Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Rebecca Zisser/Axios

Alongside unicorns boasting sky-high IPOs and sparkling urban redevelopments, superstar cities like New York and San Francisco are beset by ever-deepening inequality and housing crises.

That's the steep cost of superstardom — an enviable tax base and a glamorous reputation, set against rife homelessness, hours-long commutes in bumper-to-bumper Teslas and BMWs, and the erosion of your home's character.

As we reported last week, longstanding U.S. tech hubs like Boston, Seattle and Silicon Valley continue to build in stature, pumping out top-tier, high-paid jobs, and serving as the setting for fancy, high-cost pads.

But there are also numerous, and so far intractable, downsides to tech superstardom — starting with living as a company town and stretching to city demography:

  • In city after city, heavy-handed technology giants often influence local affairs, assuming the authority held in prior generations by paternalistic industrial giants.
  • Huge swaths of lifers get priced out of housing, resulting in an increasingly homogeneous population bereft of children, immigrants and communities of color, says Jennifer Friedenbach, head of San Francisco's Coalition on Homelessness.
  • "The worry is these places are becoming Meccas for white, wealthy, college-educated brogrammers," says Mark Muro of the Brookings Institution.

The big picture: Articles upon articles have chronicled the housing crunch in superstar tech hubs — skyrocketing home prices that push out almost all but the beneficiaries of a rich IPO.

But a less-reported-on effect of tech's rise is the slow evisceration of the soul of the cities they call home — apparent through transformed neighborhoods and the detritus of shuttered local businesses.

  • Between 2017 and 2018, 850 Bay Area restaurants — many of them long-time neighborhood staples — closed their doors.
  • The culprit, according to Gwyneth Borden, executive director of the Golden Gate Restaurant Association, is the rising cost of living. The old favorites simply could not compete with buzzy, new spots.
  • In Seattle, natives are finding once-beloved bars and coffee shops so crowded that they're almost unpleasant, Jen Swanson, a resident who recently returned to the city after 10 years, writes in the Seattle Times.

“I don’t know that we can get the folks back that we’ve lost,” says Friedenbach. “A lot of the fabric of the community is gone.”

By some metrics, life is good for superstar city residents.

And some experts say tech companies are wrongly blamed for some urban ills — such as homelessness:

  • "I don't think there is credible evidence that links homelessness to tech," says UC Berkeley economist Enrico Moretti.
  • "I think it's the policymakers' lack of planning," says Friedenbach. "We had enough experience in San Francisco after the last dot-com boom to know exactly what would happen."

But there are practical reasons for CEOs to avoid superstar cities, too, says Madhu Chamarty, founder of BeyondHQ, which scouts locations for tech companies to build second and third offices.

  • "There is the world of Big Tech, and then there is the world of the tech startups. Attrition is a huge problem for the smaller companies, and convincing people to join is another problem," he says. The smaller companies may thrive with more room to run in a second-tier city.

Plus, "there's a little bit of homogeneity of thought" in Silicon Valley, Chamarty says.

  • Take Bodega, the Silicon Valley idea of killing your local convenience store and replacing it with a digital "bodega" in the lobby of your apartment building. It was lauded by VCs in the Valley, but found itself in the middle of a PR fiasco when it advertised outside of that bubble and enraged New Yorkers and others who have soft spots for their corner stores.

Go deeper

29 mins ago - Technology

Facebook: Metaverse won't "move fast and break things"

Illustration: Aïda Amer/Axios

Facebook on Monday said it will invest $50 million over two years in global research and program partners to ensure its metaverse products "are developed responsibly."

Why it matters: "It's almost the opposite of that now long-abandoned slogan of 'move fast and break things,'" Facebook's VP of global affairs Nick Clegg told Axios in an interview at The Atlantic Festival Monday.

Ina Fried, author of Login
38 mins ago - Technology

Facebook presses "pause" on Instagram Kids

Illustration: Annelise Capossela/Axios

Facebook's announcement Monday that it was "pausing development" on Instagram Kids did little to slow a wave of criticism of the project ahead of a Senate hearing Thursday.

Yes, but: There's an argument to be made for building kids' versions of popular apps, even if their adult versions are causing real-world harms.

Ford's big plans to turbocharge the electric car industry in the U.S.

Illustration: Annelise Capossela/Axios

Ford Motor Company’s new $11 billion manufacturing plan, the biggest component of which will sit just outside Memphis, is part of a much bigger effort to put the U.S. at the center of the electric vehicle revolution, executive chairman Bill Ford says.

The big picture: Ford’s plans — for enormous facilities in both Tennessee and Kentucky, employing a combined 11,000 workers — are ambitious manufacturing efforts designed to minimize their environmental impact.