Tech hub Seattle wants to keep its soul

Seattle, which once took San Francisco as a model, is now figuring out that it's not what it wants to be

For years, business leaders in Seattle have closely studied the San Francisco region, seeking to emulate the way it churns out so many leading technology companies.

In large measure, those efforts worked. But now, leaders in Seattle are looking to the Bay Area as a different sort of model: a cautionary tale. The giant sums of money spinning around San Francisco in recent years, fueled by a booming tech sector, have generated hordes of 20-something millionaires and thousands more with six-figure salaries.

While that wealth has created a widely envied economy, housing costs have skyrocketed, and the region’s economic divisions have deepened. The median rent for a one-bedroom apartment in San Francisco is $3,530 a month, the highest in the country.

People in San Francisco worry the city is losing artists, teachers and its once-vibrant counterculture. The San Francisco Chronicle recently ran a photo essay titled ‘San Francisco’s Strange Detour From Paradise to Parody.’ Across the bay in Oakland, many residents grumbled last month when Uber said it would open a giant new office there.

The reaction has reverberated to Seattle and other tech hubs nationwide, prompting leaders to address how to maintain economic diversity and the souls of their cities as their tech economies reshape them.

“Seattle has wanted to be San Francisco for so long,” said Knute Berger, a longtime chronicler of life in Seattle. “Now it’s figuring out maybe that it isn’t what we want to be.”
While many cities would do almost anything for a deluge of high-tech jobs, others are grappling with the side effects that often accompany surging economies.

A plan by Google to expand its presence in Boulder, Colorado, with a new campus last year ignited a debate over home prices and traffic. Residents of Portland, Oregon, are pointing fingers at people moving from the Bay Area, blaming them for soaring home prices.

And in Austin, Texas, whose official motto is ‘live music capital of the world,’ a charity called Black Fret is awarding grants to musicians struggling with the rising cost of living in the city. Matt Ott, a marketing executive at a tech startup in Austin, who co-founded Black Fret, left the Bay Area about a decade ago because it got so expensive.

“It got really tiring to have wealth and consumption be the topic of the day,” he said. “I think that is a real danger here.”

Beyond Amazon and Microsoft, Seattle’s tech scene in the last 10 years has come to include dozens of smaller tech companies as well as engineering offices for Facebook, Google and other Bay Area tech giants.

The number of technology-related jobs in King County, which includes Seattle and neighbouring cities, jumped to almost 138,000 this year, from about 88,000 in 2005, according to Community Attributes, a research firm, and the Washington Technology Industry Association.

By far, the most significant changes in Seattle’s landscape have been created by Amazon. The company, known for its intense work culture, has transformed a once-industrial neighbourhood near Lake Union into a hive of tech workers wearing blue company security badges.

The debate over affordable housing in San Francisco has intensified in the last few years as the tech frenzy migrated to the city, once a backwater for startups, from Silicon Valley.
Corporate buses that shuttle San Francisco-dwelling employees down the peninsula have been the targets of activists protesting gentrification.

San Francisco is not ignoring its problems. The city’s mayor, Edwin M Lee, is pushing a plan to let developers construct taller buildings if they designate at least 30 per cent of them affordable for low- and moderate-income households, with the goal of creating 10,000 such units over the next five years.

And the San Francisco area remains a strong magnet for the tech-inclined. Alan Durning, a member of the committee that put together Seattle’s housing plan, said that the Bay Area’s affordable housing crisis was a central part of the group’s discussions, and that the area embodied the kind of situation most members desperately wanted to avoid.

“It’s not that we don’t want to be a thriving tech centre — we do,” Durning said. “It’s that the San Francisco and Silicon Valley communities have gotten themselves into a trap where preservationists and local politics have basically guaranteed buying a house will cost at least $1 million. Already in Seattle, it costs half-a-million, so we’re well on our way.”

Last year, Seattle had a net addition of more than 7,500 homes, a record for the city, compared with just over 3,500 in San Francisco, according to planning departments in both cities. Seattle partly benefits from having a larger area and about 185,000 fewer residents than San Francisco.

Much of the building boom here so far has been for apartments with high rents, geared toward tech workers. The city’s vibrant Capitol Hill neighbourhood has been a point of contention, with some residents being priced out of the area. The streets and freeways are increasingly choked with traffic, and locals often denounce the public transportation options.

Redfin, the online real estate brokerage firm, said the percentage of Bay Area residents who used the site to buy homes in Portland more than tripled to 12.6 per cent during the first seven months of this year compared with last year. Last month in Portland, someone slapped stickers showing the state of California with a slash through it on for-sale signs outside homes.

Roger Valdez, director of Smart Growth Seattle, a group that advocates high-density housing and is supported by developers, has been disappointed at the resistance to more development in the city.

“We’re at a crossroads,” he said. “One path leads to San Francisco, where you have an incredibly regulated and stagnant housing economy that can’t keep up with demand. The other path is something different, the Seattle way.”