Hitting the brakes on our tech brain drain
Shawn Glanton is standing on Front Street in Downtown Santa Cruz gripping a shiny metal thermos filled with Hawaiian-blend coffee. The early morning sun is creeping over the trees of San Lorenzo Park, and one of Glanton’s coworkers is standing beside him. More arrive over the next 10 minutes—some of them on bicycles and Razor scooters, many hauling backpacks and messenger bags.
Eager to sit down, Glanton peers past them, waiting for the white double decker bus that takes the group over the hill to their jobs at Googleplex in Mountain View.
“You can relax, maybe surf the web, catch up on work,” Glanton, a Google employee, says of the daily shuttle ride. Glanton, who says he might have 60 new emails to catch up on since yesterday, also likes the environmental benefits of shared transportation.
Glanton is one of the 20,000-plus county residents who commute over the hill for work. It’s a big number, and one that puts a drain—developers sometimes call it “leakage”—on our economy. But the exact toll is harder to calculate. Analyst Bob Gibbs told Santa Cruz City Council in 2011 that Santa Cruz’s leakage in retail was at a whopping 85 percent, amounting to $1.8 billion lost in annual sales tax revenue. Gibbs suggested part of that leakage was from people shopping over the hill after work and during lunch breaks.
These days, commuter buses for companies like Apple, Netflix, Yahoo and Google are making it easier than ever to live in one place and work in another.
However, according to a recent survey by Civinomics, most local tech commuters would take a salary cut if it meant getting to work in Santa Cruz. Survey respondents said they would forgo an average salary cut of 9 percent to work locally. But with an average current salary of $153,000 among the same survey group, that might be no small chunk of change.
“That’s just it,” says Glanton, who didn’t take the survey, but says he wouldn’t take a pay cut. “They don’t have the kind of money here that’s going to pay me what I make over there.”
Either way, Civinomics co-founder Robert Singleton says the survey results are a good sign that Santa Cruz is rich in one of the most important resources for starting new tech companies—people.
“Santa Cruz is actually exporting software developers,” Singleton says. “That alone [gives] us an unparalleled opportunity for tech growth. That’s the hardest part about making a new company in software—the competition for developers. Silicon Valley has such a shortage of talent that they’re bringing people in from other countries.”
South Swell Ventures, an investment firm owned by Santa Cruz techie Bud Colligan, helped sponsor the survey.
Looking at the results, Economic Development Department Executive Director Bonnie Lipscomb is optimistic. She says the people commuting elsewhere simply haven’t yet realized the opportunities that exist here. “This confirms our marching orders to do a better job of marketing to people [who commute] over the hill,” says Lipscomb, who thinks Santa Cruz companies are capable of paying competitive salaries. “The businesses are here and they’re growing every day.”
Santa Cruz economic developer J. Guevara is also hopeful, and points to the success of the Tech Raising events, UC Santa Cruz’s recent hackathon, and Santa Cruz New Tech Meetups, which brings Guy Kawasaki to the Del Mar Theatre next month, as indicators of the swelling local tech scene. “There’s a palpable energy in the tech ecosystem right now,” Guevara says. “Santa Cruz tech is on fire.”
Tale of Two Cities
In Santa Cruz, tech shuttles are just the latest development in a county that some have long viewed as a “bedroom community” for Silicon Valley. But, to the north of Silicon Valley, the buses are now an item of contention. The shuttles have become a symbol of Bay Area gentrification as the commuters send rents soaring in historic San Francisco neighborhoods, some of which were, until recently, rent controlled.
To raise awareness about the impacts of Silicon Valley’s tech overflow into San Francisco, activists have repeatedly blocked Google and Facebook buses en route to work in recent months.
The protests made headlines worldwide. “It allowed us the ability to show city hall and other people the impact these buses have,” says Rebecca Gourevitch, an organizer for Heart of the City and Eviction Free San Francisco.
Activists have been leaving fliers and stenciling anti-eviction sentiments on San Francisco sidewalks. In Oakland, protesters mobbed two more Google buses, slashed tires and broke a window. Although, the ongoing demonstrations have been mostly nonviolent.
In Santa Cruz, the discussion over commuter buses has a different tone. There are no activists trying to halt an influx of wealthy workers who could drive up housing costs—at least not yet. Rather, the local conversation hinges on keeping people who already live locally in town for the workday.
There is big money at stake, too. Singleton says the tech commuters not only represent an untapped economic boost, but also a much-needed source of revenue to cover roads, social services and the costs of keeping government in business.
“It’s one of the big problems we’re suffering from in Santa Cruz: we don’t have the tax base to support our infrastructure needs,” Singleton says, adding that there are limitations on the county’s two current main industries. “Tourism is great, and it’s growing, but it’s not going to expand 30 percent in the next few years. Neither is agriculture.”
Morning tech commuters are reluctant to talk to any reporter clutching a notepad, even off the record. That makes Civinomics’ survey data all the more compelling. In their survey comments, some commuters said the town’s creative but lackadaisical reputation, real or imagined, gets in the way of serious companies wanting to invest here. “A lot of people in Santa Cruz do not have the work ethic of the Silicon Valley. They want to surf, smoke pot,” one person said.
Others blamed perceptions that Santa Cruz government doesn’t care about businesses. Many still feel, one person suggested, that Santa Cruz essentially chased out companies like Texas Instruments 15 years ago, and that its reputation hasn’t recovered. “Historically Santa Cruz has been bad to their startups and bigger tech companies,” the respondent said.
If the goal is to create more tech jobs, Gourevitch has a few words of caution. The City of San Francisco has been inviting and growing more tech companies itself. Twitter moved to the Tenderloin District, a low-income and notoriously crime-ridden neighborhood, last year. While it’s generally better when people work where they live, Gourevitch says even people making the big bucks locally can displace lower-income people who work and engage in their communities.
“I don’t know what could happen in Santa Cruz, but it’s quite possible that it could become desirable for tech companies [and their employees]—where there are already people living,” says Gourevitch, a former Santa Cruz resident who is moving back this fall to study social documentation at UCSC. “And then the people living in Santa Cruz could move to Watsonville, where more people could be displaced.”
Singleton says change can be hard, but avoiding it isn’t any easier.
“We don’t want to be the next San Francisco. We don’t want hyper-gentrification. We want to maintain a unique common identity,” he says. “But in order to overcome the fact that we have one of the worst crime rates in the state and an underfunded police department, you need to grow the tax base, especially if you want to grow homeless services, especially if you want to grow drug treatment services. Tech has the greatest potential for growing the tax base quickly.”