Oaktopia
On Oakland’s Opportunity to Create a Better Tech Ecosystem
Today, Oakland sits at the dawn of a critical moment in its history. The SF housing crisis is bringing a rapid influx of energy — capital, people, companies — into Oakland. With housing supply inadequate to meet demand, Oakland has seen market rents rise substantially without a proportional increase in local wages. The market now squeezes longtime residents, and yet it is these very folks who gave Oakland its attractive “secret sauce.” This incoming energy need not displace nor destroy all assemblages in its path. Instead, this energy can be the engine Oakland uses to become the inclusive, representative, and community driven tech scene that unholy housing prices have made all but impossible elsewhere. But our window is shrinking. Population trends and historical baggage threaten our ability to bring all Oaklanders into a fold of tech enabled prosperity.
Population Trends + Historical Baggage = Affordability Crisis
Oakland’s daunting affordability crisis holds in peril the promise of equitable uplift. Thanks to the Urban Strategies Council and PolicyLink, we know that the median household income of white families between 2008 and 2012 stood near $81,159 while the income for black households fell from 43k to $35,050 (simple math: that’s more than twice the earning power, folks)
These numbers in and of themselves are problematic, but the rate at which rental costs skyrocket is, tragically, even more disturbing. Given the increased demand for anemic housing supply, the median rent price in Oakland is almost $2600 while the median home price is just north of half a million dollars.
The reality for black families earning the median wage in Oakland is untenable, with families paying 89% of their income in housing.
Black folks in Oakland can’t afford the median rent here
While Black folks can’t afford Oakland, folks who happen to be Black in Tech can. The median income for a tech worker in the East Bay is a shade over $100k (nontechnical and technical dataset).
This means that black folks take home ~35% of the median tech salary, and tech workers take home more than the current Oakland population across the racial board.
Aside from earnings, another edge of this current crisis stems from the housing devastation of our last economic downturn. Large banks dealt subprime mortgages to folks of color at disproportionate rates. These predatory lending practices lead to massive foreclosures and community upheaval when the housing bubble burst. With entire neighborhoods up for sale on the cheap, well-capped investors gobbled up land.
To drive home the point, below you can see a small sampling from East Oakland.The Red circles are foreclosures — local people losing their homes — and the yellow dots mark speculator activity — investors accumulating housing product.
Here we see a massive wealth stripping that has exacerbated wealth inequality, deprived communities of color of their nest eggs, and created conditions ideal for displacement. And displacement we have wrought, with Oakland’s Black community shrinking from nearly 40% of the population in 2000 to less than a quarter in 2015.
Poor earnings + expensive housing = displacement
Local earnings and housing costs are locked in a cruel race with the soul of a city at stake. Tech coming to Oakland will accelerate rising housing costs if current conditions don’t change, but it can also hasten an increase in local earnings. Tech-specific training and employment will help raise local wages to levels that can afford median housing costs. Folks like Hack the Hood, The Hidden Genius Project, Telegraph Academy, Floodgate Academy, Qeyno Labs, OTX West, ODALC, The Stride Center, Oakland PIC, #YesWeCode, Merritt Cybersecurity Program, CODE2040, The Level Playing Field Institute, and Black Girls Code have been doing amazing work to this end. Incoming tech companies would do well be the city and their bottom line to hire from these talent pools and contribute to these organizations.
Oakland has hope yet for realizing an unprecedented Renaissance. Let’s not lose it.
