Oakland struggles to be the anti-San Francisco
Oakland is a cool city that fell on tough times. It’s one of the most ethnically diverse cities in the country, with a long history of auto manufacturing, shipyards, wartime production and social activism. The Black Panthers came together in Oakland.
It’s also an arts magnet, and claims to have the highest concentration of artists per capita in the U.S. Oakland has produced musicians like Too Short, MC Hammer, Digital Underground (best known for the Humpty Dance) and even Tupac -- plus a whole lot of jazz and blues before that.
It's also the birthplace of the Mai Tai.
So it’s with some trepidation that Oakland prepares for the potential onslaught of the tech industry, which has already subsumed the rest of the Bay Area.
The biggest name coming to the East Bay is Uber, which recently bought a historic downtown building and announced plans to move as many at 3,000 workers to the city in 2017. Some 16 other tech companies have come over in the last few years, according to real estate firm CBRE. The city also has a start-up culture of its own, along with the hipsters, coffee bars, and restaurants to go with it. There is a noticeable feeling of youth, energy and optimism in the downtown corridors that had long been quiet and littered with trash.
Oakland's growing popularity is driven in part by cheaper rents, especially when compared to San Francisco and Silicon Valley. Uber, for instance, said a fifth of its workers already live in or around Oakland. But cost-of-living doesn't tell the whole story.
It's the quality of life, too. San Francisco has been transformed by gentrification and an influx of tech money. The city is less diverse and soaring rents have priced out families, artists and many longtime residents who gave the city its flavor. These days it feels like one giant hipster startup.
And Oakland, well, Oakland is still pretty cool.
“Oakland has become culturally important in a way that it wasn’t in the dotcom,” said Dan Harvey, vice chairman at CBRE, a commerical real-estate firm. “What we’re seeing is a tremendous move of the restauranteurs, of the artists, of the musicians, of the entertainment scene that was deeply embedded in San Francisco that has made a move east across the bay into Oakland.”
And young tech entrepreneurs in search of an urban lifestyle and a less homogenized vibe are making the move, too.
Jesse Pollack is a co-founder at Clef, an eight-person startup that makes security software. He said the company chose Oakland specifically, as the anti-San Francisco.
“We didn’t really like San Francisco, and wanted to find a new community that was more aligned with our values,” he said. And when I met Pollack and the rest of the Clef team, they were hosting their 112th community dinner in a co-working space in downtown Oakland.
They invite friends and strangers and try to be embedded with the community. And more than that: Clef released a handbook on how to achieve more diverse hiring, organizes meet-ups with the tech community and is helping create an advisory committee with the mayor’s office.
In fact, it’s not uncommon to hear Oakland tech citizens talk about how to have a social impact that doesn’t include wealth inequality and gentrification.
Darrell Jones the third is Clef’s head of business development. He says he feels a responsibility not to ruin Oakland.
“In most conversations that I’m involved in, it’s like, ‘hey, you work in tech, what’s going on man?,’” he said. “And I’m like, dog, we’re trying. We’re trying not to be terrible. We’re trying to be better for the city.”
Oakland’s new mayor, Libby Schaaf, hopes the city can achieve a more conscious growth and attract companies and residents who want to have a positive impact. She calls this ideal “tequity.”
“Tequity is this idea that we can have a different kind of tech community here in Oakland,” said the mayor.
She said the city doesn’t bend over backwards to attract tech. Uber received no incentives to come to town and there are no built-in tax breaks for tech companies.
“Five, 10 years, I would really like to see Oakland tell a unique story of how an economic boom could not just exacerbate inequities, but heal them,” Schaaf said.
But in many ways, Oakland is already feeling the effects of the larger tech economy. Yes, there are a lot of great new restaurants and coffee shops and development. But residential rents are now the fourth highest in the country, according to the apartment listing site Zumper. Rents went up 19 percent in 2015. Home prices are up 13 percent.
The average 1-bedroom apartment is about $2,200.
“There is a crisis here around housing,” said Cedric Brown, chief of community engagement at the Kapor Center for Social Impact. “If we don’t figure that part of it out then we’re going to continue to see the kind of displacement that goes along with the tech industry having a bad reputation for rewarding the wealthy, rewarding these boy geniuses.”
In fact, on the November day when I visited Clef and the Kapor Center, protesters at city hall were demanding a fee on new business development that would go toward building more affordable housing. Francine Williams, a longtime Oakland resident, spoke at the protest and told me she could afford to live in Oakland only because of such housing.
Mayor Schaaf acknowledges that the clock is ticking on her, let’s say, conscious growth strategy for Oakland. Displacement and gentrification are already happening in the city. Rents are rising fast and are now among the highest in the nation. And by some estimates Oakland is already becoming less diverse and suffering from greater income equality.
The mayor said there will be things like an impact fee (the city is trying to figure out how much it should be), and even without a formal fee, Oakland extracted $1.8 million from Uber to build new housing. But Schaaf said there’s no model, just yet, for the “tequity” she envisions.
“I have to be honest and say of course I’m nervous,” she said. “I’m very determined to be the first.”