San Francisco's Prop C Would Make Tech Companies Address the Homelessness Crisis They Helped Create

Protestors gathered outside Twitter Inc. headquarters to voice opposition to the large tax breaks and loss of affordable housing after Twitter moved in the area. (Photo: Kim Kulish/Corbis via Getty Images)

San Francisco's Prop C Would Make Tech Companies Address the Homelessness Crisis They Helped Create

Will San Francisco ask its wealthiest corporations to pay slightly more so that thousands of currently homeless people can have a roof over their heads?

National media coverage of San Francisco's Proposition C -- which would raise taxes on the city's largest businesses in order to increase funding to address the city's homelessness crisis -- is largely focused on how the question has divided tech titans.

The highest-profile spat has been between Salesforce's Marc Benioff and Twitter's Jack Dorsey, the former of whom gave millions of dollars to the campaign to pass Proposition C, while the latter has derided the initiative as "quick acts to make us feel good for one moment in time."

But this debate isn't really about tech companies and the political preferences of their wealthy CEOs. Proposition C is about our priorities at a time when wealth and power are more concentrated in America than they have been in decades.

Were Proposition C to pass, taxes would increase for 300 or so of the city's biggest businesses, raising $250-$300 million for homelessness supports. (Last year, the city spent $380 million on homelessness programs, so this proposal would increase that funding by at least 65 percent.) At least half of the new funds must be dedicated to permanent housing, which research shows is the most effective way to combat homelessness, with the remainder split between mental health care, shelters, and prevention efforts.

"The idea is simple. It's about taxing our largest and wealthiest corporations and redistributing that to our most vulnerable communities," said Sam Lew, policy director at the Coalition on Homelessness. "The everyday San Franciscan won't be impacted by this tax. It's really those who are making the most profit and asking them to pay their fair share and give back to the community."

If this sounds somewhat familiar, that's because it is. Seattle's city council passed and then rescinded a corporate tax to bolster funding for homelessness prevention in April, backtracking after the city's biggest companies -- and most prominently Amazon -- objected and threatened to put a direct vote over the issue onto the ballot in November. Amazon also halted a construction project in the city during the dispute, threatening to blunt its economic activity if the tax remained in place.

"I and other people out on the streets have reached the conclusion that this is not a winnable battle at this time. The opposition has unlimited resources," said one city council member who voted first for the tax and then for its repeal.

A similar dynamic is at play in San Francisco ahead of November's vote. The threat from big businesses, such as Square, Lyft, Stripe and the others who have donated to a "No on C" campaign, is that Proposition C would kill jobs or deter companies from coming to the Bay Area without solving the homelessness problem. However, a report from the city controller found that were the tax enacted, there would only be 725-875 fewer jobs in the city over the next 20 years, amounting to just 0.1 percent of total employment, while the measure would provide housing for thousands of people.

The "Twitter tax break" saved companies $34 million in 2014 alone.

One of the selling points for Proposition C campaigners is that the measure would simply offset some of the tax benefits that corporations received in 2017 courtesy of the Trump administration and conservatives in Congress. It would also begin to counteract some of the vast under-investments that the federal government has made in affordable housing funding since the Reagan administration, says Lew.

"Because of that huge divestment in public housing, there's been an increase in homelessness across the United States and there hasn't been a reinvestment in that in the last 30-35 years," she said. "What we're saying in San Francisco is that we're going to be leaders in providing housing for people who need it. We're actually going to spend the money that we need to spend to house people."

San Francisco has about 7,500 people who are homeless, according to the latest data, which is almost certainly an undercount due to the inherent difficulties in accessing the homeless population. People experiencing homelessness in San Francisco are also disproportionately people of color or members of the LGBTQ community, per the city's most recent survey.

Homelessness in both San Francisco and the U.S. has risen in recent years for many reasons, but one of them is growing economic inequality. In California and San Francisco in particular, that inequality is boosted in no small part by the presence of America's tech titans. Plenty of research has shown that tech clustering is responsible for the growing wage gap in big cities, and for the divergence between wages in those cities and elsewhere. And that clustering didn't happen completely organically: San Francisco provided tax breaks to tech companies that settled in the city, with one known as the "Twitter tax break" saving companies $34 million in 2014 alone.

Tech workers have seen their incomes rise in California. Everyone else hasn't been so fortunate.

Tech workers, especially at the richer end of the income scale, have seen their incomes rise in California. However, everyone else hasn't been so fortunate: According to a recent report, wages for 90 percent of California workers are lower than they were 20 years ago. There's also no shortage of stories about other inequalities in the Bay Area, on everything from food to transportation to education.

Even a decent paying job is no guarantee of affordable housing, thanks in part to the tech-industry driving gentrification and increased housing prices in California's major cities. Average rent in San Francisco varies depending on how it is calculated, but many analyses place it above $3,000 per month. According to the National Low Income Housing Coalition, renting a modest two-bedroom home in the city requires a wage of more than $60 per hour.

These figures, not which tech CEO said what on Twitter, get at the essence of Proposition C. The only question that really matters is: Will San Francisco will ask its wealthiest corporations to pay slightly more so that thousands of currently homeless people can have a roof over their heads?

"We're on this national platform now because two CEOs of tech companies are fighting about whether it should be passed," said Lew. "But at the end of the day we're fighting for a measure that's going to save lives regardless of what billionaires are thinking."

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