California Today: A Tech Company Wades Into Housing Politics
The tech industry has become the go-to scapegoat for the Bay Area’s run-up in rent and home prices. Now, as the housing crisis escalates into a driving issue in the 2018 elections, some companies are dipping their toes into state politics.
Today, Stripe, the six-year-old online payments company that has been valued at $9 billion by private investors, is expected to announce a $1 million donation to California Yimby, a housing advocacy organization that was a driving force behind a recently killed bill that would have required local governments to accept higher-density buildings near rail stops.
“The housing crisis is one of the top issues facing California as an economy and Californians as people,” Patrick Collison, Stripe’s chief executive, said in an interview.
Given the wealth of the tech industry and the fact that California political campaigns can cost tens of millions of dollars, the donation is relatively small. But it could be transformative for California Yimby, which is barely six months old and has five full-time employees.
The money also suggests that tech companies are starting to wade more deeply into California’s fraught housing politics. While tech companies have proposed building housing and their founders and associated foundations have put money into political campaigns, they have for the most part avoided taking positions with corporate money. Stripe’s donation to California Yimby is the company’s first political donation of any kind.
“This may well be the beginning of tech firms deciding that they need to help solve this crisis,” said Brian Hanlon, California Yimby’s founder. “They don’t have a viable business model in California if the housing crisis continues unabated.”
Stripe’s donation could end up being controversial. The so-called Yimby movement — whose platform is to cut back zoning and other regulations so that housing is easier to build — has been criticized by tenants’ groups for its connections to the tech industry and accused of being insufficiently worried about the concerns of poorer renters. Nevertheless, there is little debate among economists that California’s crisis will persist until housing is more plentiful.
“We can sit back and sort of watch this unfold around us and abstain from taking any action or stance because we think that there might be some blowback that might be unpleasant for us,” Mr. Collison said. “But given just how severe the issue is, I really think that would be mistaken.”