What Seattle can learn from the Eastside’s tech boom

Substitute “Seattle” for “Redmond” and “Amazon” for “Microsoft,” and the story sounds eerily familiar:

“The Redmond mother never asked the Microsofts and Nintendos to set up headquarters in her hometown,” reads a Seattle Times story from Dec. 16, 1996. “And from her front window, she sees big business eroding her dream of a safe, quiet life.”

“This growth has come way too quick, and we can’t handle it,” the woman, Liz Bernberg, tells the newspaper. “I think a lot of people are moving here because they want quality of life, but this place is turning into what they’re running from.”

Over the course of the past decade, Seattle’s tech boom has dramatically changed our city. It’s brought thousands of new workers, driven up median incomes, and bumped up our housing costs.

That cycle is nothing new for folks who lived on the Eastside during the Microsoft boom of the ‘80s, ‘90s and early 2000s. Reader Melissa Figel noted those parallels when she asked us to dig into this question:

“We always talk about how Amazon is changing Seattle, but what about Microsoft? How did they change the Eastside (and the city) and how does that compare and contrast with the Amazon effect?”

John Marchione has been mayor there since 2008. He likes to tell people that the Redmond he grew up in was a sleepy town that didn’t even have a store where you could buy underwear.

That started to change in the late ‘80s and early ‘90s. Microsoft moved its headquarters from Bellevue to an unoccupied 40-acre patch of land in Redmond’s Overlake neighborhood in 1986, just before the company went public and three years before it introduced the blockbuster Office suite of software.

The company’s growth brought thousands of new workers to Redmond. And starting in the late ‘80s, the city had more jobs than people — a trend that continued for many years.

That imbalance between workers and residents pushed Redmond to pass a head tax in the late ‘90s. Supporters argued the money was needed to meet Microsoft’s growing demands on the city’s police and fire departments, roadways, and other infrastructure. Today, the tax is $135 a head, with $55 going toward transportation and the remainder ending up in the city’s general fund.

In Seattle, as you may recall, city council repealed a $275-per-employee head tax last year amid intense pressure from Amazon and other employers. The tax was expected to generate more than $20 million for housing and homeless services.

Affordable housing is key

Microsoft has always been proactive about investing in roads and other infrastructure, Marchione said, but affordable housing is the persistent challenge.

The city leaders who won elections in the ‘90s tended to have a “no-growth mindset,” he said, but that started to change around 2007 when officials realized that “growth is going to occur no matter what. It’s do we want to control it, or do we want to let growth control us?”

And the growth keeps on coming. Redmond’s population jumped 18 percent from 2010 to 2017, to 60,712 people. Microsoft, which remains the city’s top employer by a long shot, is expanding its Overlake campus and plans to add 8,000 workers there. (As of 2017, 38,700 Microsofties worked in Redmond, making up 43 percent of the city’s total employment. In Seattle, Amazon employs roughly 45,000 people.)

As in Seattle, the Eastside’s housing market has soared in recent years, pushing people even farther into the suburbs and crowding rural roads.

“It’s reached a crisis point in the last two to four years,” Marchione said. “(People with) middle-income jobs can’t afford to live in Redmond without an extra large down payment or some other accommodation.”

To address the problem, city leaders are working to add density and infrastructure to Overlake and Redmond’s downtown area.

And earlier this year, Microsoft pledged $500 million to invest in affordable housing across the Puget Sound region, with half of it directed to Eastside communities like Redmond. Marchione said the company is partnering with local governments and nonprofits to figure out how to best leverage those funds.

In Redmond, that means more money for agencies like the King County Housing Authority, so they can purchase and preserve existing housing. New construction will also be part of the equation, Marchione said.

Of course, hindsight is always 20-20. If Marchione could go back 30 years, he’d advise city leaders to focus on affordable housing as a way to prevent traffic woes before they start.

“The closer those are balance — the more affordable the housing is — the less traffic is generated,” he said.

By Caitlin Moran
Caitlin writes newsletters and stories for The Evergrey. She's worked as a journalist in and around Seattle since 2010 and is a proud resident of Capitol Hill's Summit Slope neighborhood.