Tech heavyweights, dissatisfied with San Francisco, are planning their own enclaves—following a tradition among wealthy Americans

A group including venture capitalist Michael Moritz, philanthropist Laurene Powell Jobs, LinkedIn founder Reid Hoffman, venture capitalists Marc Andreessen and Chris Dixon, investor Nat Friedman, and Stripe co-founders John and Patrick Collison have spent $800 million on land in Solano County, a mostly rural area between San Francisco and Sacramento. The development would include “tens of thousands of new homes, a large solar energy farm, orchards with over a million new trees, and over ten thousand acres of new parks and open space,” according to a poll sent to residents, would feel like “a college town” and would be entirely privately funded, according to news site SFGate, which saw the poll.

This idyllic vision stands in sharp contrast to recent comments some of the group’s backers have made about San Francisco, painting the city as a den of crime, drugs, and homelessness. 

Moritz, who until last month was chair of Sequoia Capital, has lambasted the city’s drug issues and housing costs, decrying “open-air drug markets and homeless encampments” in a Financial Times editorial that also took aim at the city’s “deserted downtown; the flight of medium and large businesses and major conventions; the highest commercial office vacancy rates of any big city in the U.S.” and “housing costs that make it prohibitively expensive for all but the wealthy or poverty-stricken.”

Friedman, a backer of pro-development group California YIMBY, has also tweeted about San Francisco’s crime issues, including a break-in to his home that prompted him to move to the suburbs. 

“We moved out of San Francisco to Menlo Park a year ago after two meth addicts broke into our house while we were home and robbed us,” Friedman wrote in April, adding, “We didn’t want to leave SF — we love it there — but we have a young kid and it seemed irresponsible to stay in a place where drug addicts commit home invasions to the point where they are called ‘frequent flyers.’” (There were 7,300 break-ins in the city last year, according to the police department, up from about 6,050 in 2021.)

Other prominent business leaders have also bemoaned the fall of downtown San Fran, with the CEO of Park Hotels & Resorts, who stopped making payments on two downtown hotels, predicting “recovery” would take seven years. But unlike most CEOs, and indeed most Americans, the backers of a new city have the rare ability to simply drop their location and start anew.

In attempting to build a new settlement out of whole cloth, these tech moguls are following in a tradition started nearly a century ago by other American industrialists, who built company towns around their mills, and utopians who built remote communities inline with their social beliefs. It’s also a declaration of secession from those unhappy with a city’s politics, resources, or other amenities: Instead of trying to change it, give up and start their own. 

My town, my rules

As a case in point, Tesla CEO and prominent California critic Elon Musk, who relocated the company’s headquarters to Austin two years ago, is reportedly trying to build a new town east of that city. Entities connected to Musk have bought up 3,500 acres in Texas’ Bastrop County, with the ultimate goal to have a city where Musk could “set some regulations” and create below-market housing for Tesla and SpaceX employees, the Wall Street Journal reported.

Onetime Musk collaborator Peter Thiel has also backed similar city-building efforts with a seed fund to the Seasteading Institute, a nonprofit that aims to start floating libertarian sea colonies around the world. In the previous decade, the institute promised to build a platform city off the coast of San Francisco as well as a floating island in French Polynesia. Neither project materialized, but the institute’s current pipeline of ideas includes floating hotels, a series of government-free interconnected islands, and “the first human designed, oceangoing City-State,” which it promises to create within a decade.

City-building isn’t limited to the technologically inclined, either. Retail executive Les Wexner, who owns Victoria’s Secret parent L Brands, bought most of the land in New Albany, Ohio, back in the 1980s. He has since turned this Columbus exurb into a master-planned oasis, complete with cookie-cutter Georgian style houses whose median sale price of $900,000 is triple that of the neighboring city and whose park, hospital, and annual equestrian show still bear the Wexner name. The Walton family has funded infrastructure in the Walmart headquarters of Bentonville, Ark. And the Orlando suburb of Celebration was built entirely by the Walt Disney Company in the 1990s, under a special agreement with the state of Florida. 

But, as the current fight between Disney and Florida Gov. Ron DeSantis shows, privatizing cities can come with serious downsides. Chief among them is that such towns often have their own privatized government that isn’t responsive to elected officials in the local community or even the state in which the city is located. By separating themselves from their surroundings, these towns also exacerbate inequality, creating enclaves of the rich while reducing the tax base of the surrounding region.

Then there’s the process of starting the city to begin with. Existing residents of Solano County expressed alarm at the extreme secrecy of a coordinated effort to buy 52,000 acres in a rural area around an Air Force base that includes mostly farms and a two-lane road.  

“People with money have their own goals,” Duane Kromm, a former Solano County supervisor, told the San Francisco Chronicle. “It’s clear they have no sensitivities to the local community,” he said of the investors, adding, “The damage they are doing to family farms, to people who have known each other for generations, is unbelievable.”

A spokesman representing the techies who bought in Solano County didn’t directly answer questions about what lessons the people learned about launching new cities, but promised to work with existing residents in a statement. 

“We are proud to partner on a project that aims to deliver access to good-paying jobs, affordable housing, clean energy, sustainable infrastructure, open space, and a healthy environment to residents of Solano County,” Brian Brokaw, a spokesman for Flannery Associates, the investment group, said. “We are excited to start working with residents and elected officials, as well as with Travis Air Force Base, on making that happen. That engagement with community leaders starts this week, and we look forward to sharing more soon.”

The investors face an uphill battle in getting the rezonings and voter approval that would be required to make their utopia a reality. In the spring, Flannery sued a group of local homeowners, accusing them of a conspiracy to drive up their land prices; several of them have since settled while others have moved to dismiss the suit. Still, if there’s anyone who knows how to use local government to their ends, it’s these folks. 

“You are looking at a murderer’s row of very, very clever investors,” Matt Regan, senior vice president of the business group Bay Area Council, told the Chronicle. “If they are serious about this venture, I wouldn’t bet against it.”