The tech-driven city struggles with how to pay for the dark side of the tech boom – a boon for some, a bust for others

In the 50s and 60s, San Francisco was known as the home of beat poets and hippies. Now, San Francisco is defined by hi-tech firms and the people who work there. Freaks have been replaced by geeks.

But this transition has been messier than most. The tech boom has generated thousands of high-paying jobs and vast amounts of wealth. It’s also contributed to a spike in housing costs, a steady rise in evictions, a seismic shift in the identity of neighborhoods and an ever-widening gap between the city’s richest citizens and its poorest.

Now some San Franciscans want the tech industry to pay what they call its “fair share” to mitigate some of the damage they believe it has done.

Last month, supervisor Eric Mar proposed a 1.5% payroll tax on technology companies that bring in more than $1m a year. The move, he says, will raise more than $120m, which would be used to provide low-cost housing for some of the city’s more than 6,600 homeless citizens. It would also lower some fees for small businesses.

This is in direct counterpoint to the 1.5% cuts the city offered companies such as Twitter, Uber and Spotify in 2011 to move into a blighted neighborhood a short walk from city hall – known colloquially as the ‘Twitter tax break’. According to a report by the San Francisco controller’s office, that break netted these companies $34m in 2014.

“Tech companies are getting huge tax breaks and making tremendous profits,” says Mar, who worked with a variety of housing rights advocacy groups to craft the proposal. “We think measures like this are an important way to have large tech companies pay their fair share for the impacts they’re causing in our city.”

But Mar’s proposal has been met with fierce opposition from the mayor’s office, business groups and other local politicians.

“Our technology industry has been a big part of job growth here in San Francisco,” says supervisor Mark Farrell, who represents a district where some of the city’s wealthiest tech barons reside. “Targeting our technology sector and making them out to be villains, simply because they’re trying to create jobs and [build] our local economy, is just a backwards approach.”

It’s a battle that’s been brewing for a long time, and Mar’s tax proposal may help bring it to a head. How do average San Franciscans feel about it? We took to the streets with a video crew and asked some of them.

‘The techs don’t mean no harm’

San Francisco’s Mission district, once one of the most affordable neighborhoods in the city, has seen rents skyrocket as low-income families are displaced by tech workers.

At the Muddy Waters Coffee House on Valencia Street, John Castillo bemoans the changes to the neighborhood he has known almost his entire life. “The Mission I can remember was vibrant, it was alive and full of culture,” he says. “Today things have changed. There are people I know at 29th and Mission who are being moved out. The city just tells them ‘move to the Tenderloin’.”

Facebook Twitter Pinterest Pedestrians walk in the Tenderloin district of San Francisco, known for having many homeless people. Photograph: Bloomberg/Bloomberg via Getty Images

Castillo, a retired press operator for the San Francisco Chronicle, says he was homeless once for five months, but city programs helped him get back on his feet. “The techs don’t mean no harm. They’re just here to make a living. But where does it stop? I am all for the plan. Something’s got to work.”

On the street outside the Blue Bottle Cafe next to Twitter’s headquarters, even tech employees were largely in favor of paying more to help the homeless. “I don’t see this kind of tax as a disincentive,” says Lexi Ross, a San Francisco native who works as a software engineer for an app startup. “We want to attract the tech companies who care about the communities they operate in.”

Cupertino's mayor urges Apple to pay more tax: 'Where's the fairness?' Read more

Others are sympathetic to the goals of the proposal but question how it will impact tech companies over time. Kevin Shu, an engineering intern with Uber, says 1.5% is not a large amount but thinks it could hurt tech companies in the long run. “I don’t think you should blame tech companies directly [for homelessness],” he says. “They’re just here for the resources, talent and VC money.”

Derek Miracle, who works as a technician for a major telecom company in San Francisco but lives across the water in the East Bay, thinks the goals of the proposal are admirable but adds that the city needs to do more than just throw additional money at the problem. “The devil is in the details,” he says. “It depends on how the money will be spent. We need a cultural change to deal with the homeless problem.”

Tech companies have been unwilling to speak about the proposal in detail. “Twitter is proud to be one of the first tech companies to have moved into the Central Market area,” the company said in a statement. “Anyone who was in San Francisco in 2012 can tell you how much the city has transformed. We’ll continue investing in San Francisco, where we’ve created thousands of jobs and supported dozens of neighborhood organizations and businesses in the local community.”

Facebook Twitter Pinterest The tax would be a direct counterpoint to the 1.5% cut San Francisco offered companies such as Twitter to move into a blighted neighborhood a short walk from city hall. Photograph: Bloomberg/Bloomberg via Getty Images

‘The goal is really dialogue’

At this point, however, the battle may still be more symbolic than practical. Even Mar admits that his measure has little chance of passing. The proposed bill comes before the budget committee (“not a supportive body”, he says) on Thursday. If it survives that, it will go before the full board on 2 August.

Five of the board’s 11 members have announced their opposition to the measure; Mar needs six votes to get the measure approved for the November ballot. If the measure fails this week, it will likely re-emerge in the future as a general tax that’s easier to get approved, Mar says.

A key motivation behind the proposal is to get more concessions from technology firms, many of whom already have community benefit agreements in place that provide services to the homeless as part of their tax break. That means getting them to sit down with community organizers and hash out their differences.

“I think the goal is really dialogue,” Mar says. “We want to ensure there is input from the tech companies, sitting at the table with the communities that are being impacted by the tech boom as well.”