Palo Alto’s Mayor Wants to Ban Tech Firms


Palo Alto is synonymous with Silicon Valley. Hewlett-Packard, Tesla, Facebook, and Xerox PARC are just a few of the iconic firms that have called the city home over the past four decades.

But not everybody’s happy with the technology industry’s heavy presence. “Big tech companies are choking off the downtown,” Patrick Burt, mayor of Palo Alto, recently told The New York Times. “It’s not healthy.”

Burt wants to dust off an old, little-used regulation that prevents companies that specialize in research and development from establishing themselves in Palo Alto. In other words, most technology companies would need to go elsewhere.

If that regulation regrows teeth, tech firms could still presumably set up shop just outside the city. The big question, however, is whether such a drastic measure would actually solve the problems it’s meant to address, such as skyrocketing housing prices and congestion.

As detailed in a recent article on Bloomberg, the median home value in Palo Alto is $2.5 million, or 13 times the national average. One-bedrooms and studios can cost $1 million. That translates into an astronomical cost of living, even for well-compensated techies. More affordable housing is on the agenda for the local government, but such initiatives can take quite some time to bear fruit (or apartments, as it were).

In nearby San Francisco, currently in the throes of its own housing crisis, there’s an aggressive debate over whether to relax building and zoning regulations enough to set off a flood of new construction, including high rises. Until something is done, rents there remain among the highest in the country, averaging (according to a recent report by Radpad) $3,500 for a one-bedroom.

For tech pros, astronomical rents and expensive lives are the downside of moving to major tech hubs such as Silicon Valley and Silicon Alley. And not all of them are putting up with the costs; that the fastest-growing states for tech jobs include Utah, Michigan, Alabama, and Illinois just demonstrates how tech companies—and the people who work at them—are more than willing to set up shop in places with reasonable costs.

4 Responses to “Palo Alto’s Mayor Wants to Ban Tech Firms”

  1. Palo Alto’s Mayor Burt has been horribly misquoted. He was pointing out how the retail sector in downtown Palo Alto is suffering because tech firms are squeezing them out at the ground level. Yes, there is a statute that can be envoked, but it will not ban tech firms from the womb of Silicon Valley. Such hyperbole is classic media click-bait.

  2. Assuming it’s true…

    If I owned a company in Palo Alto and was getting told to close, I dont think I’d just relocate to out side of the city. Doing Business in California is EXPENSIVE. I think I’d go all remote, or remove HQ to a more fiscally sound state like Utah or Texas. Cheaper cost of living as well. I’m sure the California state officials would have some push back on such a policy as it could have a significant impact on their tax revenue.

  3. dwfAustin

    Honestly, unless you grew up there or have a stake in California it’s hard to care. All the ones that couldn’t hack it there are moving here anyway. How do you quantitatively measure the success of these intellectual property corporations that are driving up cost all over California? For example, if you had to choose one word to describe how Facebook generates income what word would you choose? (For example, you’re a car company you might say cars). This might be a tech trend that goes on forever and prices keep going up and It might also be impossible to reverse the course but Palo Alto can try.