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Silicon Valley is both a metaphor for the entire tech industry and a real place that is (on a rare good day) an hour south of San Francisco. It’s the longtime home to some of the world’s most important and valuable companies, but it seems pretty clear in 2014 that unless massive public transportation systems are created in the next decade, the epicenter of tech needs to move north.
And when that move inevitably happens, driven in part by the growing problems that private transportation systems are causing among San Francisco residents and (believe it or not) employees themselves, Oakland will have a huge opportunity to stand out as the next home for tech. Already more and more companies are choosing to settle in San Francisco as opposed to Silicon Valley, but there’s a price to be paid for setting up shop in an expensive city like San Francisco that can be mitigated across the Bay.
My wife and I — both technology media professionals with South of Market workplaces — left San Francisco four years ago for Oakland. We’ve never really looked back, especially as San Francisco has grown increasingly polarized over the role of the tech community in the stark inequality that permeates that city.
Oakland isn’t exactly a paradise. But it’s a centrally located vibrant city served by several forms of public transportation with rich culture, great restaurants, and a lot of vacant commercial real estate. And the weather’s better.
The main commercial district of Oakland — which for the sake of this discussion we’ll consider the area roughly bordered by Jack London Square, Lake Merritt, I-980, and Grand Avenue — is already home to a few tech companies, including Pandora and whatever is left of Ask.com. But there are an awful lot of spaces that could accommodate a rapidly growing tech company, and a few places — like the old Sears store at Broadway and 20th right above BART — that used creatively could house much larger enterprises.
There goes the neighborhood
So as the cost of living and doing business in San Francisco continues to skyrocket and tech workers living there spend three hours a day on private buses commuting along traffic-choked Highway 101, why haven’t more companies considered Oakland?
For one thing, it isn’t necessarily rolling out the welcome mat to notoriously homogeneous tech workers: the only violent act that has taken place during a tech-busing protest over the last few months took place in West Oakland when a window on a Google Bus was broken by protestors. A historically African-American city, Oakland’s gentrification is well underway (raises hand sheepishly) as long-time residents sell — taking advantage of a booming real estate market that’s still more affordable than San Francisco — or are displaced by Ellis Act evictions from landlords also hoping to jump on that rocket ship.
But unlike San Francisco, Oakland is in desperate need of a stronger commercial tax base. As one of the most beautiful cities in the world, San Francisco will always be able to soak tourists for supplemental income should its commercial base shift. Oakland doesn’t have anything close to the private enterprise hubs of technology, media, and finance that San Francisco enjoys, and despite what you read in the New York Times, tourism is not exactly an issue.
The city has attempted to court tech startups but it’s pretty clear that group still prefers to set up shop in San Francisco. Perhaps Oakland should think more grandly: major tech companies that are thinking about the future of the Bay Area should consider making Oakland their home. Google and Apple probably aren’t going anywhere, but younger public companies near Silicon Valley with shallow roots like LinkedIn or soon-to-be-giant companies like Box or Evernote could be prime candidates for setting a new trend in how the tech industry is distributed across the Bay Area.
Why there’s a there there
Oakland is centrally located at the junction of several major interstate highways. BART and AC Transit aren’t perfect, but almost every San Francisco resident has a story about how that city’s famously inefficient Muni system has let them down. Oakland-based tech companies would still allow business-development types to live near Frat Mason and impossibly cool designers to stay in the Mission, taking advantage of public transportation to get to work in less than an hour.
The problem is that Oakland leaders need to find a way to make this happen while resisting the temptation to award the kinds of tax breaks that San Francisco Mayor Ed Lee was all too willing to give companies like Twitter to set up shop in a long-distressed area of the city. Instead, they need to sell the benefits of Oakland — public transportation, cheaper office space, and plenty of excellent entertainment options — so that (with more competent local governing, anyway) this city can really tackle its social woes.
Oakland’s social problems — crime, inequality, and lack of opportunities for its young people — are never going to truly change if its northern and western neighborhoods evolve into bedroom communities for lucrative companies located in other cities. That will just drive poor people further and further into troubled East Oakland or out of the city entirely, as property taxes alone won’t generate enough resources to invest in affordable housing and job training. There are a lot of Oakland residents that would likely be horrified by the notion that the corporations employing the tech workers they’ve grown to resent could be operating in their own city. But the movement of tech workers into Oakland is irreversible at this point, and if their employers were also located in the city, all residents could stand to benefit from the increased tax revenue.
The young workers of the tech industry aren’t going to live in Silicon Valley; they want to live in the urban areas of San Francisco and increasingly in Oakland. Moving closer to them — as opposed to refining a two-tiered transportation system that creates even more division — should be the new priority for how to manage this region’s growth.