Uber and gentrification: Why I’m excited and terrified that tech has finally discovered Oakland

Following the news that Uber is going to open a major office in downtown Oakland, some residents shocked the tech elite by failing to pay proper deference to their new digital saviors.

Rather than genuflecting before the high-tech pilgrims planning to settle the Bay Area’s final economic development frontier, some locals actually had the nerve to question whether the coming wave of new immigrants was good or bad for the future of their often-overlooked city.

Tech, so gleefully unaware of its massive messiah complex, expressed bewilderment that anyone would dare question the unquestionable benefits of new tech development, or imply that the industry could have anything less than the best of intentions.

Entrepreneur David Sacks perhaps best summed up this bafflement on Twitter, when he mocked these ungrateful locals for clearly not knowing what was good for them:

"Our cities are run down!" "Our cities are gentrifying!" ? (with apologies to @pmarca) http://t.co/182Wqk4HV9

— David Sacks (@DavidSacks) September 24, 2015

First the local yocals complain about living in rundown wastelands! Then, when tech comes along to rescue them from their misery, they still complain!

Poor tech industry. Just can’t seem to please anyone these days.

Despite the intended irony, Sack’s tweet actually captures my own ambivalence about the Uber announcement. As an Oakland homeowner, I’m excited and terrified all at once.

One the one hand, I am thrilled that tech seems to have finally discovered the city my wife and I moved to back in 2000.

Oakland has repeatedly been left out of the successive tech booms that have spread up from Silicon Valley to overtake the Bay Area. Yes, Oakland is home to Pandora, and Pixar is nearby in Emeryville. And yet, tech has generally avoided my adopted hometown as if it was overrun by the plague.

In recent years, I became boosterish, repeatedly telling any entrepreneur looking for space that they should check out downtown Oakland.

Prices are cheaper. There’s lots of space near public transportation. There’s a growing downtown nightlife and arts scene. And even the New York Times had declared Oakland has bagels every bit as good Brooklyn.

And yet, not much changed.

While writing in 2012 for the San Jose Mercury News about whether the geographic borders of Silicon Valley should be expanded to include San Francisco and Oakland, I spoke to AnnaLee Saxenian, dean of the UC Berkeley School of Information.

Saxenian, who has written ground-breaking books about tech clusters and culture, is a longtime observer and researcher of the evolution of Silicon Valley, and is, herself, an Oakland resident. Her words proved prescient.

“Oakland has been puzzlingly slow to take advantage of the tech boom,” Saxenian said in 2012. “But the trends are pulling activity north, and it seems inevitable that it will happen there, too.”

And so it has. Granted, this may have as much to do with the fact that San Francisco is overstuffed with startups, to the point of exploding. But Uber’s Oakland announcement came with no small sense of justification and pride on my part.

Finally! Finally, someone is giving our city its due respect and sees the same potential I saw.

And yet…now that Oakland has been “discovered,” it’s entirely reasonable to take a moment to consider exactly who will win and who will lose from the coming East Bay tech boom. Just because every city from Cupertino to San Francisco is more than eager to roll over and let tech scratch its belly, doesn’t mean that Oakland has to do the same.

It’s tempting, of course. Because Oakland still has plenty of problems. High crime rate. Troubled schools. And local political leadership so comically inept that I’m often amazed they are competent enough to get out of bed each morning and dress themselves, let alone run a major U.S. city.

Conventional wisdom says there is a magic wand that can be waved to make all social and economic ills disappear: Attract more companies and jobs. No matter the cost. Economic development across the U.S. has devolved into this single, simple-minded notion.

While this strategy can boost tax coffers, it also favors new residents over current ones. The people in Oakland who most need jobs are, by and large, not likely candidates for jobs at Uber, or any other tech company that follows. And, as such, the pressure for them to leave will mount.

In fact, this exodus has already been underway for a decade.

Over the past 10 years, Oakland has mainly gotten the spillover of people moving in to commute to tech jobs elsewhere in the Bay Area. With that shift, the African American population in Oakland dropped 25 percent between 2000 and 2010. Though, at 27.3 percent, they were still the largest ethnic group in the city back in 2010, according to the San Francisco Chronicle, with whites at 25.9 percent and Hispanics at 25.4 percent.

In more recent years, with the region’s tech boom accelerating, housing prices in Oakland began climbing. Apple’s and Google’s commuter buses started to rumble through our North Oakland neighborhood, and Facebook van pools began crawling the streets. People started posting flyers in our neighborhood seeking out rentals.

With tech actually setting up shop in Oakland, and filling a still largely vacant downtown, we can expect the impact of these changes to hit the city even harder. And we only have to look around the Bay Area to see what that future looks like.

Traffic-jammed streets. Overburdened infrastructure. Growing evictions. Even higher housing costs.

Hooray?

The Wall Street Journal just published an analysis on the effect of Apple employees on local housing costs. And, guess what? Housing prices in neighborhoods where Apple employees live are rising much faster than in the rest of the already-insane Bay Area housing market.

As the WSJ, that bastion of left-wing, radical Communist thinking, notes:

The findings offer a cautionary tale for cities around the U.S. looking to attract more tech jobs, which might also come with the challenge of rising home prices. While high-salaried tech workers might be able to afford homes, people in other industries might have a tough time competing.

“There’s a concern that you’re displacing the current population,” said Svenja Gudell, chief economist at Zillow.

Well, duh.

Of course, there are alternatives. There could be more focus on job training, easier access to business capital to support small local businesses, and more investment in repairing the city’s failing infrastructure, particularly in the worst neighborhoods.

As is done in Europe, there could be more direct efforts by the government to encourage venture capital funding for local startups. And there could be more funding of non-profits like Hack the Hood to enable more homegrown programmers and developers. Or even support for program’s like Facebook’s TechPrep to provide online learning to African-Americans and Hispanics who are woefully underrepresented in this industry.

In other words, there could be economic development policies that focus on raising the standard of living and the career prospects for people already in the city.

But it’s far more likely that the emphasis will remain on landing big tech fish, and the swarms of new, young workers that will come rushing in behind them. It’s quite likely that in a few years, to the rest of the world, Oakland will be appear a rejuvenated, shiny, and hipper-than-hip miracle.

And for the long-time (and long-suffering) residents? They will hopefully derive some consolation knowing that their city has indeed been saved and made prosperous and new again.

Just not for them.