Hours before the polls opened in San Francisco on Tuesday, the top of the Salesforce Tower glittered blue with the words “Vote for Tomorrow” scrolling around its tip like a news ticker. The phrase was both heartening and frictionless, like a slick campaign slogan or nebulous company motto. It served as a civic and corporate tagline from the city’s largest employer, and from the CEO who became the unlikely figurehead of a successful campaign to raise taxes on his own company.
On Election Day 60 percent of San Francisco voters cast their ballots to approve Proposition C, a measure to generate about $300 million annually to fight homelessness in the city, including funding for affordable housing, shelter beds, and mental health services for vulnerable residents. The money is set to come via an increase to the gross receipts tax on hundreds of San Francisco’s largest businesses, many in the tech sector. In a midterm season in which many local campaigns have drawn national attention due to outsize personalities, the Bay Area’s biggest debate centered on two names that weren’t even on the ballot. Salesforce CEO Marc Benioff became an ardent supporter of Prop C, pouring millions of dollars into its campaign and what felt like just as many aggressive tweets against the measure’s naysayers. But many of the city’s other tech elites, most notably Twitter and Square CEO Jack Dorsey, were vocally against the tax increase.
An ongoing legal battle over whether tax increases in California require a two-thirds or simple majority vote means that the Prop C funds may not reach the homeless population until months or years of courtroom wrangling concludes. But even with the fate of the measure in question, the fight has scrambled long-held notions about what tech companies owe to the communities where they reside and the role they should play in shaping local politics. “Business is the greatest platform for change,” Benioff tweeted repeatedly Tuesday. Now he’s staked out a moral high ground atop his shiny new tower and dared his counterparts to join him.
Benioff is a fourth-generation San Francisco native whose national profile has only recently caught up to his local fame. Salesforce, the cloud-based software company he founded, has been a part of the city’s fabric since it opened in a one-bedroom apartment in the Telegraph Hill neighborhood in 1999. It was during the dot-com boom that San Francisco got its first taste of the negative side effects of a thriving tech industry. “We heard a lot of similar [complaints] of, ‘Oh, these rich tech companies and their employees are coming and driving up housing prices and making it more crowded and displacing poor people,’” says Margaret O’Mara, a history professor at the University of Washington.
The tech run-up this decade, though, has attracted companies with far more workers and influence than the scrappy Y2K startups. Former San Francisco mayor Ed Lee made attracting tech talent a top priority during his time in office, spearheading a payroll tax exemption for Twitter and other firms that moved into the city’s Mid-Market and Tenderloin districts. The initiative sacrificed more than $50 million in tax revenue in exchange for corporate community benefits programs that cost those companies significantly less. But it achieved Lee’s goal of turning undeveloped parts of the city into bustling tech hubs. The explosion of tech workers, coupled with little in the way of coordinated housing development, has led to 8.2 jobs created for every new home built in San Francisco since 2010. The few homes available in the city are increasingly for the affluent; the city’s median housing price has nearly doubled in the last five years, and rents have increased by 40 percent over a similar time frame.
There is an ongoing backlash over the special deal tech has been cut over a decade, and I think consumers may be looking for these companies to take a degree of real-world responsibility offline.Mark Muro, senior fellow of the Metropolitan Policy Program at the Brookings Institution
San Francisco’s homelessness problem has evolved on a separate but related track. There were about 7,500 homeless people in the city in 2017, according to the last one-night count that the city conducted. That’s down from more than 8,600 in 2004, when San Francisco’s budget for addressing homelessness was about half of what it is now. But the issue has metastasized in the public consciousness because rapid real estate development has pushed more workers into areas where homeless people used to reside outside the public eye, and escalating opioid use has led to a sanitation crisis with needles and feces riddling neighborhood streets. In a city of boundless affluence, homeless people have nowhere to go. “If you’re here in the Bay Area, it’s impossible to ignore the housing crisis, from homelessness on up,” says Catherine Bracy, cofounder and executive director of TechEquity Collaborative, a nonprofit that helps local tech workers advocate for a more equitable economy. “At this point if you’re not having a conversation about it, you’re not paying attention.”
In July, a coalition of advocacy groups for homeless people gathered enough signatures to get Prop C on the November ballot. But it wasn’t until early October that Benioff became a sudden and vocal supporter of the initiative, thrusting it onto the national stage. “Proposition C is a referendum on the role of business in our communities and, by extension, our country. The business of business is no longer merely business,” he wrote in The New York Times. “The numbers that we’re talking about for these actual tax amounts … it’s immaterial to us,” he told CNN. “If we’re not for the homeless, then who are we for?” he asked BuzzFeed.
Benioff’s motivations seem to be a mix of altruism, pragmatism, and political expediency. He and his wife, Lynne, have donated more than $10 million to efforts to aid homeless families in recent years. He sees the homelessness problem as a threat to business (and specifically, his annual megaconference Dreamforce) if it makes people wary of visiting or living in San Francisco. And he’s aware that the backlash against tech that’s been incubating in San Francisco since the Google bus protests has now gone national. A billionaire with an ego-boosting skyscraper towering over an unaffordable city could flip from “big-hearted philanthropist” to “comic book villain” with one out-of-touch move. “There is an ongoing backlash over the special deal tech has been cut over a decade, and I think consumers may be looking for these companies to take a degree of real-world responsibility offline,” says Mark Muro, a senior fellow of the Metropolitan Policy Program at the Brookings Institution. “It may be shrewd positioning for a major brand.”
So Benioff adopted the tone of a stumping politician, arguing that Prop C was a vote either for or against homeless people. His plainspoken style and billionaire credentials undercut the only-adult-in-the-room posture that business executives often adopt when opposing new taxes on the basis of fiscal responsibility. It proved an especially effective rhetorical mode on Twitter. When Dorsey tweeted his opposition to Prop C, Benioff asked him how much he’d given in the past to fight homelessness. (Dorsey called the question “distracting.”) When Zynga founder Mark Pincus called Prop C the “dumbest, least thought out prop ever,” Benioff basically called him selfish and clueless:
The CEO backed up his online barbs by pouring $1 million of his own money as well as more than $4 million from Salesforce into the Yes on C campaign. “He’s been a big advocate for solving the homeless crisis for a long time, but it is rare to see tech leaders take the kind of stand that he did on local issues,” Bracy says. “We are very pleased to see that now tech leaders understand their responsibility in their own backyard and are starting to step up and do something about it.”
Meanwhile, a group of executives and tech companies including Dorsey, Lyft, and Stripe donated more than $1 million to the No on C campaign. Stripe, a payments company, even issued its own op-ed on why the effort doesn’t make sense. This contingent pointed out that because of San Francisco’s byzantine tax code, Prop C would require financial tech companies like Stripe and Square to pay more than an actual tech giant like Salesforce.
But Prop C also had some less typical detractors. San Francisco Mayor London Breed, who was elected just a month before Prop C landed on the ballot, campaigned on a plan to fight homelessness. Yet she opposed the measure, arguing that such a large increase in the city budget must come with more accountability for how the money is spent, and that enacting Prop C could inadvertently attract more homeless people from surrounding areas to San Francisco seeking services. (Before Benioff was gung ho on Prop C, he made a similar argument.) The San Francisco Chronicle’s editorial board was also against the deal, noting that it doesn’t include funding for enforcement against street tents and aggressive panhandling. To this group, the logistical issues posed by the measure outweighed any stated benefits. “We need better metrics, we need better data tracking, we need better accountability of the funds we’re already spending,” says Jess Montejano, the spokesperson for the No on C campaign. “Doubling our budget overnight with no new reforms or new accountability is a concerning approach.”
The concerns from the anti-tax crowd are similar to those voiced in Seattle, where a per-employee tax to address affordable housing and homelessness was passed and then quickly rescinded by a liberal city council. Amazon played a role in killing that tax, pausing construction on a new building and pouring money into a referendum campaign that helped turn voters against the measure.
This was a hot topic 110 years ago, when it was the question of whether there should be a federal income tax. ... These are old questions that are just now being revived in our new high-tech era.Margaret O’Mara, University of Washington history professor
In working so fervently to raise tax money for a local government, Benioff has staked out a different political position than Amazon CEO Jeff Bezos, who seems to think he’s better equipped to tackle the homelessness problem than Seattle’s mayor or city council. Amazon is building a permanent homeless shelter in its new downtown office, and, after the blowback from the head tax defeat, Bezos announced a new $2 billion charitable fund that will aid homeless families as part of its mandate.
It’s both heartening that these men are focusing more of their efforts on tackling problems in their communities and alarming that the welfare of entire cities can be dictated by their whims. But this phenomenon is not new in the long arc of American capitalism. “This was a hot topic 110 years ago, when it was the question of whether there should be a federal income tax,” O’Mara says. “Should these megabillionaires like Carnegie and Rockefeller be taxed, and government have the revenue to do social policy and alleviate poverty? Or should you let Andrew Carnegie build his library and John Rockefeller create a foundation that could in turn alleviate poverty? These are old questions that are just now being revived in our new high-tech era.”
The Prop C funds will have to make it through the courts before they can make it to San Francisco streets. California law dictates that local ballot measures raising taxes require a two-thirds majority to pass; however, a state Supreme Court ruling last year lowered the threshold to a simple majority for propositions launched by citizens, as Prop C was. But that decision is now under legal review, and the city is unlikely to start spending any of the voter-approved funds until the courts have given a definitive green light. Opponents of the measure say this means the entire exercise was a waste of time. “The Yes on C campaign failed to earn the two-thirds voter support necessary for San Francisco to ever see a penny that Proposition C promised,” Montejano said in a statement after the vote. “From day one, both sides knew that two-thirds voter support was necessary because of pending litigation from this year’s June primary election. The Yes on C campaign’s last-minute, multimillion-dollar investments failed to effectively move the needle because voters were clearly divided.”
If Prop C doesn’t lead to more money to fight homelessness, the onus will swing back toward the mayor and tech companies that sided with her to develop a solution. In goading the tech community to take such a public stand on the homelessness problem, Benioff has forced his peers to take ownership of it. “There’s certainly a trendline where more people are going to have to be like Marc Benioff and be very outspoken and be there taking a stand on these issues,” O’Mara says. “So if you’re going to be against it, you have to have something else in your back pocket that you’re ready to put on the table. It’s clearly a crisis that needs addressing, and it’s not going to go away by itself. It’s going to require a broad-based civic action in some way.”
Though Benioff celebrated Prop C’s victory—on Twitter, obviously—he also vowed to keep using his boundless financial resources in the forthcoming legal battle. “Business is the greatest platform for change” might be too long a sentence to slap atop the Salesforce Tower, but there’s a shorter phrase that gets across the same message: “Money talks.”
