The Wall Street Journal: The yin and yang of Twitter’s tax breaks in San Francisco

SAN FRANCISCO — Lucho Cabrera, a 53-year-old formerly homeless man, turned to an unlikely place during his recent hunt for affordable housing: a $3 million community center built by Twitter Inc. across from the social media giant’s sleek art deco headquarters.

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The NeighborNest center exists because the city five years ago struck deals with tech companies to move to the gritty Tenderloin area in exchange for tax breaks particularly attractive to start-ups. Twitter TWTR, -0.14%  , Zendesk, Spotify and others snapped up new headquarters buildings, turning a dilapidated commercial strip known as Mid-Market into a new tech hub replete with hip espresso cafes and artisanal lunch joints.

For low-income residents such as Cabrera, who now get free technology training and child care at the community center, the corporate neighbors are welcome. “You hear stuff on Twitter taking over,” Cabrera said. “Hey, these people are helping us.”

Across the U.S., tensions over gentrification have given rise to community benefits agreements, which seek concessions from developers in exchange for community support for their projects. Activists hail such agreements when they benefit those likely to be displaced by neighborhood change.

But critics of the San Francisco tax breaks say they have cost the city revenue without bringing enough concrete benefits to the community. Advocates for the poor also say the Tenderloin’s redevelopment threatens to strip away one of the last redoubts for low-income residents in an ever-wealthier city.

An expanded version of this report appears at WSJ.com.

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