Across Silicon Valley, cities may tax big tech to help struggling renters

By Sean Captain

August 13, 2018

The average rent for a studio apartment in San Francisco is around $2,500 per month. According to the traditional (and now-outmoded) rule that housing shouldn’t exceed one-third of income, a single person would need at least a $90,000 salary to live on their own in the city. That may be easy for software engineers and financial workers but it’s awfully tough for teachers, and unimaginable for baristas.


To help ease the affordability crisis, the city votes in November on a proposal to tax its wealthiest companies (earning over $50 million per year) and raise $300 million annually to build housing, subsidize rents, and expand homeless services. Today, the initiative called “Our City, Our Home” got its official designation as Proposition C, spurring what is sure to be a fierce round of campaigning for and against the measure.

“The problem is not growth. It’s how does that growth get distributed?” says city supervisor Jane Kim. She’s a hero of the left, despite the fact that she authored a recession-era policy giving Twitter and other companies a six-year tax holiday, and has been an early supporter of Prop C.

Voters will consider similar initiatives farther down the bay. In Google’s home town of Mountain View, Measure P would greatly expand the city’s annual business tax–from $30 for an entire company to a per-employee tax of up to $150 for companies with over 5,000 workers. That would boost annual revenue from $250,000 to $6 million (with Google contributing over half, per an analysis by the Palo Alto Daily Post). Measure P focuses not on housing, but on infrastructure.

Finally, the city of East Palo Alto (far poorer than its tony neighbor) will vote on a land parcel tax for new and existing commercial office spaces of more than 25,000 square feet to subsidize housing construction, rents, and education programs like internships. (Amazon, for instance, has a 200,000-square-foot presence.) “We see all these companies coming into neighboring communities, including East Palo Alto,” says city council member Carlos Romero. “Yet none of those tech jobs seem accessible to us, because we’re told we don’t have the appropriate capacity, the education, the experience.” The measure, which gets its letter designation later this week, would raise from about $1.65 million to $7.5 million, depending how much the city grows. (Its total annual budget is currently just $41 million.)

The flood of activity (including a shelved tax measure in Apple’s hometown of Cupertino) comes care of a ruling by the California Supreme Court. Traditionally, California tax measures require a two-thirds vote to pass. But last year, the court ruled that only a simple majority should be required. “And we were like, this is the time!” says Sam Lew, policy director at the San Francisco Coalition on Homelessness and now campaign manager for Prop C.