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How Mayor Ed Lee remade San Francisco in Big Tech’s image

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Lee’s focus on tech jobs exacerbated an ongoing housing crisis 

Visitors Pay Respects At AIDS Memorial On World AIDS Day Photo by Justin Sullivan / Getty Images

Yesterday was the rare San Francisco day when you couldn't find anyone with a gripe against the city’s top politician, Mayor Ed Lee. Lee's tenure ended, abruptly, at 1:11 in the morning of December 12th when he was pronounced dead at Zuckerberg San Francisco General Hospital after suffering a heart attack at a supermarket while shopping with his wife. The affable 65-year-old was midway through his third mayoral term after being initially installed by the Board of Supervisors as a “caretaker” mayor based upon his explicit pledge that he would not run again. But run Ed did. Multiple times.

In 2009, not quite two years before Lee took office, political consultant Jim Ross announced that, for the first time, "jobs" was the number one concern of San Francisco residents. Lee, upon becoming mayor, decided to take on this problem.

And, boy, did he ever. Under his leadership, some 140,000 jobs were created in San Francisco over six-odd years. "Politicians have a tendency to take on the obvious problems,” Ross says. “Jobs came up No. 1, and the mayor said he'd fix it. He did!”

In doing so, however, new problems were created, and Lee’s chosen methods were also problematic. His signature efforts were corporate tax breaks. The so-called “Twitter tax break" of 2012 came in response to the nascent company's threat to bolt town, and it was seen by many as a municipal capitulation to corporate blackmail. (Within hours of Lee’s passing, Twitter CEO Jack Dorsey tweeted a wordless photo of San Francisco’s City Hall with its flags at half-mast. His next tweet noted that the company is "Launching tweetstorms/threads today! Thank you to everyone who helped create and refine this format on Twitter" followed by a praying hands emoji.)

The Twitter tax break was the first in a series of sweet deals that the self-anointed "tech mayor" would offer to corporations. "Ed will be remembered for failing to regulate Uber and Lyft and Airbnb," says a longtime City Hall power player. "Mayors lead based on not only what they choose to do, but what they choose to let alone."

Lee chose to let Uber, one of the world's most amoral companies, largely do as it pleased in San Francisco. He allowed Airbnb years of free rein, even as it cannibalized affordable housing stock in a city facing an acute shortage of affordable housing. In fact, in 2012, he went so far as to tell city treasurer José Cisneros — in writing — to not collect back taxes owed by Airbnb until a working group could offer input. Cisneros, who is independently elected, refused to comply with Lee's mandate, which would have constituted an abdication of his legal obligations.

Even as recently as this month, city legislators said privately that they did not have confidence in the mayor's office to fairly and impartially negotiate deals with this city's ascendent tech companies. It’s little wonder: under Lee there was an uncomfortable degree of overlap between the city's tech elites and city government.

To wit: in April 2015, a gathering of the city's movers and shakers was summoned by Lee's reelection campaign to a downtown law firm for what they assumed was a standard pitch for political dollars. Instead, they found themselves being faced down by a Lee, his chief of staff, his top adviser, and Ron Conway, "the godfather of Silicon Valley" and Lee's preferred financier.

The crowd was told that their financial activity would be given "close attention," and those donating to a candidate for city supervisor running against a Lee appointee could face repercussions when trying to get deals done or buildings built in this city. "I was being threatened," summed up one attendee. Conway then purportedly told the crowd that he'd donate to their pet causes if they donated to Lee's preferred candidate, an odd quid pro quo, which would obscure Conway's fingerprints.

Meanwhile, the city was undergoing a radical transformation: the median cost of a home in San Francisco is now a jaw-dropping $1.5 million, up nearly $1 million from 2011 when Lee assumed office. Rent of $3,500 a month is now unremarkable. Many of the folks who filled those 140,000 jobs moved to the city to take them — and, between 2011 and 2015, the city only added 10,013 housing units.

With the wisdom of hindsight, Ross says, perhaps the scores of millions of dollars gifted to tech companies in the pursuit of job creation would have been better directed toward affordable housing. Instead, the burgeoning imbalance of jobs and housing exacerbated an already precarious situation and created a windfall for landlords and property owners — people who already were doing decently.

"If you were among the 40 percent of San Franciscans who owned a home," Ross continued, "Lee's success was life-changing."

It was for the have-nots, too, but not in the same way: many have found themselves economically banished from San Francisco. At the dawn of Lee's tenure, nobody foresaw the explosion of tech industry job growth in this city and region at its present level. As such, the Lee administration's gift bag for tech outfits — an industry that was poised for takeoff, regardless — led to unforeseen consequences. The avuncular Lee found himself portrayed by the city's left as the smiling avatar of the tech- and business-friendly policies that have driven San Francisco's inequality levels to be on par with those in Rwanda.

"Ed could have worked more robustly to address the runaway inequality in San Francisco," says former city supervisor John Avalos, a critic of Lee's from the left who ran against him for mayor in 2011. "The way he supported tech and the private sector was an effort that got out of hand. It was like The Sorcerer's Apprentice."

This was all part of Ed Lee's San Francisco. His policies made many people angry. But right now people aren't angry; they’re sad.

On Tuesday morning, with thousands of politicos, bureaucrats, and other onlookers packing every last square inch of San Francisco's glorious City Hall, speaker after somber speaker lauded Lee's good character and kindliness and passion for helping people. Lee was a politician who was personally liked by many, even as his job performance numbers tanked.

"I feel deep sorrow for Ed Lee," says Avalos. "He sacrificed a lot. I didn't agree with most of what he thought or did, but he committed so much time and attention to detail to [doing] what he thought was right."

Joe Eskenazi writes a weekly column for Mission Local. He previously worked for SF Weekly and San Francisco Magazine.