The delusions of an American Technopolis

Original Reporting | By David Noriega |

The fiscal picture was made worse by the fact that the redevelopment machine siphoned resources into high-capital projects, like the arena and the convention center, initiatives that cost more than they brought in. Even now, after Governor Brown shut down the redevelopment program statewide, the successor to San Jose’s redevelopment agency still has close to $2 billion in outstanding debt, leaving the city and its residents stuck with bond payments that drain its treasury.

Worse, San Jose continued to grow, adding to the population needing basic services at a rate that still outstripped the revenues the city could draw to pay for them. The city was already on insecure footing when the dot-com bubble burst over Silicon Valley, so the recession that followed in the early 2000s hit the city especially hard. It was still reeling by the time the financial crash of 2008 pushed it about a hundred million dollars underwater.

So why didn’t the growth model that San Jose pursued for decades, a model whose principal focus was attracting business and raising the value of land and property, do better? “Over the long cycles of how cities evolve and devolve, that model feeds on itself, it undermines itself,” said Chris Hoene, the California Budget Project director. “Suddenly cities find themselves in a spot where they have to provide a high level of services, but they don’t have the resources for it because they signed on to this low-tax regime. And then they’re stuck.”

Thus, through cycles of boom and bust, San Jose’s patterns of development left it perennially unprepared to weather the downturns. “You know that line by Donald Rumsfeld that says, ‘You go to war with the army you’ve got’?” Bob Brownstein asked. “Well, you face a recession with the tax base you’ve got. That has always been San Jose’s problem.”

Read the introduction (“Left behind: San Jose and the broken promises of the neoliberal era”)

Read Part 1 (“Deep-rooted dysfunction”)

Read Part 3 (“This valley is their valley”)

Read Part 4 (“Forging a different path”)

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