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They wanted affordable & livable housing. They got company towns

Fed up with constraints around a lack of enough housing inventory around their sprawling offices that could alleviate pressure on housing prices, the narrative goes, some of the biggest tech companies have decided to bring back one old idea from the early-industrialization times of good-ol’ paternalism: building their own gilded age-style company towns.

Alphabet, Meta, Tesla and the entertainment conglomerate Disney either have plans to build their company towns or have already begun building them, though this time, they have decided to avoid big technological promises to achieve digital Nirvana and have settled with some of the most popular ideas around urbanism to realistically achieve more affordable communities that blend walkable and cyclable features with greenery, mixed-use, and high-quality standards.

Illustration by California Forever, the project backed by Silicon Valley investors to develop rural northeastern Solano County, adjacent to the San Francisco Bay Area

Not long ago, Google tried to create high-tech urbanism by creating a hyper-connected neighborhood in Toronto through its former subsidiary Sidewalk Labs after finding local opposition arguing that the smart-city plan to improve infrastructure and services through technology was a euphemism to create data pools used to maximize revenues and not civic life or quality of life.

One thing seems clear: wary of the opposition found by Google’s Sidewalk Labs in the waterfront area of Toronto and the use of mass surveillance to control the population in China, this time, no tech company is explaining their housing plans as techno-utopias.

Tech companies are wary of a backlash on “smart cities”

The concept of smart cities is perceived with skepticism and even suspicion by a significant section of public opinion, and none of the announced new developments mentions it.

Mountain View, the city in Silicon Valley where Google is headquartered, approved a master plan last June where the company will develop its North Bayshore project with the help of the Australian real-estate company Lendlease.

The mostly suburban new development will replace an old office park with 7,000 homes and 3 million square feet of retail and office space on 153 acres. Google will increase its footprint in Mountain View with another development, replacing old industrial buildings with 2,000 housing units, offices, shops, and community amenities.

So far, the area’s historical opposition to vertical densification through high-rises created the constraints that turned it into one of the most expensive places in the US; however, state legislation allowing high-rises near public transport hubs and the renewed interest by Big Tech to develop some of their land could alleviate the area’s legendary imbalance between added jobs and the existing housing inventory.

Illustration by California Forever on the concept of civic participation (aka “town halls”)

Talking to people and reading articles and comments on these plans, there’s a recurrent opinion that echoes a sentiment associating the phenomenal success of such companies as drivers of prosperity in entire regions while also emerging as main culprits in unintended consequences such as worsening traffic, more expensive services, and hyper-competition for housing, driving out former inhabitants unable to compete with newcomers. Could some of the biggest contributors to an area’s lack of housing affordability picture themselves as part of the solution for the same issue they exacerbated?

Both developments won’t be only for company workers but for anybody interested and “from all income levels.” However, this aspiration will face the reality of housing prices in the San Francisco Mid-Peninsula, where “low income” has a different meaning than almost anywhere else. Ultimately, the city of Mountain View will determine who can apply by specifying the exact income thresholds of the different housing types.

The challenge of building homes people can pay

Only Palo Alto, the epicenter of Silicon Valley, separates Mountain View from Menlo Park to the north. The town is squeezed just on the other side of Stanford University between protected hills, the exclusive properties of Atherton and the formerly underdeveloped flats by the bay to the east around Meta’s headquarters.

The formerly undeveloped land around Facebook headquarters at 1 Hacker Way will become a 59-acre community with mixed-use buildings, parks, and 1,500 apartments of different shapes, orientations, and sizes, already dubbed “Zucktown” by some. The company that created virtual communities and tried to bring the metaverse to the masses is determined to approach its workers to the office by assisting with the biggest hurdle anyone moving to the area will face: renting or buying a place of one’s own.

The phenomenon of what James Rodriguez from Business Insider has called “mega-landlords,” alluding to yesteryear’s paternalism by old-school industrialists with their droves of interchangeable and alienated blue-collar workers, isn’t a phenomenon exclusive of the San Francisco Bay Area: Disney will also dedicate 80 acres of land a few miles from its park in Orlando to build 1,400 housing units, after receiving pressure to provide housing for its thousands of employers from Florida’s government, according to Reuters.

“How Green Was My Valley” (John Ford, 1941); theatrical poster

Tesla’s mega factory in Travis County near Austin is also transforming an area where housing prices and short-term rentals are driving up a housing market that risks excluding some of the demographics that famously “kept Austin weird,” as the saying goes. Elon Musk is planning a new town for the Texas staff of Tesla and SpaceX, called Snailbrook.

Would-be Gilded Age industrialists: paternalism 2.0

SpaceX launch pad in Boca Chica is also transforming the nearest town, Brownsville, a border city of 189,000 that is 95% Hispanic, which tweaked its motto to welcome the new neighbors from “On the Border, By the Sea” to “On the Border, By the Sea, and Beyond.” If Austin has been given the nickname of ATX, Brownsville would be BTX. Though more than creating a new town from scratch, Elon Musk seems more interested in securing tax rebates in exchange for the promised revenue that his companies’ activities would generate in the region.

Tesla is following the same playbook in Buffalo, New York (where it plans to build the biggest solar facility in the US) and Nevada, with a new semi-truck factory planned east of Reno. Amazon benefited from the same strategy when it announced its second headquarters in 2017, letting cities bid for it. A total of 238 cities from almost every state submitted a proposal with economic incentives. Arlington, Virginia, offered the biggest subsidies and grants to win the contract.

From “How Green Was My Valley” (John Ford, 1941)

Of all the mentioned companies, only Tesla develops housing-adjacent products through its domestic solar roofing and energy storage products, though none are planning to enter the business of building houses or solving the housing crisis at scale. According to James Rodriguez:

“While the companies will continue to own the land the homes will be built upon, they’re partnering with traditional real-estate firms in each case to build and operate the buildings. In other words, you wouldn’t cut a rent check directly to Google. And anyone who meets the criteria can apply to rent the units — not just employees.”

The tech giants promoting new towns benefited from the era of social media, now fading into a more fragmented Internet where customization algorithms and a long tail of ever-growing content that serve a-la-carte feeds in ephemeral niches that feel—argues Charlie Warzel—more and more “placeless.”

Virtual communities and real ones

TikTok’s opaque “For You” recommendation system, which X now tries to emulate to the despair of those who had signed up for another type of platform, gives users an end-of-an-era feeling with no clear replacement on sight. Social media platforms have lost part of the vibrancy and novelty that made them gain preeminence in the first place when they replaced their self-proclaimed mission of “connecting people” to solve the world’s problems with another of engagement optimization to serve contextual ads more efficiently.

After decades of technological worshiping, public opinion and institutions weigh as a cultural battle between technological accelerationists (wary of regulation and insensitive to the consequences of rapid transformation through mass-adopted AI and other advances), like Marc Andreessen and others; and those who, like researcher Cal Newport, argue that online culture reached the level of maturity to transform the current “technopoly” into a stage in which technology becomes a tool for improvement, or what he calls “techno-selectionism”: a balance between technological innovation and intentional curation.

From “How Green Was My Valley” (John Ford, 1941)

So far, the new planned cities have tried to highlight affordability and urban design best practices for increased livability (walkable design, bike paths, a food market, small businesses, mixed-use to approach schools and activities to homes). Researchers of digital media and culture—writes James Rodriguez—aren’t that convinced about the altruistic “paternalism” of these giants.

“The modern tech industry was built on a California-tinted brand of utopianism and the belief that ‘connecting people’ is the answer to many of the world’s problems, Grant Bollmer, a senior lecturer in digital media at the University of Queensland in Australia, told me. After all the digital ad dollars have been hoovered up and all the attention squeezed out of our screen-addled eyeballs, the next logical step is building a new city where the founding principles of the tech world can be put into practice.”

Digital hygienism as the new Redlining

A new proposal of development by big tech, more secretive than the plans of Google and Meta for Mountain View and Menlo Park, respectively, could take shape beyond the hills separating the East Bay from California’s interior plains along the Sacramento River watershed in the warmer, more rural and less desirable southeastern tip Solano County, were a secretive group of Silicon Valley investors bought 55,000 acres to build California Forever.

On paper, California Forever is a company founded by Jan Sramek, owned by an entity called Flannery Associates, that tries to build a new walkable city of around 50,000 people in southeastern Solano County. So far, the plan exists on a high-spirited website with drawings of gentle, European-style mid-sized towns surrounded by fields and nature. But the investment is real, explains Adam Rogers:

“(…) $800 million from a conclave of tech and tech-adjacent billionaires who for years have been secretly buying rural land in Solano County, between Travis Air Force Base and the Sacramento River. And they would’ve gotten away with it, too, if it hadn’t been for the meddling kids at the New York Times unmasking last month the venture capitalists Marc Andreessen, Chris Dixon, and Michael Moritz; philanthropist Laurene Powell Jobs; the Stripe-founding Collison brothers; and others.”

It’s not the first time that technological change and housing constraints have prompted companies to try to come up with solutions to provide housing to workers, often on terms benefiting the companies themselves: during the Industrial Revolution, coal, steel, and textile factories built near deposits of fossil fuels and river streams to help power their machinery, respectively, built also little “colonies” or “company towns,” often including churches and stores, trying to appease organized labor unions with middle-class ideals of social hygiene.

How green was my valley!

Early industrialization emplacements from Europe and North America tried to counter the evolution towards organized labor movements with a blend of positive paternalism and coercion. Capitalism needed a reformed conscience based on the ideals of philanthropy, argued most eminent industrialists. Social conditions were so dire that different blends of socialist and anarchist movements achieved massive following, forcing the reforms that allowed the emergence of better salaries and living conditions.

And—the narrative goes—, the pressure of organized labor (and fear of a “red contagion” after the Russian Revolution) assisted in achieving a de facto universal right to live in dignity in wealthy countries, especially after the American New Deal and the European reconstruction at the end of World War II through the Marshall Plan and the birth of the European Coal and Steel Community (ECSC), the germ of the European Community and European Union.

From “How Green Was My Valley” (John Ford, 1941)

From our post-postmodern, class-blind and hyperconnected wealthy societies that have enjoyed for decades generalized access to universal education, cheap products and services, and effective health care, it isn’t easy to picture the class divide and living conditions experienced by factory workers arriving at company towns at the end of the nineteenth-century and beginning of the twentieth century.

How Green Was My Valley (1941), a legendary film by John Ford based on a 1939 novel of the same name, explores the connection between housing design and social alienation in a Welsh mining village of row houses down a hill. But, unlike the grey and claustrophobic Welsh town where Richard Llewellyn inspired his book, the homes portrayed by the movie look inviting by comparison, specialists have argued over the decades.

In the South Wales coalfields, entire populations had lost touch with previous ways of life, clustering themselves in cheap housing around a store (controlled by the company all worked for) and little else to create a sense of community. Strenuous working hours, including children, wouldn’t allow for much anyway.

Finding out about company towns

The US explored its own version of company towns at the end of the nineteenth century, explains James Rodriguez:

“The company towns of the 19th and 20th centuries also bore some of that utopian flavor, at least in theory. In many cases, company towns were a practical response to the need for housing near factories or lumber mills, which were typically located in barren locations without the kinds of amenities that would keep workers happy, like churches or libraries. The Hershey Company town in Pennsylvania, founded around 1909, prioritized these kinds of community assets from the start while also offering affordable homes that workers could rent or own. At one point, 3% of the US population lived in company towns, according to The Economist.”

“But the idea of a place dominated by a single corporation — where your boss not only owns your home but also runs your church and your kids’ schools and sells you everything you need at the company store — was always a fraught proposition. In many company towns, the corporations used the setup to maintain their social control, threatening disgruntled workers with eviction from company housing if they went on strike. When your company is your entire world, the stakes are infinitely higher.”

Company towns lost their prevalence in Europe and North America as wages increased, allowing workers to finance cars and houses that didn’t need to be clustered anymore, whereas deindustrialization did the rest from the mid-twentieth century onwards.

From “How Green Was My Valley” (John Ford, 1941)

This time around is different: despite massive layoffs to shed, according to the companies themselves, excessive hiring during Covid-19 digital bonanza, tech workers remain among the best-paid and most looked-after white-collar professionals, though not even their comparative advantage guarantees their easy access to aspirational housing in areas like San Francisco, Seattle or Austin.

Worker colonies, then and now

Google and Meta insist that the walkable developments they plan will be open to everyone (reportedly, even to those seeking the dwindling benefits of subsidized Section 8 housing). California Forever would be reaching out to elected officials in Solano County to explain their plan, which they don’t want to associate with exclusivist, futuristic techno-utopias but rather with rather traditional takes of the gentle, mid-sized urbanism that define organically grown, patina-friendly mid-sized towns in Europe or the US South.

It’s still early to know what the role of the promoters of will be these new “towns.” The intentionally low-key announcements around projects that will add thousands of single-family homes, townhomes and low-rise apartments arranged around plazas, tree-lined streets and bike paths, shows their wariness around concepts such as the old company towns of the early Industrial Revolution, from nineteenth-century French mining and metallurgy villages to the worker colonies that turned Catalonia into an industrial powerhouse in Southern Europe —including the Colònia Güell not far from Barcelona, where several of the modernist buildings erected, designed by Antoni Gaudí, are now a tourist attraction.

The alienating living quarters near mass manual labor of yesteryear is a model pushed to the limits more than one century later by Chinese city factories. A case in point is the Foxconn enclaves that manufacture the overprized smartphones that keep our attention glued to some of the services provided by the same companies trying to alleviate a problem partly exacerbated by their localized hyper-success.