'San Francisco is full': Tech backlash reaches new heights with skyscraper battle

David Ingram

SAN FRANCISCO — John Elberling has a drastic plan to address the city’s housing crisis: no more new skyscrapers.

Or at least a trade off. The city of San Francisco allows for a yearly allotment of new office space based on how much affordable housing gets built. No new housing? That allotment goes down.

“There clearly has to be a balance, where you don’t grow faster than you can handle it,” he said.

It’s the newest effort by San Franciscans to draw a line in the concrete over the growth that has made it a global hub of technological innovation but also the archetype of what a sudden influx of well-paid tech workers can do to a city.

And Elberling, a local advocate who is the head of a nonprofit housing organization, has support for his plan. His measure, Proposition E, passed in Tuesday’s local election.

The result could be a jarring wakeup call to the tech industry that its future inside the city limits of San Francisco — where it’s not always welcome, anyway — may be more limited than it realizes.

Longtime residents are celebrating. Business lobbyists are predicting a local recession. And venture capitalists are taking to social media to vent their frustration.

“Genius city, facing down a possible pandemic-driven recession, passes special interest initiative that city economist says will reduce the GDP by $23 billion,” Kim-Mai Cutler, a venture capitalist and a former tech journalist, said on Twitter on Wednesday. (The figure is from a report by the city’s chief economist.)

San Francisco, a city that’s hemmed in by water on three sides, has been the scene of a multidecade battle over who gets every available square inch. In 1986, Elberling successfully pushed a proposal to limit major new development in the city to the equivalent of one skyscraper a year, then heralded as a significant success in pushing back against the encroachment of corporations on the city.

“That era is just gone, and that’s quite remarkable, but it’s been replaced by this new 21st century tech economy,” he said. “Like everybody else, I’m kind of amazed.”

The tension between San Francisco natives and the tech industry is all too familiar. There have been protests over corporate bus fleets, rapidly gentrifying neighborhoods, sidewalk e-scooter confrontations, fights over condo buildings and upzoning, city attempts to regulate office cafeterias and the occasional dispute over a soccer field.

And while there has been broad agreement on the problems that tech companies have created in the city, a solution has been elusive.

Now the question is whether a ban on future towers is just another battle in a long war filled with the same themes and repetitive arguments, or a watershed moment for tech in a city that relishes taking big corporations down a notch.

Skyscrapers are a particularly visible target. The Salesforce Tower, which became the city’s tallest building when it opened in 2018, stands as a monument to tech’s new dominance in an increasingly one-industry town, but it’s a building residents love to hate. One local editorial writer called it “show-off ugly.”

“San Francisco is FULL GO HOME!!” reads one bumper sticker in town.

There are signs that tech companies are taking the sticker’s hint, inching away from San Francisco for surrounding areas and even other parts of the country. Twitter CEO Jack Dorsey told investment analysts last month that he planned to distribute more of the company’s workforce elsewhere, saying, “We have to build a company that’s not entirely dependent on San Francisco.”

Last year, homegrown software company Stripe decamped to a neighboring city, citing the lack of office space here. And the tech industry doesn’t need San Francisco to thrive in the sprawling Bay Area. Many of the biggest offices, including the headquarters of Apple, Facebook and Google, are located in smaller cities and towns to the south.

More challenging will be building a San Francisco that’s not as dependent on tech companies. Its local government was already planning for school layoffs, and it has come to rely on the fees and property taxes from new construction.

Critics of Elberling’s plan and others like it that try to limit or benchmark development warn that the city can’t exactly block new, wealthier residents from moving in, even if a majority wanted to.

One of the city’s famed “painted lady” Victorian-style homes, the subject of countless photos, was recently sold for $3.55 million to a software engineer — and she plans to spend another $3 million to renovate it.

“We will still have all the impacts of gentrification,” Jay Cheng, the public policy director for the San Francisco Chamber of Commerce, said. “We will still have all the impacts of the housing shortage. But we will have none of the business tax revenue to help solve those problems.”

The ballot measure isn’t an explicit ban. Projects already in development can move forward. And if the city meets its affordable housing goals, more big office buildings could get approved in the future. But San Francisco is not close to meeting its goals for more housing, and no one, including Elberling,can be sure that will soon.

And like every plan put forward to address the city’s challenges, there’s concern that its best intention will only end up as another advantage for tech companies.

“By severely restricting office space, only the largest corporations like Facebook, Google and Uber can afford to operate in the city,” opponents of the measure including Catherine Stefani, a member of the San Francisco board of supervisors, argued in the city’s official voter guide.

Elberling, who moved to San Francisco in 1967 and whose advocacy has got him tagged as the “worst enemy” of developers, said he doesn’t have a simple answer for how to pay for more affordable housing. San Francisco isn’t allowed to tax personal income, and there are statewide limits to how high property taxes can go.

The city’s YIMBY movement, which pushes for a “yes in my backyard” attitude toward development, argues the real problem is that affordable housing is already banned in much of San Francisco and its suburbs because they prohibit nearly any new building taller than a few stories. Denser zoning would mean shorter commutes, less pollution and more stable rent, they say.

But the apparent popularity of Tuesday’s ballot measure speaks to a different faction in the city that is tired of the change and the disparities in wealth. For Elberling, that means slowing things down, at least until the tech industry agrees to pay more.

“This is one of the richest metropolitan areas in the world,” Elberling said. “The funds are potentially there.”