San Francisco Supervisor Talks About Impact Of Big Tech
AILSA CHANG, HOST:
What happens to a city when a whole bunch of its residents get really rich really quickly? A lot of people in San Francisco are worried about that right now. The city's in the middle of a tech IPO boom. Lyft and Pinterest went public earlier this year. Stock in Uber begins trading tomorrow. Other big names plan to follow. And that means thousands of new millionaires in a city that's already one of the least affordable in the country. This week, Gordon Mar, who serves on the San Francisco Board of Supervisors, proposed a new payroll tax targeting IPOs. He says the tech boom of the past decade has been good for San Francisco, but there are downsides.
GORDON MAR: We've seen growing traffic congestion and gridlock on our streets due to the huge influx of new workers here in our city. We've seen a growing housing crisis, housing affordability crisis, to the point where the median rent right now for a one-bedroom apartment is $3,500 a month.
MAR: Yeah. And then sort of related to this, our homelessness crisis - tens of thousands of our community members continue to live unsheltered on the streets due just to the growing economic divide here in our city.
CHANG: How much does the slew of IPOs worsen that situation?
MAR: That's something that city leaders and, I think, most members of our communities are very concerned about. There's been a number of studies that have documented how IPOs have a very significant impact, increasing the housing costs in the immediate neighborhood. This is an unprecedented situation, where we have seven large tech companies going public in the same time frame, all in the same city. So there's a lot of concern about this.
CHANG: So how does your proposed tax address some of those concerns that you've just stated?
MAR: It would basically just restore a tax on stock compensation income in our city. And this is a tax that actually existed prior to 2012, when we started granting tax breaks to grow the tech sector in our city. And the revenue would be used to address the growing inequality crisis in our city, to expand affordable housing for working-class and middle-class residents, to support and stabilize our small businesses here in the city that are struggling and haven't benefited from the same tax breaks.
CHANG: And just to be clear, you've written this proposal so that this tax would apply to IPOs that have already recently happened, like Lyft and Pinterest. And we should note that your proposal still needs to be passed by the San Francisco Board of Supervisors, and then it would go directly to the voters on the ballot in November.
MAR: Exactly. I mean, it's still - there's still going to be a lot of public process and debate about this.
CHANG: OK. Now, one of your colleagues on the board of supervisors told the San Francisco Chronicle that it's, quote, "arrogant" to think that tech companies won't leave the city if they are taxed more aggressively. Are you worried about that risk, that your tax proposal might drive some tech companies out of San Francisco?
MAR: I mean, that's something that I wouldn't say I'm worried about, but it's definitely something that I'm thoughtfully considering, as well as I know my colleagues will be.
CHANG: So how do you protect against that risk?
MAR: I do feel like that fear is overstated when it comes to the IPO tax. No. 1 - it's a very small tax. We're talking about 1.5% on the immense wealth that'll be flowing in when these companies go public. I'm very interested in ensuring that we have a balanced economy here in San Francisco that includes a tech sector but also supports other sectors that haven't benefited from the same tax breaks.
CHANG: Now, San Francisco is a city where a family of four earning $117,000 a year qualifies as low-income, according to the Department of Housing and Urban Development.
CHANG: That is just a staggering figure. Is the battle to keep San Francisco affordable already a lost battle?
MAR: That's a very good question, Ailsa. And I would - you know, I'm still optimistic that we can turn things around here and right the ship in San Francisco. We can't just keep supporting job creation and growth unchecked. And now in 2019, it's time for us to ask the tech sector to start paying their fair share in taxes so that we can support everybody to be able to live and thrive in our city.
CHANG: San Francisco Supervisor Gordon Mar joined us from member station KQED in San Francisco. Thank you very much for speaking with us.
MAR: Thank you, Ailsa. Transcript provided by NPR, Copyright NPR.