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Gentrification’s Roots in the Post-Industrial City

Op-ed: De-industrialization isn’t just a Detroit story. It’s also the story of Silicon Valley, whose crown jewel, San Jose, urbanized to house workers for now long-outsourced microchip factories.

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The following is adapted from “Defying Displacement: Urban Recomposition and Social War” by organizer Andrew Lee (AK Press), which was published Feb. 6.

Some outside the region might believe Silicon Valley and its “capital,” San José, to be inhabited exclusively by software engineers wearing corporate-branded hoodies. In reality, an overwhelming majority of Silicon Valley residents do not work in tech.

In 2019, those employed in jobs related to computers, mathematics, management, business or finance (in any industry) made up just 33% of San José’s home county of Santa Clara. The share of the labor force working in computers had, however, increased by almost 50% in the preceding nine years.

Though most Santa Clara residents aren’t tech workers, only 4% of the population works in production or manufacturing. For the most part, the great assembly lines that drew in workers for tedious, monotonous, but reasonably compensated jobs are gone. Electronics manufacturing has almost entirely left Silicon Valley. While chips are still designed by Apple, Broadcom and Nvidia, none of these companies own semiconductor foundries. Instead, they depend on an array of subcontractors who largely manufacture in South Korea, Taiwan, Japan and, increasingly, China, where the importance of “new-type industrialization” and “a new pattern of opening up” are emphasized as long-term goals for economic development.

(Courtesy of AK Press)

The wake created by the departure of electronics assembly from Silicon Valley has been largely filled by service industry and maintenance positions. Outsourcing and automation have made a working population once critical to investors now in many ways inconsequential to their quarterly profits.

Thus in San José, one of the richest cities in the United States, the “capital” of a region whose name is popularly associated with opportunity and young wealth, the average service industry worker’s salary of $35,241 is shockingly close to the $25,800 it costs to rent the average studio apartment. This leaves $26 a day for all the remaining necessities of life, an absurdity in one of America’s most expensive markets.

Renting space in living rooms and garages is commonplace. A San Francisco closet went for $1,200 a month. One woman living in a three-bedroom house with a dozen occupants in San Mateo got Covid-19 and was forced to decamp to a closet: it was the only free space in her home where she could be sure not to pass the virus to her children. The faculty at Cupertino’s De Anza College, one of the top-rated community colleges in the nation, voted in 2019 to allow the 20% of students who are homeless to sleep overnight in their cars at the campus parking lot.

“I pay $475 for half of a room in a house that has no air conditioning, no heating, no laundry,” says Emerald, a housing activist on the board of directors of the South Bay Community Land Trust. “Our shower is a converted closet. We’ve had rats. We’ve had cockroaches. Our window screen is a bunch of chicken wire nailed to a two-by-four. And that’s a good deal.”

This suffering is obscured from newly-arriving professionals since the dynamics of displacement aren’t uniformly distributed across the metropolis. Many on Google’s Mountain View campus remained blissfully unaware of the park two miles away, almost completely encircled by RVs, serving as the new homes of the evicted.

“In our area, if you’re making $117,000 you’re considered low-income,” says Liz González, a co-founder of the South Bay Community Land Trust. “People who aren’t making $117,000 can’t afford affordable housing here. People are extremely rent-burdened, doubling up into apartments, multiple families in single-family homes and apartments in conditions that are really unlivable, paying exorbitant rent. This is normal here.”

The conditions of contemporary Silicon Valley are sometimes held up as a positive example against the cities of the Rust Belt, with their plummeting populations and depleted city coffers. “How can we, as a nation, maximize the chances that our innovation hubs follow the path of the San-Francisco-Silicon Valley cluster and not that of Detroit and Rochester?” writes economist Enrico Moretti in his 2012 book “The New Geography of Jobs.”

As the example of Silicon Valley shows, the obliteration and dispersal of an industrial base and the impoverishment of what Moretti labels “low-skilled workers” is necessary for the successful concentration of “high-skilled workers” in his so-called “innovation hubs.”

People who distinguish between “high-skilled” and “low-skilled” jobs should first attempt to work 10 hours on an electronics assembly line or survive a dish pit during a Saturday night dinner rush. Since such people believe the latter jobs require only minimal skill, they should naturally excel. What actually distinguishes these two types of jobs is not skill but compensation, demographics, and whether the necessary knowledge and practices are acquired on the job or at college. Those who receive more justify the poverty of others by imagining it is due to differences in an abstract variable called “skill” which we happen to measure only by counting the years of formal education a job requires. Little wonder that by this standard, emerging as it does from academic literature, it is professors who have the most skill of all.

Dispossession and deprivation in the wake of outsourcing and automation is just as necessary for the modern Bay Area as it is for contemporary Detroit, a “global metaphor for capitalist decline” after waves of deindustrialization from the 1950s to 1970s.

In 1958, Detroit’s 3.5 million square foot Packard Automotive Plant was abandoned after Studebaker-Packard moved production to South Bend, Indiana — only to end U.S. automobile production entirely three years later. Though the Packard building in Detroit remains empty, Ford purchased Michigan Central Station, mothballed in 2018, to make a “new mobility innovation district” for “mobility innovators and disruptors from around the world.”

Large cities on the hunt for economic growth aspire to more than the arrival of one new employer or mixed-use building. The industrializing city had certain requirements: railroads to ship commodities, slums to house workers, access to the machines for the sweatshops and the immigrants to work them. The modern “innovation hub” also has preconditions, among them an ecosystem of amenities to attract well-paid technical employees.

This means green-lighting new housing and office developments, supporting the creation of retail districts where new residents might dine and shop, and municipal investments in policing and infrastructure to create a habitat appealing to corporate employees and conducive to business operations. Such massive, interconnected projects are most profitable when constructed on top of districts with the most diminished land value, especially those close to infrastructure and potential commercial corridors.

Attempts to create such an ecosystem in one fell swoop involve massive redevelopment projects, such as Google’s plan to create a “smart city” along Toronto’s waterfront through its Sidewalk Labs affiliate. (Read more about Sidewalk Labs in an excerpt from Josh O’Kane’s book “Sideways: The City Google Couldn’t Buy.”)

The proposal for the “IDEA district” ballooned from 20 to 190 acres, with development to begin in the Quayside neighborhood, an “underutilized,” “post-industrial piece of land” situated close to downtown “at the nexus of many key corridors.” The company’s comprehensive plan for the eastern waterfront included housing, offices, shops, and “civic amenities,” with infrastructure investment to “unlock” new neighborhoods. Google’s Canadian HQ would relocate to form part of an “innovation campus.” The city of Toronto would see its property tax revenue triple as “complete communities” attracted new employees.

The IDEA district soon became a lightning rod for controversy. Google hoped to achieve massive data collection through sensors embedded throughout the development to create what Sidewalk Labs CEO Dan Doctoroff had called a “Google City” whose “urban data” would comprise a “test bed and product/service trial venue.” An organization called Block Sidewalk coalesced against “ubiquitous surveillance,” the massive transfer of municipal property (in actuality the occupied territory of the Mississaugas of the Credit) to American developers and tech firms, and fears over impending Silicon Valley-type gentrification.

Though the company conveniently attributed the project’s cancellation in May 2020 to Covid-related “economic uncertainty,” Block Sidewalk’s organizers recognized it as the result of community mobilization.

“This is huge, we are sending a message to Silicon Valley on behalf of all those around the world who are fighting big tech in their cities. The Quayside project got mangled down from an 800-acre vision of a surveillance state to a bid for an office building on a 12-acre site. We knew all along that Sidewalk can’t realize its tech dreams on 12 acres alone, so this has been coming for a while,” said Block Sidewalk’s Julie Beddoes.

As Block Sidewalk’s Thorden Wieditz added, “This outcome is a testament to the principled and courageous stance taken by citizens to protect Toronto from Google’s corporate takeover. Without the on-the-ground organizing and the commitment of so many individuals, groups and organizations, this would have not been possible.”

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Andrew Lee is the author of Defying Displacement: Urban Recomposition and Social War (AK Press, 2024) and an editor for Dismantled Magazine and The ARD. Formerly a participant in anti-gentrification struggles in the San Francisco Bay Area, he supports community efforts to protect Philadelphia’s Chinatown from the 76ers' proposed arena. With over a decade of experience in anti-authoritarian grassroots organizing, Lee’s work has also appeared in outlets including Yes! Magazine, Teen Vogue, and The New Inquiry.

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