This valley is their valley

Original Reporting | By David Noriega |

Most of that happens in San Jose. On the east side, it is routine for multiple families to crowd tightly into a single home. Camille Llanes-Fontanilla, the executive director of a community nonprofit in Mayfair, a neighborhood on the Eastside, said overcrowding is ubiquitous. “A large part of our work is organizing, and that includes a lot of door knocking,” she said. “We estimate that about 75 percent of all the single-family homes in Mayfair have three or four families each — at least.” When Llanes-Fontanilla or one of her organizers walks into a home, they can tell more or less immediately that there are several families in the main space. “But a lot of them actually have back quarters, too, or people living in the garage.”

Overcrowding reinforces the flow of poverty into the same parts of the city and the region. “People in Sunnyvale or Cupertino aren’t going to let four families move into one house,” Benner said. “It’s going to be concentrated in places where there is already a certain amount of poverty.” Thus, a disproportionate share of the region’s ballooning underclass is absorbed into East San Jose — a neighborhood that for years was known by the Spanish nickname Sal Si Puedes, or Get Out if You Can.

Overcrowding also skews the statistics on household income. Though Mayfair’s median household income, for example, is somewhere in the $30,000 range in the eyes of the census, that “household” might be measuring the incomes of several low-income families living together. In Llanes-Fontanilla’s reckoning, most families actually have income close to $10,000. “You just need that many people in a house to be able to live here on those wages.”

Even by the official measures, San Jose has a disproportionate concentration of low-income people: 57 percent of households and 63 percent of families earning less than $30,000 a year.


Cooperation, by whom and for whom?

Over the decades, several people have observed the imbalance in Silicon Valley and suggested some variation of the same fix: find ways to integrate the tax bases of the many municipalities in the Bay Area to defuse the competition and unwind the destructive patterns of wealth concentration and deprivation. (Orfield, the University of Minnesota professor, was among the proponents of these plans, which are discussed further in Part 4 of this series.)

Instead, Silicon Valley pursued a different kind of coordination: one spearheaded by business coalitions with the goal of making the Valley an ever more friendly place for business. Thus we have the mayor of Cupertino, Gilbert Wong, telling Remapping Debate that, rather than compete amongst themselves, the cities in the region “work together.” They do so specifically under the coordination of the Silicon Valley Leadership Group, a major business coalition founded in 1978 by David Packard, of Hewlett-Packard fame. Tellingly, the core intention is to “sell” the region to businesses that might consider settling or growing there—or elsewhere.

“We have to work together to be competitive,” Wong said. “If one of our cities can’t accommodate a company, we don’t want them to go to Austin, Texas, or to the [Research] Triangle in North Carolina. So through the Leadership Group, and through the chambers of commerce in the cities, we’ve been working together as one entity to sell Silicon Valley.”

Yet the competition within the region necessarily persists — indeed, Wong tacitly described as a victory the moment in the 1990s when Steve Jobs abandoned south San Jose as the proposed site for a new Apple Campus, choosing Cupertino instead. Such competition will exist as long as the municipalities within the region continue to monopolize their own tax bases, Orfield said, turning them into “warring fiefdoms.” Without fundamentally altering the framework, “how else are they going to get money?” Orfield said. “They have to use their land use plans to compete.”

A regional light rail line stops directly outside the headquarters of Cisco Systems, the networking equipment company. Throughout Silicon Valley, regional investment in public infrastructure has been skewed to the benefit of the tech sector.

In addition to the standard suite of tax and regulation causes, business coalitions in the Valley, like the Leadership Group and Joint Venture, do advocate for regionally coordinated investment in programs intended to raise the overall quality of life, most notably mass transit and affordable housing. But some in the Valley like to point out that having regional investment largely shaped by corporate interest groups means that such investment, unsurprisingly, often winds up skewed towards the interests of corporations.

Nari Rhee, the labor scholar and urbanist formerly at UC Berkeley, pointed to the example of regional mass transit. The Leadership Group has long been a champion for light rail across Santa Clara County, largely because of longstanding complaints from tech workers about congested highways. While there is certainly nothing inherently objectionable about putting money into light rail, there are important agendas embedded in the specific ways the money is raised and allocated.

The Leadership Group has on several occasions successfully lobbied for countywide sales taxes to support light rail. This is in part because, under California’s constricting revenue system, sales taxes are among the few easy options available. But this does not change the fact that sales taxes, as Rhee points out, are regressive: they disproportionately affect people on the bottom of the income scale, who devote larger portions of their earnings to basic purchases.

Then there is the question of how the money is allocated. A 2012 study by a group of community foundations in the region found that transit authorities subsidized light rail lines at twice the rate that they subsidized bus routes. This is in spite of the fact that buses are used far more heavily, mostly by low-income people in places like East San Jose who have little choice but to use public transit. Light rail, in contrast, mostly serves higher-income, long-distance commuters like tech workers.

Thus, even a goal as laudable as mass transit can become, in its way, a mechanism of upward redistribution: money is extracted disproportionately from the many to fund projects tilted to the benefit of the few. “When it comes to their priorities,” Rhee said, “high-tech companies are perfectly happy to socialize the costs, to make sure everybody pays.”

That, Rhee said, or they prefer the sort of charitable donation “where they can give the money on their own terms.” As is the case with affordable housing, for which the preferred solution among the corporate sector is donating voluntarily to nonprofit housing trusts.

This is emblematic of the Leadership Group’s wider view of the region’s inequality problem. Remapping Debate asked Kirk Everett, the Leadership Group’s vice president of government relations and tax policy, whether his organization’s member corporations felt a sense of responsibility toward the growing disparities in the Valley. “Absolutely,” he said. “There is a responsibility for our companies to step up — from foundation level work to philanthropic investments.” Everett and other Leadership Group spokespersons stressed, for example, that many companies had expressed a commitment to strengthening public education in science and math.

Again, the preferred method is voluntary contribution — funding for teacher training programs, in-kind donations of equipment, and the like. However, the Leadership Group opposes solutions whereby structural changes to the property tax code would have large corporations paying significantly more money directly into the school systems. “It’s tricky for us to focus on property tax in a vacuum,” Everett said, explaining that a “holistic” view is necessary. “You almost have to look at the entire picture of what the contribution is from the business community — from the philanthropic standpoint as well as the tax base.”

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