As the digital revolution broadens and deepens, tech has
emerged as a mighty force creating jobs and giving cities an economic and
cultural jolt. However, the boom comes at a price. For lower-income people and
the squeezed middle class, soaring rents and home prices are pushing some
cities out of reach, turning them into playgrounds for the privileged.
Data suggests rents in the top 10 largest U.S. metropolitan
areas, where Internet and computer occupations play the biggest role in the
local economy, almost 40% faster than the gain in other metro areas.
Since the recession ended five years ago, New York has added
more tech jobs than any city except San Francisco, and Brooklyn has emerged as
a tech hub in its own right, with hundreds of young code writers and content
producers lining up at food trucks for lunch. Even New Orleans is riding the
wave. Tech jobs there rose by almost a third from 2007 to 2012.
From suburbs to
cities
The trend marks a major turnaround from the early days of
information technology, when growth was centered in sprawling suburban office
parks in places such as Silicon Valley and Route 128 outside Boston. In the
past five years, San Francisco's rate of tech job creation has far outstripped
Silicon Valley's, and the pattern is repeated in Seattle, New York and
elsewhere.
These days, even companies firmly rooted in the suburbs,
such as Google, Apple and Microsoft, offer free daily bus or van commutes to
employees who crave city life. In addition, many companies based in the suburbs
have expanded their city offices to attract the young.
There is no single definition of what makes a city a tech
center. The Milken Institute defines tech hubs as metropolitan areas that are
centers of research and innovation, and have high concentrations of skilled
tech professionals, entrepreneurs and venture capital.
What all researchers agree on, though, is the biggest
economic impact is being felt in cities such as San Jose, San Francisco and
Seattle, where the tech sector is large and growing fast.
The fact that so much tech growth now is happening in cities
reflects the evolution of the Internet. The rise of social networking, online
media and digital commerce is putting a premium on design and creativity,
making workers at Internet companies more like the artists, writers and media
professionals who have always gravitated to cities. In addition, old urban
industrial spaces are better suited for Web-style collaborative work than tech's
traditional cube farms.
The face of urban
landscape is transformed
As well-heeled tech workers flock in, local economies are
revitalized and the face of the urban landscape is transformed. Those
employees spend their paychecks on everything from designer hoodies to restaurant
dinners. Apartments are built to house them and the taxes they and their
employers pay help balance municipal budgets, fund redevelopment projects and
pay for a range of amenities.
As techie ranks swell and the overall economy expands at a
faster pace, demand for shelter heats up. That leaves more and more people
priced out of the housing market.
San Francisco is the extreme case. Tech jobs there have
skyrocketed 56% in the past five years, more than any other large city in the
nation. The unemployment rate is down to 4.4%. Meanwhile, housing prices are
rising at a 20% rate and the average rent in 2013 was $3,396 per month, the
highest of any city in the country, according to a study by the Boston
Consulting Group.
City officials say they are keenly aware of the danger that
San Francisco will become a monochrome city of people who can afford high
housing costs. They stress that surging tax revenue is helping the city fund
affordable housing programs to preserve diversity.
Analysts argue that low- and middle-income people are better
off when tech boosts overall growth. They may no longer be able to live in
Manhattan, San Francisco or Seattle, but it may be easier to find decent,
higher-paying jobs.
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