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SF's relationship with tech is broken. Can this city leader fix it?

Supervisor Matt Haney, whose corporate constituents are worth over half a trillion dollars, wants to know how San Francisco can better support startups while also benefiting the city's diverse population.

Supervisor Matt Haney sits in a cafe.

San Francisco District 6 Supervisor Matt Haney wants the city to remain a tech hub, but not at the cost of its residents.

Photo: Megan Rose Dickey/Protocol

San Francisco's image as a haven for tech is tarnished. Some companies say they're leaving the city for places such as Austin, Portland and Miami. City supervisor Matt Haney is determined to convince the tech industry that San Francisco can still be its home.

Haney's district, which includes the Tenderloin, South of Market and Mission Bay neighborhoods, epitomizes San Francisco's wealth inequality. The district is home to Twitter, Square, Salesforce, Dropbox, Twilio and Uber — Haney's corporate constituents are worth over half a trillion dollars — and simultaneously has the highest population of unsheltered people in the city.

Next month, Haney, one of San Francisco's 11 supervisors, is holding a hearing on the state of technology and startups in San Francisco. His goal is to convene the city's Office of Economic Workforce Development, Office of Small Business and tech industry representatives to determine how the city can better support startups, while also ensuring the tech industry provides access to opportunities for residents of the city.

San Francisco and the tech industry have a rich, yet sometimes shaky history — one where they have been allies at times but frenemies at others. In 2011, mayoral candidate Ed Lee had the support of tech titans such as then-Google executive Marissa Mayer, Twitter co-founder Biz Stone, Ron Conway and Sean Parker for his campaign. That same year, the city agreed to give a 1.5% payroll tax break to companies that moved to certain buildings in the economically distressed Mid-Market area. The results, however, were mixed.

Since then, the city has not been quite as friendly to tech. In 2013, protestors blocked and vandalized a Google shuttle transporting workers from San Francisco to its Mountain View tech campus. In 2016, San Francisco implemented legislation that required Airbnb to verify that its hosts registered with the city. Airbnb sued the city over the legislation, but the two parties settled the suit in 2017. In 2018, Supervisor Aaron Peskin and other legislators went to bat against electric scooter companies when their vehicles inadvertently littered the public sidewalks. In 2020, San Francisco voters approved an executive tax, introduced by Haney, on wealthy CEOs, and the city's board of supervisors condemned the naming of San Francisco General Hospital, the city's only public hospital, after Facebook CEO Mark Zuckerberg.

Meanwhile, tech leaders and workers have also criticized the city over the prevalence of those experiencing homelessness, mental health issues and substance abuse disorders. San Francisco's District 6, which Haney represents, is at the heart of many of these conversations.

"It's just a reality that there are a lot of tech companies that are a few blocks from where we're sitting now," Haney told Protocol. "And it has had very little positive impact on people who live here in this neighborhood. That's something that I think we have a responsibility to change."

In 2019, 3,656 people experienced homelessness in District 6, according to the city's point-in-time count. That represented about 45% of all unhoused people in San Francisco. That vast wealth disparity represents a missed opportunity for the tech industry and the city to create equal access to opportunities, Haney told Protocol.

"When we invested in these companies to grow here, we had the idea that it was going to lift everybody up in some sort of way," Haney said. "That it was going to help to solve some of the social problems and inequities and the stratification of our city by race and neighborhood. So what we need to address directly is where we've been successful in that and where we have not."

Mending a broken relationship

While the tech industry has not evenly lifted up the city in the way legislators once hoped, Haney thinks it's still possible for San Francisco to have it all, and be a thriving tech ecosystem that doesn't exacerbate the inequities in the city. But now he's working against the narrative that San Francisco hates the tech industry, he said.

"Whenever I see that, I am sort of taken aback, in part, because that's not how I feel," Haney said. "I actually feel that tech and the broader innovation economy and startups is a very good thing for the city. And that it's now part of our DNA. It is here because of San Francisco values and is not here in conflict with San Francisco values."

While Haney disagrees with some people's narrative that San Francisco hates tech, the city is paddling upstream against it. That's partly because city officials and departments don't always respond to concerns of the tech community with solutions and offers to help, he said.

He hopes the upcoming hearing will provide an open forum for tech leaders, residents and legislators to air their concerns and grievances. Ideally, there would be more open lines of communication between the city and the tech industry that would result in a clear plan that supports tech companies, and the city and its residents. While Haney wants tech companies to continue to start and grow in the city, he says there needs to be a "much more honest and full partnership" between the private companies and the city — one where the city has a clear plan to support startups while expanding access and opportunity within the tech industry.

"Those things can go hand-in-hand, in my view," he said.

Haney envisions teaming up with tech companies to create new jobs and a pipeline of local talent. In doing so, there would be more opportunities for generational wealth among Black, Latinx and transgender people, "who have been historically excluded and currently excluded."

That's not to say there haven't been any such initiatives, but "the city hasn't adequately prioritized" them, Haney said.

"We have incredible, brilliant people here in the city, and we have to build that pipeline through City College, through SF State, through the school district and then with the explicit support of the companies that are here," he said. "There's not a lot of directing ramps for [SF graduates] into this industry. [Tech is] still an industry that is very often focused towards bringing in talent from elite schools elsewhere, and I think that has real consequences for who has access to the industry, and diversity in the industry."

Haney also believes the city can be more intentional around helping tech companies set and achieve collective local hiring goals.

"I would imagine that some of the tech companies would come together voluntarily, especially if the city was willing to help figure out how to do it," Haney said. "They would need help with articulating a pipeline and where they would hire and from what sources and making sure folks were effectively trained."

Another option, Haney said, could be to offer tax breaks and other incentives to tech companies that hire local residents or from demographics that are underrepresented in tech, such as Black and Latinx people.

Haney says the city could also do more to support entrepreneurs who want to start tech businesses in San Francisco. If someone wants to start a restaurant, for example, they can go to the Office of Small Business for support and resources.

"But there's nothing similar for tech-based businesses in San Francisco, which is supposed to be the capital of these businesses," Haney said. "Most of them have to do it alone, and they don't have any explicit support from their city."

Startups, of course, do have many private resources available to them, but Haney thinks it's important for tech entrepreneurs to also have the support of their city.

The threat of Miami

Tech figures such as startup investors Keith Rabois and Peter Thiel have relocated to Miami, pegging it as an alternative to San Francisco for tech. There's also the threat of companies going all-remote, such as Coinbase, Twitter and Square, and what effect that will have on the city.

The majority of people who left San Francisco amid the pandemic relocated to other places within the Bay Area, despite all the rhetoric about tech folks packing up and heading to Miami, according to a San Francisco Chronicle analysis.

Even though most people did not leave San Francisco for other cities such as Miami or Austin, Haney worries that the exodus numbers could grow if the city doesn't double down on supporting tech.

"What I don't want is for that to be happening because they feel like San Francisco doesn't want them here," he said. "If there are people who are leaving for that reason, I do think we need to be more vocal and focus more on the support we can provide."

San Francisco still has a lot to offer tech companies and people who work in tech, Haney said, but that the city shouldn't take that for granted and rest on its laurels.

"We are in competition with other cities," he said. "And, in some ways, we shouldn't just allow folks to leave who have brought tremendous economic growth and jobs to our city. I don't think that's a good thing."

Haney wants the next generation of innovation and technological growth to happen in San Francisco. What might get in the way of that, however, is an overconfidence from city officials who think all of tech's "opportunities are going to come to us and stay here, no matter what, because we're just somehow fundamentally better," Haney said.

But cities such as Atlanta, Austin, Miami and others want what San Francisco has, he said — and they're ready to fight for it.

"San Francisco, when it comes to tech, is the team that has won the last nine championships, and it feels to people we're trying to dial it in on the tenth. And we might get knocked down in the first round if we keep acting like this," he said. "And we have to get that drive back, that hunger back, and we have to perform and show up."

Haney is inviting people to reach out to him ahead of the hearing, at which he plans to lay out some data on the rate and growth of startups and employment across various sectors, as well as potential action items that work in tandem with the city's post-COVID economic recovery plan.

"I'm going to be clear with our city departments that I want them to support these businesses and I want them to have a plan on how to work with them to make their growth more inclusive," he said. "And I don't think they do right now. I think it's an afterthought. So to the extent that there are people who say that San Francisco is not doing enough to support and make it clear they support startups or the tech sector, I think there's some truth to that."

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