SAN FRANCISCO — Tech industry titans have navigated a lot to get to where they are today: the dotcom crisis, the 2008 recession, a backlash against tech power, the pandemic. They have overcome boardroom clashes, investor power struggles and regulatory landmines.
But this summer, some of them ran into their most threatening adversary yet: multi-family housing.
Their battle took place in one of Silicon Valley’s most exclusive and wealthiest cities: Atherton, California, a 4.9-square-mile enclave just north of Stanford University with a population of 7,500. There, tech directors and venture capitalists united over the specter that more than one house could exist on a single acre of land in the general vicinity of their estates.
Their weapon? Strongly worded letters.
Facing the possibility of new construction, Rachel Whetstone, Netflix’s chief communications officer and an Atherton resident, wrote to the city council and the mayor that she was “very concerned” about traffic, tree removal, light and noise pollution and school resources.
Another local, Anthony Noto, chief executive of financial technology company SoFi, and his wife, Kristin, wrote that robberies and theft had already gotten so bad that many families, including him, had turned to private security.
Their neighbors Bruce Dunlevie, one of the founders of the investment firm Benchmark, and his wife, Elizabeth, said the developments violated Atherton’s Heritage Tree Ordinance, which regulates tree removal, and would lead to “a town that is no longer a suburb in nature”. but urban, which is not why the residents moved there.”
Other residents also objected: Andrew Wilson, chief executive of video game maker Electronic Arts; Nikesh Arora, chief executive of Palo Alto Networks, a cybersecurity firm; Ron Johnson, a former CEO at Apple; Omid Kordestani, former CEO of Google; and Marc Andreessen, a prominent investor.
They all fought against a plan to help Atherton meet state housing requirements. Every eight years, cities in California are required to show state regulators that they have planned new homes to meet the growth of their communities. Atherton is about to add 348 units.
Many California towns, especially those with wealthy people, have fought higher-density housing plans in recent years, a trend that has come to be known as NIMBYism for “not in my backyard.” But Atherton’s situation is notable for the extreme wealth of its residents — the average home sale in 2020 was $7.9 million — and because the tech leaders who live there have been committed to housing.
The businesses that have made Atherton’s residents rich have donated huge sums to nonprofits to offset their impact on the local economy, including driving up housing costs. Some letter writers have even served on the boards of charities dedicated to tackling poverty and housing problems in the region.
Residents of Atherton have expressed objections to the developments, even though housing density in the city is extremely low, housing lawyers said.
“Atherton talks about multifamily housing like it was an invasion from Mars or something,” said Jeremy Levine, policy manager at the Housing Leadership Council of San Mateo County, a nonprofit that voiced support for the multifamily housing proposal.
Atherton, which is part of San Mateo County, has long been known for its reluctance to develop. The city previously sued the state to prevent a high-speed line from running through it and voted to close a train station.
The zoning plan does not allow multi-family dwellings. But in June, the city council proposed an “overlay” designating areas where nine mansions could be built. The majority of the sites would have five or six units, with the largest having 40 units on five acres.
Then the protest started. Some opponents offered creative ways to meet state demands without building new homes. A technology manager suggested in his letter that Atherton would try to count all the pool houses.
Others spoke directly about their home values. Mr Andreessen, the venture capitalist, and his wife, Laura Arrillaga-Andreessen, a scion of real estate developer John Arrillaga, warned in a letter in June that more than one property on one acre of land “will HUGE reduce our home values, the quality of of ourselves and our neighbors and IMMENS increase the noise pollution and traffic.” The couple signed the letter with their address and a clear reference to four properties they own on Atherton’s Tuscaloosa Avenue.
The Atlantic previously reported on Andreessens’ letter.
Mr. Andreessen has been an outspoken advocate of building all kinds of things, including housing in the Bay Area. In a 2020 essay, he bemoaned the lack of housing built in the United States, calling the “insane skyrocketing house prices” in San Francisco.
“We should have gleaming skyscrapers and spectacular living environments in all our best cities,” he wrote. “Where are they?”
Other venture capital investors living in Atherton who oppose the mansions include Aydin Senkut, an investor with Felicis Ventures; Gary Swart, an investor at Polaris Partners; Norm Fogelsong, an investor at IVP; Greg Stanger, an investor at Iconiq; and Tim Draper, an investor at Draper Associates.
Many of the largest tech companies have donated money in recent years to help address the Bay Area housing crisis. Meta, the company formerly known as Facebook, where Mr. Andreessen serves on its board of directors, has pledged $1 billion for the issue. Google promised $1 billion. Apple surpassed them both with a $2.5 billion pledge. Netflix has provided grants to Enterprise Community Partners, a nonprofit housing organization. Mr. Arora of Palo Alto Networks served on the board of Tipping Point, a nonprofit organization focused on poverty alleviation in the Bay Area.
Mr. Senkut said he was upset because he felt that Atherton’s proposal for a mansion had been made in a sneaky way without community involvement. He said the potential for increased traffic had made him concerned about the safety of his children.
“If you have to do something, ask the neighborhood what they want,” he said.
Mr. Draper, Mr. Johnson and representatives of Mr. Andreessen, Mr. Arora and Mr. Wilson of Electronic Arts declined to comment. The other letter writers did not respond to requests for comment.
The sheer volume of comments prompted Atherton City Council to remove the townhouse portion from its plan in July. On Aug. 2, it instead proposed a program to encourage residents to rent out additional housing units on their properties, allow people to split properties and possibly build teacher housing on school-owned properties.
“Atherton is indeed different,” the proposal stated. Despite the city’s ‘perceived affluent nature’, the plan says, it is a ‘poor’ city with few people believed to be at risk for housing.
Rick DeGolia, the mayor of Atherton, said the problem with the mansions was that they wouldn’t meet the state’s definition of affordable housing, as land in Atherton costs $8 million an acre. A developer told him the units could cost at least $4 million each.
“Anyone buying into Atherton has spent a huge amount of money to get in,” he said. “They are very concerned about their privacy, that’s for sure. But there is a different focus on getting affordable housing, and that’s what I’m focusing on.”
Atherton’s new plan must be approved by the California Department of Housing and Community Development. Cities that fail to meet state requirements for new housing to meet community growth risk fines, or California could take over the local land use authority.
Ralph Robinson, an assistant planner at Good City, the consulting firm that Atherton hired to create the housing proposal, said the state had rejected the vast majority of the original proposals in recent times.
“We are very aware of that,” he said. “We are aware that we will get this feedback and we may have to rethink some things in the fall.”
mr. Robinson has seen similar situations throughout Northern California. However, the main difference from Atherton is his wealth, which attracts attention and interest, not all positive.
“People are less likeable,” he said.
