Jun 11, 2018 7:00 AM

How Tech Shaped San Francisco’s Unresolved Mayor’s Race

This was supposed to be the election where the city rebelled against years of tech-fueled growth. It's not turning out that way.

Image may contain Mark Leno Human Person Charmaine Tweet Clothing Apparel Glasses Accessories and Accessory

The last time there was a real contest for the mayor’s seat in San Francisco, residential rents were falling, the city had 15 million square feet of vacant office space, the empty headquarters of Pets.com was being converted into loft apartments, Apple debuted the iTunes store, the CIA’s venture capital arm invested in a 3-D mapping startup that would become Google Earth, the CEO of Airbnb was enrolled in art school, and the Winklevoss twins had just hired a Harvard sophomore named Mark Zuckerberg to noodle around with their code.

In the past 15 years, the second coming of the tech boom has remade San Francisco, and last week’s mayoral election---an unexpected race after Mayor Ed Lee’s death in December---was marbled through with anxieties over the industry’s ascent. For decades, City Hall has been run by moderates pushing pro-business interests, who cleared a path for tech’s insatiable growth. But in the midst of all that wealth creation, San Francisco’s most vulnerable residents were marginalized; its middle class vanished. This was supposed to be the election where progressives pushed back, setting the agenda around issues of inequality, such as housing, homelessness, and affordability.

The race came down to three left-of-center Democrats, all current or former members of the city’s Board of Supervisors, all supporting propositions that would increase a tax on commercial rents, and all claiming to want to increase affordable housing: London Breed, Mark Leno, and Jane Kim, from moderate left to progressive left.

Despite the ideological overlap, the campaign turned divisive, distorted by attack ads, misleading Facebook posts funded by dark money, and unexpected alliances. Tech played a central narrative in some of the most bitter rifts.

Breed, who grew up in public housing, is a lifelong renter and would be the first black female mayor of San Francisco, a city whose African American population has atrophied to less than 6 percent. Yet she was denounced as a tool of the tech establishment because of her ties to the city’s top tech donor. Meanwhile, critics of Kim, the loudest voice for the argument that tech should pay its fair share, lambasted her role in the 2012 tax breaks that lured Twitter to a then-troubled part of town; those breaks have since become symbols of the city’s embrace of tech. Then, less than a month before election day, Leno and Kim teamed up, urging their supporters to “Stand up to the billionaires” through San Francisco’s complex ranked-choice voting system by naming the pair their top two choices, in either order.

Almost a week after the election, there’s still not a clear read on how voters viewed tech’s influence. Leno briefly held the lead in the complex vote count, but as of Sunday, Breed was ahead by 1,580 votes; the counting is expected to drag on for weeks.

The mayor’s powers are limited, but it’s a decision worth watching, especially in San Francisco, an incubator not just for invasive species of ride-hailing apps, short-term rental platforms, for-profit philanthropy, and electric scooter-shares, but also for public sentiment towards the tech industry, starting with the humans at the epicenter of its seismic waves. As tech executives testify around the globe, swearing they can still make the world a better place, San Francisco is the quickest test to tell if they really want to be good neighbors.

The political shift, however symbolic, is already underway. “Policies like the Twitter tax break would never pass today. The reverse is now being considered: How to tax and regulate tech,” says John Whitehurst, a veteran political consultant who worked on campaigns against ballot measures to tax commercial real estate.¹

Perhaps in anticipation of that reversal, tech donors turned tight-lipped—switching tactics from six years ago, when the CEOs of Twitter and Airbnb went on camera promising that tech could make San Francisco run smoother. Angel investor Ron Conway, known as Mayor Lee’s longtime benefactor, threw his support behind Breed but tried to avoid the spotlight, telling The New York Times that he was staying out of the mayor's race to focus on other contests. Privately, however, Conway encouraged colleagues to funnel money for independent expenditures through a PAC called Progress San Francisco. They obliged. Y Combinator founder Paul Graham, former Facebook executive and venture capital investor Matt Cohler, and Instagram CEO Kevin Systrom each donated $10,000 or more. To be sure, Kim had a couple of big tech executive donors as well, the CEOs of Zendesk and Automattic, the maker of Wordpress. But she had nowhere near the same level of coordinated support as Breed, who also received support from Twitter cofounder Evan Williams, who donated $100,000 to another PAC supporting Breed.

Brian Singerman, a partner at Founders Fund, the venture capital firm cofounded by Peter Thiel, said he donated to Progress San Francisco because Breed’s housing proposals were the most comprehensive and realistic. “Housing is critical—it won’t solve all our problems, but it will make the others much easier to address,” Singerman said. “My support for her had nothing to do with the tech industry and everything to do with what’s best for San Francisco.”

Automattic CEO Matt Mullenweg said the messages from PACs supporting Breed “seemed to be more about buying influence than debating issues, as reflected in the highly personal and sometimes misogynistic attacks some made against Jane. It was schoolyard bullying and it looks like at least half of the city rejected it,” he told WIRED.

Jason McDaniel, a political scientist at San Francisco State University, says that the negative characterization of Conway and his ilk was a tactic for galvanizing opposition, not a sign of anti-tech sentiment from voters. Conway “has been created into a populist villain, in the sense of the Koch brothers here in San Francisco, by a faction here that’s used to creating villains and running against the tech community,” McDaniel says. Conway declined to comment.

Of the dozen activists, donors, and consultants who spoke to WIRED, Whitehurst was one of the few who believe that a Leno victory---with a “progressive” majority among the supervisors---could put the brakes on tech’s reign. “City Hall will not be pro-business—instead you could see local privacy regulations, even further clamping down of Airbnb, more taxes on companies, increased gross receipts tax, repeal of the Twitter tax break,” he says. “Tech isn’t scared because they haven’t experienced it yet.”

Supervisor Aaron Peskin, who supported both Kim and Leno, voiced a more common prediction: “None of these people are actually posing huge threats to [tech]. It’s just that for the first time we’re going to have a mayor that supports sensible regulation,” he says. “It’s not like we had a radical revolt, it’s just that the stranglehold of big tech on San Francisco has been diminished.”

Still, tech’s shadow across the city’s landscape is impossible to shake off. The mayor’s race centered around a vigorous battle over housing in the city, where buying a home is inconceivable for many and longtime residents are being squeezed out. Since this is San Francisco, of course the factions don’t break across clean lines.

Many of Breed’s supporters consider themselves YIMBYs, short for Yes In My Backyard, contrasting themselves against residents who oppose new developments. Laura Clark, executive director of YIMBY Action, a nonprofit that endorsed Breed, says more ordinary workers at tech companies, including sales, marketing, and customer-service employees, are also hurt by the housing crunch. “They’re largely renters who are extremely bitter about the fact that they moved here for what looked like an amazing job and are spending 50 percent of their income on rent and feel like they are displacing residents,” she says. “The level of alienation is palpable, the guilt, to some degree the self-loathing.”

However, Shanti Singh, a former employee of an ad-tech company who now works as communications and development coordinator for Tenants Together, says there’s a troubling parallel between the YIMBY movement and other civic remedies prescribed by the tech industry that tend to ignore real-world complications.

“The richest and loudest people in tech, who tend to be white male venture capitalists, they are fundamentally aligned with keeping the status quo. They back the same candidates, they fund the same PACs,” Singh says. She believes they steered support toward additional housing, but without talking to advocates who’ve been working on the issue for years, or considering the potential effects on the people these developments will displace.

While advocates were willing to wade into tech’s gray areas, the campaigns stuck closer to the shore. Even now, when Kim’s chances of winning the election are slim, her spokesperson wouldn’t say whether she was “standing up” to tech billionaires or some other kind of fat cat. “Jane was referring to the billionaires who thought they could buy City Hall,” the spokesperson said. Leno’s camp did not respond to the question.

McDaniel, the professor, says that may be a dog whistle. “In San Francisco, if you say billionaire, the image is tech billionaires, it’s not William Randolph Hearst. It’s almost like the first name is Tech and the last name is Billionaire.”

¹ CORRECTION, June 11, 1:05PM: Political consultant John Whitehurst worked on campaigns against two ballot measures to tax commercial real estate. An earlier version of this story incorrectly said he worked in favor of one of the measures.