per shuttle per stop is equal to the impact cost. However, it is clear that the tech shuttles have ramifications beyond their use of the bus stops; they are costing the city its low- and middle-income residents.
San Francisco should increase the fee to incorporate the cost to the city of providing additional affordable housing, rather than ignore the role that the shuttles are playing in the city’s outrageous housing costs. Many cities — not just San Francisco but also New Haven, Conn.; Denver; and Pittsburgh — provide ample precedent for asking private companies to pay for their impacts on the urban environment. Without more funds for affordable housing, the class war will continue to rage as San Francisco threatens to become an exclusive playground for the very wealthy.
