Twentieth-century 'company town' returns to Silicon Valley

  1. The company town seemed to have become a thing of the past
  2. Facebook is building 1,500 units in Palo Alto, California
  3. Living in company housing can have drawbacks

East Tilbury in Essex, England, is a living museum of a phenomenon common on both sides of the Atlantic in the 20th century: the company town. Settlements built or largely taken over by a single company appeared to have gone the way of the job for life. But the needs of Silicon Valley might be reviving the model.

The “quasi-public municipalities” of a hundred years ago (CityLab) were owned wholly or largely by a single corporation, providing housing and facilities for their workers. Hundreds dotted the United States and Europe, built by companies as disparate as Hershey’s, the chocolate manufacturer, (of Hershey, Pennsylvania) and soap-makers the Lever Brothers (which founded Port Sunlight, near Liverpool, England).

But today the company town has all but disappeared from traditional manufacturing industries. Visit a town like East Tilbury, and you’re confronted with a former manufacturing utopia that was unable to resist the economics of cheap production in distant locations.

East Tilbury, a village since Saxon times, was adopted, virtually absorbed, by the Bata Shoe Company to house its workers in the 1930s. Bata was at one point one of the largest shoemakers in the world, its footwear manufactured in dozens of close to identical company towns all modelled on its Czech headquarters of Zlín. The company provided almost everything for its workers and their families, from housing to schooling to entertainment.

At its peak in the 1950s, 3,000 people worked for Bata in East Tilbury. But like company towns everywhere in the West, it suffered progressive decline. Bata closed the last of its East Tilbury factories in 2005.

Around the mid-20th century, the emergence of the consumer car, and mass transit more generally, made it unnecessary for workers to live within walking distance of their workplace, says Hardy Green, author of The Company Town. Later, companies like Bata stopped being able to afford to hire labor in the West anyway, and moved production to countries where costs were lower.

Mike Pinion grew up in East Tilbury. He joined Bata when he left school, and worked for the company until it definitively left England, in 2005. “We saw it coming,” he says. Bata moved its manufacturing to Malaysia, where labor costs are around a quarter of what they are in England. One of his last jobs for Bata was installing the equipment he had worked on in the Malaysian factories.

Company town resurrected

For a time, the company town appeared a curious relic of the past. But in Silicon Valley, where an abundance of qualified and well-paid engineers desperately need homes, the model appears to have made a comeback.

Californian tech companies have long sought to attract highly prized employees with ever-more lavish amenities. Free meals, transport, yoga classes, gym memberships, laundry – all are common (AOL) for engineers and designers at top Silicon Valley firms. But as commutable accommodation becomes harder to find, some are branching out to provide housing, too.

Green says that tech companies’ decision to start housing their workers is driven by necessity.

“Housing costs in Silicon Valley and the Bay Area have skyrocketed. If tech companies want to attract skilled workers they may have no choice but to build good, affordable housing for these workers, who of course have lots of alternatives.”

Facebook, for instance, is building (New York Times) 1,500 housing units, mostly aimed at its employees, in its new Willow Village campus in Palo Alto. Last December, Google signed (Mercury News) an agreement with the city of Mountain View, where it is headquartered, to build close to 10,000 homes and apartments. Needless to say, both developments will be situated conveniently close to Facebook and Google’s offices.

The office-sharing startup WeWork, for its part, is expanding with WeLive, providing studios and communal areas in the same building as WeWork office space. As one resident puts it: “You just roll out of bed, go down the elevator and get to work.” Not unlike the company towns of the last century: Mike Pinion remembers choosing to work at Bata in no small part because he could walk to work.

You’re not working eight hours a day any more … every part of your life is part of work. – Razvan Zamfira

There are undoubtedly differences, as Stephen Metcalfe, the British MP who represents East Tilbury, points out to WikiTribune. Well-paid tech workers “have huge amounts of choice,” he says, contrasting with his constituents who used to work for Bata.

Metcalfe argues that tech workers tend to be in “high paid jobs and in high demand jobs”. It is “in the employer’s interest to make sure their staff stays with them,” if necessary by providing them with amenities, he says.

Another side effect is that tech companies which provide housing can also have the additional benefit of helping incubate innovation in an industry heavily reliant on it, says Razvan Zamfira, a co-author of The Re-birth of the Company Town.

“If you create this vibrant urban environment where you start to attract people that don’t only come from your company but come for the startups that grow around you, then you create new coalitions between different individuals and different ideas,” Zamfira says.

Critics fear erosion of work-life balance

Naturally, when your employer is your landlord, and possibly providing you with transport, food, and other amenities too, the lines between work and time off become blurred.

“You can work from home, you can work in your bus, you can work in the public space that’s also in the campus designed by Google. So you’re not working eight hours a day any more. Basically every part of your life is part of work,” says Zamfira.

To some, this is an unwelcome trend. “If your employer is also your landlord and maybe even your social-services provider, an employee may be thankful — or may have multiple reasons to be unhappy,” Green argues.

A Facebook spokesman’s response to request for comment was to provide a list of local and legislative measures he says Facebook supports, including efforts to provide housing at below market rates in Menlo Park.

The Facebook spokesman said: “On July 7, 2017, Facebook announced our next phase of expansion with the Willow Village, which will bring community benefits such as new affordable housing and retail to the Belle Haven neighborhood of Menlo Park.  The Willow Village will include 1500 units of housing with 15% offered below market rate.”

  • WikiTribune approached Google for comment, but at the time of publishing had not received any response. WeWork declined to comment for this story.

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