announcer: next on "kqed newsroom," from fruit orchards to the home of high-tech titans -- the transformation of silicon valley's citieson malone: this is the heart and soul of silicon valley. this is the epicenter of the digital revolution. shafer: welcome to "kqed newsroom." i'm scott shafer. tonight, we're going to look at how the tech boom is transforming the cities of silicon valley. in a moment, i'll talk with the mayors of mountain view, sunnyvale, cupertino and east palo alto about the big issues they're grappling with from housing to transportation. but first, monica lam shows us how the valley has grown. lam: 100 years ago santa clara valley was covered in orchards -- pears, peaches, prunes. it was called the valley of heart's delight. malone: the weather was good and it was beautiful.

you could have gone up in the hills of cupertino and looked down. there's some famous paintings made up there during that period, and you could look down the valley and it's just a sea of blossoms. lam: cupertino and its neighbors sunnyvale and mountain view would soon grow to crowd out the blossoms and replace them with very different industries. malone: extraordinary things happen here, but you don't really notice them. it's all very low key. there are no skyscrapers. but really, this is the heart and soul of silicon valley. by the 1950s this is the epicenter of the digital revolution. lam: in the mid 1950s, lockheed martin moved to sunnyvale to open a missiles-system division. mary wadden is the author of "silicon valley in pictures." she says high-tech brought early traffic jams. wadden: this photo is really interesting to me because it's rush hour in the 1960s and this is lockheed's campus. you can see all the farmland around it. and then this is just a line of cars leaving work to go home. the department of defense was the first venture capitalist of

the area. they were the ones that initially paid for all of the research and development to create this new technology, and then they were also the end customer, and that allowed for the industry to grow at such a rapid pace. lam: within a decade, sunnyvale, cupertino, and mountain view became a crossroads for innovation says historian mike malone. malone: where bernardo meets fremont meets 85 an anonymous, empty intersection full of ice plant and not much else, on a given afternoon in the late 1960s, you would have seen steve wozniak riding home from cherry chase swim club practice. you would have seen ted hoff turning in 'cause he lived right at that corner and you would have seen bob noyce racing down fremont avenue, going home in los altos. so, at that moment at that intersection you would have had the inventor of the integrated circuit, the inventor of the microprocessor, and the inventor of the personal computer all in one spot. jobs: in spite of that...

lam: in an interview with the silicon valley historical association, steve jobs recalls an early product to tap into telephone networks illegally. jobs: it was the first digital blue box in the world. it was the magic of the fact that two teenagers could build this box for $100 worth of parts and control hundreds of billions of dollars of infrastructure in the entire telephone network in the whole world. we had the sense of magic that we could sort of influence the world. lam: cupertino today is known around the world as the home of apple. mountain view is known as where google is headquartered. the growth of both corporations and communities has generated new relationships and frictions. woman: quick question. i think people who are curious should know what the city residents can benefit from this new campus. jobs: well, as you know, we're the largest taxpayer in cupertino.

so, we'd like to continue to stay here and pay taxes. that's number one. woman: okay. [ laughter ] jobs: because if we can't, then we have to go somewhere like mountain view and we take our current people with us and we give up and over years sell the land here and the largest tax base would go away. lam: the success of the high- tech sector has put pressure on the valley's housing and transportation systems. malone: in 1970, people were complaining that all the orchards were getting cut down and this place wasn't the paradise it used to be. 20 years later people were saying "this traffic's unbearable." and then housing prices. you know people were complaining when housing prices around here broke $100,000 for a suburban ranch house. lam: still the growth of silicon valley hasn't always been consistent. east palo alto is down the street from facebook's headquarters but few of its residents work there. malone: east palo alto was always an anomaly because it never really developed

the same kind of infrastructure that we saw in the rest of the towns of the south bay. it never participated in the boom.ed lam: east palo alto may be one of the last few affordable places in the valley. malone: that's changing. it has to change. first of all there's too many people trying to get into this town. all you have to do is go out on 680 in the morning and look at the traffic trying to get into silicon valley. lam: already, the median home price in east palo alto is nearly $550,000 up 16% in the last year. in sunnyvale and mountain view it's double at $1.2 million. in cupertino the median home price is $1.6 million. the valley has attracted diverse communities. east palo alto is 65% latino sunnyvale 40% asian and 18% latino and cupertino, 63% asian. malone: and i've even predicted that the face of silicon valley in 2020, 2025 is gonna be an indian woman.

i really believe that. i think that's the next great wave of c.e.o.s, is indian women. shafer: joining me now to discuss the challenges facing their cities are cupertino mayor rod sinks... jim griffith mayor of sunnyvale... lisa gauthier, mayor of east palo alto... and john mcalister mayor of mountain view. mayors good to have you with us. thanks for coming in. well, you all have different cities with some similar problems one of which is housing, whh manifests itself in different ways, but, jim tell us about your city. there's not enough housing. griffith: there isn't. there definitely isn't. sunnyvale is a city that has about 50% owner occupied 50% rental and right now, what we're seeing is we're seeing some places where the rents are going up 25% in a single year. this has the effect of driving the middle and lower class out of the city because they simply can't afford it anymore. shafer: and so, what does that mean for the quality of life there? people have to commute. griffith: absolutely. i was sitting on somebody's porch,

and they were telling me about one of their friends who lived in sunnyvale and worked at fast food restaurant. he was forced to move to tracy and as a result, he is now living in tracy, commuting to sunnyvale because there are no jobs in tracy and no housing in sunnyvale. when you change the dynamics so that somebody instead of commuting three miles, is commuting 60 miles that has a dramatic effect on transportation, for instance. shafer: and what about in cupertino? i assume it's the same thing. sinks: yeah, absolutely. we have a lot of folks coming in looking for housing. our vaunted school system is a big draw and people pay a premium to live in cupertino school districts, but the housing is certainly challenginggi and we're also experiencing these large jumps in rent. shafer: and, so, the solution to high prices is more housing. to what extent, john in, say, mountain view are you building more housing? can you possibly build enough housing? mcalister: we've just completed our general plan and part of the general plan i identified five growth areas. a lot of it was along transit -- el camino or caltrans. and so, when we're putting these developments, coming in,

we're encouraging the developers or anybody to put in high-density housing to go along with the transportation. we've seen a lot of gentrification, as they were talking about and as prices are increasing the lower-middle income have to move out. we have a 65% rental and 35% ownership, so we're seeing a big difference in there, and everybody's competing for space. we have google -- when they come in, they'll -- if a new complex comes in, they will rent out of 200, maybe they'll rent 50 units out of that, and they'll give it to their employees to help for the housing shortage which therefore makes it less supply for everybody coming in. and they also get a housing allowance, so it makes it tough to compete with them. shafer: lisa you have a different problem or different situation in east palo alto. for many years, it was the last affordable enclave, really, on the peninsula. that's really changing and give us a sense of how fast it's changing and what it means. gauthier: you know, you're correct. the way that the housing market is going now people are being priced out of the community,

and it's really unfortunate that that is happening. you have the tech industry and people that are coming in, and i can remember when my mother bought her house years ago, i think she paid $18,000 for that home. right now, homes are going for $500,000, $600,000,0 which is good for a home owner because any time your property value is increasing it's good for you, but it's really affecting the renters who are being priced out of the community. middle-income, low-income people, when you have the tech industry that's pushing and taking up the housing, we're pushing people out and we don't want to displace people. shafer: and i would imagine a lot of long-time homeowners have cashed out and left. gauthier: yes, that has been a big thing that has happened. people have looked at the fact that you can get some additional money and move to a different area. some people that have moved from east palo alto and gone to tracy and stockton and they're there, and they find that they can't come back. they wish they could come back and they can't come back. shafer: they're just priced out. gauthier: they're priced out. shafer: you know, in san francisco

there's been a lot of pressure on renters many people getting evicted because the owner wants to list it on airbnb or they want to do something to basically free it up, 'cause we have rent control in this city but what about in your cities? to what extent are renters being actually pushed out of their units? mcalister: well, just the demand. i mean, we have somebody who will put in a brand-new, class-a apartment complex, and they'll set the bar, and it's like $4,000 for a two-bedroom unit. well, you got this other apartment complex that's been around for 30 years. they don't have to do anything to improve their property, ir but they can keep jacking up the rents because the higher market's pushing it up. and so it's tough out there for those people. shafer: what about in sunnyvale? griffith: it's pretty much the same. and the other problem we're seeing is a lot of the new construction of housing is being aimed at those particular demographics, particularly corporate housing. there's 650 new units being built within 750 feet of where i live. and all of it is aimed at the higher-end corporate. that puts a lot of pressure on the city to come up with ways to encourage affordable-housing construction.

shafer: to what extent are these companies -- google, apple -- saying, "well, if you approve our expansion plans, we'll build some housing or we'll go into a partnership with a housing developer"? i think google did that, didn't they, in mountain view? mcalister: well, and part of their deal for their new development north bayshore, they said, "if you approve certain projects," yeah, they'll do that. but we can't build enough housing to take care of the demand of what's going on. and one of the solutions is we're trying to get those big companies to work on transportation issues so that by going throughout the region, housing becomes more attainable. it's not affordable. "affordable" is a misnomer now. it's either subsidized or attainable. shafer: yeah, lisa. gauthier: and for rent stabilization in east palo alto, we do have a rent-stabilization program so it helps a lot of the residents but the problem with rent- stabilization and affordability is that under the rent-stabilization plan, once somebody moves out of that unit, it's no longer -- we no longer keep it under that, and it then therefore goes to market rate. shafer: yeah.

you know sometimes this problem is described as a jobs/housing imbalance, right? but it's really just a housing shortage. but it's also this explosion of jobs. i mean, is it possible that we could get to the point where we just can't really accommodate more jobs? gauthier: i don't think that that will happen, and, you know, i must say, for facebook, i know that they've just purchased, like, a certain number of -- some land in menlo park with the idea of building homes. now, it's gonna take some time. they won't have it next year but the fact that at least they're thinking about it, and they know how they're affecting the region they know that they need to create housing. -shafer: yeah. -griffith: but there are limits. i mean, mountain view and sunnyvale are built-out cities. we don't have any vacant land available, so now all of the development that happens is densification. and there's only so much that the infrastructure can support in terms of that whether it's transit or utilities or even housing. so, what we are actually seeing now is we're seeing sort of shifting -- the single-family neighborhoods stay the same, but we see certain industrial densifying

and other portions of industrial being converted to high-density housing in order to try and achieve a better balance. shafer: you know it was interesting in that clip from steve jobs at the city council, trying to convince the cupertino city council to approve his plans for the expansion. to what extent do you feel that in some ways these companies are -- i don't want to say extorting you, but they're sort of like you know "give us what we want or else"? sinks: i think the companies are bringing substantial value to our communities. i mean, if we look at apple's contribution to our budget overall, it may be on the order of 30% or so. shafer: and that comes through what? sinks: it comes through sales tax it comes through property tax, it comes through negotiated agreements such as we did at the time, that apple campus 2 was approved. but the challenges that come with that growth particularly in transit, particularly in funding. you talked about the pressures on housing

and they create pressures on our schools. in cupertino we're a revenue-limit district in the elementary school. shafer: which means what? sinks: which means we're funded at the floor of all schools in the state, and the high school district is not much above that which we share with sunnyvale. and so these pressures to build more and more housing become issues for our residents who would like to have our schools better supported and that's a basic challenge. shafer: what do you expect from these companies inerms of housing, corporate citizenship? i mean, what do you want from them that they're not giving or are they giving -- you know, are they being good corporate citizens already? john? griffith: well, in mountain view, we have google, we have linkedin, we have intuit, microsoft all in there and what they're giving back to the community -- when you were talking earlier about ransom -- we have so many people -- so many businesses want to come to mountain view that we don't feel like it's a ransom.

it's a "you have to come to us and prove what you can do and the community benefits -- for us." and that can be helping the schools, helping the transit, helping the freeways, helping housing, wi-fi, infrastructure, all these different things. so, we're not feeling that as a deterrent for those people that come along. so, what they do as their community benefits, they are helping us in some regards. and we'll see how it goes. shafer: lisa, it's different for east palo alto. gauthier: it's different for east palo alto because we, although we're in silicon valley, we don't really benefit from the companies. growth is happening outside of east palo alto. part of that, you know we can't develop because of the lack of water. that's something that we face in our community right now. but as i look and i see all the different cities i see cranes going up and development actually happening but we're not experiencing that right now. shafer: but you are seeing the property values go up. gauthier: the property -- we are benefiting from the property values. yes, indeed. shafer: and are you seeing -- we talked about the diversity of silicon valley and all of your cities.

and palo alto, historically, was a primarily african-american city. now it's 65% latino. to what extent are you seeing that beginning to change? gauthier: that's the part of the beauty of being in east palo alto. we've always been a multicultural. we've grown to this multicultural community and that's the beauty of it, just to see all the different cultures that are coming in, and just to be able to work together, and it is changing. every day you see somebody different in the community but we celebrate that. shafer: yeah. jim, what about you? sunnyvale -- what are you getting out of these companies. griffith: well, we're a little bit different because, you know, sunnyvale is as large as the other three cities combined. we have a very diverse marketplace. we have google, apple, yahoo!, motorola, microsoft -- you name it. -shafer: lockheed. -griffith: lockheed. and we don't -- we're not as -- i don't want to say captive, but we -- shafer: you have more options. griffith: we have a lot more options. so, our focus tends to be, more than anything on transportation demand you know? if a business wants to come in

and they want to bring in 2,000 workers, our answer to them is, "great. we love it. please do it. but we don't want 2,000 more cars, so you need to come up with a way to divert 30%, 35% whatever it is of your employees to alternate means of transportation so that we can accommodate you." shafer: but is the transportation there? is the infrastructure there? griffith: no, it definitely is not. we are largely driven by the valley transportation agency in terms of public transportation and, unfortunately the way vta tends to work is they respond after the fact of demand. they don't proactively go out and develop transportation solutions in advance. shafer: so, what do these companies say when you say "you need to figure out a way to divert your employees." sinks: well, apple said, "great. we will sign up for a 34% transportation demand plan." you know, in the private sector, our companies have been booming the last few years. public sector hasn't kept up particularly on transportation so we look at plans from 1992 or the year 2000 that would have enmeshed the south bay

in a real transportation system, that would have made it an effective people mover. what did we get? we got a bunch of spokes that go to downtown san jose. nothing hitting the rim of the west valley cities, going up into the north county into mountain view and sunnyvale along the 101 and 237 corridor where a lot of jobs are. j and the private employers have taken it upon themselves because we've failed. they've taken it on themselves to have buses all over tarnation. so, now we have hundreds of companies doing this. shafer: and those busses are quite controversial here in san francisco. where you are, not so much. griffith: well, it is, and it isn't. i mean it is definitely changing the transportation model. i know in san francisco for instance, if you own a home within two or three blocks of one of these shuttle stops, the value of your home is about $100,000 greater than if you're further away. and one of the reasons is in the high tech community.

it tends to be dominated by kids in their 20s and early 30s who want to live in san francisco and work near us. our roads are certainly getting clogged up with these buses, but it's much better to have buses than it is to have cars. shafer: john, you wanted to jump in. mcalister: well, yeah, google -- i mean, they have the largest private bus system in the united states and without that -- they're bringing in thousands of people into mountain view and the north bayshore area. and if we didn't have that the traffic would really be stand-still. shafer: yeah, lisa. gauthier: and just for east palo alto, we're just the drive-through city. the people that are coming from the east bay to silicon valley -- people drive through east palo alto at this time. but i sit on the dumbarton rail corridor and we're trying to figure out how to alleviate some of that traffic off of the dumbarton rail that's flowing through menlo park and east palo alto. shafer: there's a lot of talk about b.a.r.t. being extended down to san jose. is that gonna help any of you? sinks: not really. mcalister: on the clip that you were showing earlier, they talked about 680. take a look at 237 take a look at highway 85, take a look at highway 101

where everybody's coming into this -- what we call the epicenter of silicon valley. and the transportation isn't there. it's going somewhere else. it's going southeast. and we'd like to see that extension or there's not even a mass transit bus service that goes down a lot of these ways. shafer: and is that a case of san jose kind of bigfooting all the other cities, or what is that? griffith: no, i don't think so. i think early on in the planning of b.a.r.t., there was consideration about whether or not to actually bring it all the way around and cities further up the peninsula were the ones that actually said "we don't want it in our city." that kind of hamstrung the rest of us. i mean the four of us represent cities that are in the big gap of b.a.r.t. and will probably never get it. san jose certainly had the extension where they could do it and the cities in between were willing to support that. shafer: let me ask another ramification -- about another ramification of these buses. and the nature of these huge campuses. because what i hear is that they're sort of self-contained. they have food, they have laundry, they have massages, they have transportation in and transportation out. people don't even have a car to go,

say into mountain view and have lunch. how do you feel about that? mcalister: well, i know for mountain view, with google -- google set their mode where they want a collaboration, so they want to keep everybody on campus. well, now all the other side companies are having to do the same thing to attract talent. if you don't serve a meal, you're at a disadvantage to try to get in talent, and talent is really hard to get right now because they're all jumping around. and therefore, with them keeping them on site any retail that is around it suffers because they don't have the density of the mass people coming and buying, and so therefore retail doesn't really work and so it keeps isolating that area where those campuses are from the rest of the community. shafer: and that's also a complaint about those buses, you know? that they're sort of isolated, almost some people here call it elite transportation. but i'm wondering what do you hear from small businesses? they'd probably like more of these workers to come to their place for lunch or ice cream or whatever it might be.

sinks: yeah. shafer: john, i know you own a couple ice-cream places. sinks: we know that employees in our big businesses do get out around town. they do bring people to our hotels. we get substantial revenue now from hotel-occupancy tax. small businesses are taking advantage of the fact that even employees in rat r captive campuses do want to get out and enjoy the community. they want to enjoy our green spaces. so, we see substantial economic benefit. maybe 2 to 1 on every, you know, dollar spent by the employee on the employee directly. shafer: believe it or not, we have just a few minutes left. but i want to ask each of you what do you see for your city? what would you like your city to be in 10 years? start with you, rod. sinks: i would love to see a great city filled with green spaces, some intensification. our residents want measured growth and metered growth, and i think we need to respect that. so, more economic diversity in town, not just concentrated in a few hands

but a wider group of companies to buffer the diversity risk. shafer: what about east palo alto, lisa? gauthier: east palo alto would love to see some development so we can continue to be a city. we'd like to see revenue coming through that will allow us -- shafer: you'd like to have some of the problems that they have. gauthier: i'd love to have some of the problems they have and have the economic development in dollars. shafer: yeah. john mcalister.st mcalister: i'd like to see -- the way our city's going right now, quality of life is important. so, that means safe streets, bicycle routes housing that's attainable, more open space, more parks and rec., better library. shafer: that sounds like a big wish list. mcalister: yeah. shafer: do you see it happening? mcalister: yes 'cause we have the resources and the commitment to do it. shafer: jim? griffith: i want to see a sustainable and balanced community sustainable in terms of environmental sustainability, transit, all in the services we need in terms of schools, our library. also i'd like to see a diverse community. i'd like to see us maintain that diversity

of economic classes, of racial backgrounds, of all of the factors that make it a very interesting and vibrant community. shafer: all right, well, i want to thank you all for coming up 101 today to be with us. rod sinks, mayor of cupertino, jim griffith from sunnyvale, lisa gauthier from east palo alto and john mcalister from mountain view. very interesting conversation. thank you all very much. all: thank you. shafer: that's all for tonight. but before we go we want to make a moment to remember richard moore, who died last month at the age of 95. moore was president of kqed from 1969 to 1973. richard moore was a man of many talents. he helped launch kqed's original "newsroom" in 1968. woman: ♪ it's a strange, strange world we're living in ♪ shafer: he was also one of the founders of public radio station kpfa in berkeley and a prolific documentary filmmaker

with more than 110 films to his credit, many of which he narrated. moore: there are now more people in california than in any other state in the union. shafer: in 1963, moore invited the writer james baldwin to san francisco to chronicle the lives of the city's black residents. he also made films about duke ellington and photographers ansel adams and dorothea lange. as a young man moore was one of the san francisco renaissance poets, crafting poetry in his writing shed. friends describe moore as a lifelong pacifist a belief reflected in his poetry. moore: i have knelt in the four dusty corners of my life and have been shown the bloody hands of the keepers of the promised land. shafer: moore published his first book of poems at 90. in a 2009 interview, he described what inspired his creative efforts. moore: that the world is vanishing immediately upon our efforts to enunciate it clearly.

shafer: well versed in american music, moore said he borrowed the title of the james baldwin film "take this hammer" from a lead belly song. man: ♪ take this hammer ♪ moore: "take this hammer carry it to the captain, tell him i'm gone, lord. i tell him i'm gone. if he asks you was i running if he asks you was i running tell him i was flying. tell him i was flying." man: ♪ if he asks you was i running ♪

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