To fight a housing crunch of their own creation, tech companies are planning company towns worthy of Gilded Age robber barons
Much contemporary criticism of Google focuses on the invisibility of the company’s vast monopoly power and the consequent indifference of both everyday consumers and government regulators. In ways that we rarely stop to acknowledge, much less understand, the tech giant’s digital domination shapes everything from the profitability of individual corporate enterprise to our consumption and communication practices.
Soon, however, as Google expands its geographic footprint beyond the digital world into physical urban spaces, the potential impacts of the company’s unchecked powers may become both obvious and intolerable. This year alone the tech giant will spend $13bn expanding in 24 US cities. In some places, the company will bring not just jobs but entire campuses with fully equipped offices, data centers, retail spaces and even residences.
Like industrial monopolies before it – from US Steel to the Pullman Company – Google is leveraging its significant influence to create entire urban economies dedicated to its own productivity and profitability. While this may sound like a recipe for economic boom, history suggests that the intimate intertwining of monopoly-driven corporate profit, governance and everyday life may undermine both democracy and individual autonomy. Already, much of Google’s geographic development has been shrouded in secrecy, making it nearly impossible for local communities to understand – and to oppose – the long-term impacts. Only through public records releases has the public learned that the US locations of Google’s expansion have been influenced by furtively secured tax breaks.
But are the jobs and financial investment that this behemoth company brings nonetheless worth it – especially for cities with stagnant economies? What’s the worst that could happen?
It’s hard to imagine, but the example of Google’s expansion in San Jose – where a profoundly undemocratic, feudal nightmare looms – may be instructive. Google has spent $380m on land for the development of a new company campus in this Silicon Valley hub. Rather than celebrate the company’s impending presence, savvy residents and watchdog groups have raised alarms that Google’s expansion will exacerbate the high cost of living and augment displacement and homelessness. Amplifying their fears is the reality that city’s negotiations with Google have essentially taken place behind closed doors through the company’s use of non-disclosure agreements.
But Google has assured the public that it also plans to address the local housing crisis that it helped to create by investing $1bn in the development of 20,000 new homes in the Bay Area – 5,000 of them in San Jose alone. The vast majority of this investment – $750m – will be used to “repurpose” Google’s land to develop homes for “all income levels”. The rest of the money will be used to incentivize developers to build affordable housing.
While the company has projected this as a solution to San Jose’s chronic housing crisis, skeptics maintain that the effects may be just as troubling – if not more so – than the problem it seeks to fix. If Google is unwilling to take a sizable loss on the $750m “investment”, the majority of new housing will probably go to new Google employees and contractors, including many blue-collar service workers. As it has on other campuses, the company will build restaurants, gyms, stores and recreational areas for these workers. Google’s new San Jose campus will, in effect, be a next-generation company town.
As municipalities across the US, like San Jose, use tax breaks to lure Google into their cities, they might consider the history of company towns in a previous moment of high industrialism. One of the most notorious examples was Pullman, Illinois. In response to the social and economic ills of the first Gilded Age, George Pullman (of the Pullman Company) announced a plan not dissimilar to Google’s. He built housing and retail establishments for workers alongside his new factory. Pullman, like Google, intended his town to provide a solution to the ills that accompanied industrial dislocation – including economic inequality and the ubiquity of slums. Workers, he reasoned, would be happier and more productive with shorter commutes, shiny living facilities and bucolic surroundings.
But what followed in the town of Pullman was a kind of “well-wishing feudalism”. The town’s rules did not reflect the collective will of its residents but instead replicated the draconian will, aesthetic and ideologies of Pullman himself. Attempts at unionizing were reported and punished. Residents were subject to random home inspections and evicted without notice. While wages were cut during economic depression, rents remained steady. And no one could vote to change the rules.
Google will certainly not seek to incorporate its campuses as official municipalities, as Pullman did. But we should nonetheless be wary of the company-town ethos guiding Google’s national expansion. For many workers on San Jose’s new Google campus, the tech firm will be their employer andlandlord – and also the creator, owner and disseminator of their data. In almost all aspects of their everyday lives, residents will endure the private regulation of executives and shareholders rather than democratic regulation aimed at the public good. Google, as corporate monarch, may hold power over its worker-residents in unimaginable ways.
Still, another – less authoritarian – outcome may still be possible. Rather than allowing Google to unreservedly “invest” in private land and residences, the government could require Google to pay appropriate state and local taxes and thereby contribute to the open, public process of building desirable communities. Through the aggressive regulatory intervention of officials elected to represent them, citizens could maintain some semblance of democratic control over their physical spaces, and maybe even their digital ones.
But if secretive tax breaks and land grabs continue, Google’s physical growth across the US may bring on a “well-wishing feudalism” for this new Gilded Age – exacerbating, rather than ameliorating, the inequalities that plague Silicon Valley.
- Veena Dubal is an associate professor of law at the University of California, Hastings