The power of Twitter has manifested itself in a dilemma in San Francisco: the city decided in 2011 to offer a tax break to keep Twitter Inc. from leaving the city, but there are accusations that the tech employees at Twitter and similar companies are driving up rents and home prices.
Now a San Francisco supervisor wants a hearing to discuss the impact of the tax break, reports Eric Young of the San Francisco Business Times.
The tax break was given to encourage Twitter to stay in San Francisco by allowing businesses that were located along the Mid-market corridor to avoid paying payroll taxes for up to eight years. Those in favor of the tax break argued that the lost revenue for the city would be regained because the business would engender more commerce by staying.
There is strong evidence that the supporters of the tax break were correct; the San Francisco Office of Economic and Workforce Development reported this year that since 2011, 17 companies transferred their businesses to the Mid-Market area. The report also found that the commercial vacancy rate dropped from 30% to 8.5% after the tax break went into effect.
But Supervisor David Campos wants a hearing on the issue: he intends to have “a discussion on the amount of the tax break, its impact on commercial rents, including rents for non-profit tenants, as well as its impact on residential housing prices and tenant displacement in San Francisco, and a discussion on the impacts of the city’s decision not to collect stock based compensation.”
The hearing is scheduled for April 30.