Robber Barons Would Have Loved Facebook’s Employee Housing

A man rides a bicycle through the campus at Facebook headquarters in Menlo Park, California, Feb. 3, 2015. Eric Risberg/AP

Welcome to Facebookville, California. Population: 38,207. Elevation: 72 feet. Largely home to employees of the social networking giant. The quaint town traces its roots to Menlo Park, which at one point was one of the most affluent cities in Northern California. But when the company started building housing for its well-heeled employees back in the early 2010s, well, the writing was on the wall.

OK, so maybe that dispatch from the future is a bit exaggerated. But as Silicon Valley bursts at its suburban seams, one tech company after another has been buying up properties throughout the region and embarking on ambitious development projects. Apple occupies 60 percent of Cupertino’s commercial space. Google dominates Mountain View, and Facebook is spreading its tentacles throughout Menlo Park.

Of course, elaborate, amenity-filled campuses are nothing new to Silicon Valley’s big tech firms. Google’s microcosm looks and feels like nothing so much as a college campus with a zillion-dollar endowment. Many current Facebook employees presumably eat at the Facebook BBQ pit, relax on the Facebook plaza, and exercise at the Facebook climbing wall. But adding housing is something new. If this real estate move goes through, about 300 of those Facebookers will soon sleep in a Facebook apartment. I’m sure many of them will “like” that arrangement.

The most charitable interpretation of all this is that Facebook is building the first arcology, like what the fantasist architect Paolo Soleri described and halfway (well, eighth-way) built at Arcosanti, his own little urban microcosm in the Arizona desert. Arcologies were supposed to be self-contained cities-in-a-bottle, live-work-play spaces that were self-sustaining, with teeny ecological footprints.

But if you want to be less charitable, Facebookville might still sound familiar. The company is really just creating a version of the company town, something that was all the rage among wealthy industrialists in the early 20th century. The concept dates back to 1880, when George Pullman, a rail car magnate, first platted Pullman, Illinois, which today is a neighborhood of Chicago. Pullman, having grown sick of his employees complaining about things like wages, working conditions, and so on, decided that the solution to unruly employees was to build a nice town and then require them to live in it. Fortunately for the workers, the houses and apartments were anything but tenements. They were pretty swanky for their era, with gas service and indoor plumbing. Unfortunately for the employees, Pullman wanted a minimum 6 percent profit from the development. When times were good and wages were high, that wasn’t a problem. But in 1893, the economy tanked and Pullman decided to cut wages without lowering rents. Unruliness ensued.

Though Pullman (the town) didn’t live up to the hopes of Pullman (the man), that didn’t deter others from diving in. In 1903, Milton Hershey tore up farm fields in Derry Township for what would become Hershey, Pennsylvania. Three years later, the US Steel Corporation, led by chairman Elbert H. Gary, went on to build much of Gary, Indiana. In the 1910s, Walter J. Kohler founded—you guessed it—Kohler, Wisconsin, to house the employees of his burgeoning plumbing fixture business.

Many of these were founded, like Pullman, “in order to improve workers’ conditions and avoid tensions and workers’ labor activism,” says Marcelo Borges, a historian at Dickinson College and expert on company towns. By providing workers with better living at working conditions, the industrialists were hoping to keep unions at bay. It didn’t work for Pullman and ultimately didn’t work for many others, either.

Company towns of this era had a barely-hidden paternalistic agenda. Wealthy businessmen saw their workers as family, sort of, and they wanted to provide their wards with safe, modern housing. But many were strict fathers, dictating the minutiae of their grown employees’ lives, from picking the books in the library to restricting the availability of alcohol. It’s hard to imagine Facebook going that far, though the company does try to subtly influence its employees lives by offering such healthy freebies as on-site gyms, bike repair, and walking desks. It’s a strategy that mimics what happened with some later company towns, which employed paternalism to better the company, not just employees’ lives. “Company welfare was seen as an important strategy to promote company loyalty and peaceful relations,” Borges says.

Of course, Facebook isn’t exactly like the Pullmans, Hersheys, and Kohlers of olden times. For one, those were all built on what developers call greenfields, or land which hadn’t been previously developed for housing or commercial uses. Borges also points out that they didn’t have to deal with any existing municipal governments, either. Such greenfield freedom allowed industrialists to maintain a level of autonomy that would make even the most libertarian techies blush. Today, in Silicon Valley, there’s not much of undeveloped land left, so Facebook will have to renovate or demolish to accommodate its plans.

Those discrepancies means Facebook won’t be creating a company town from whole cloth, but slowly taking over the existing city of Menlo Park and re-envisioning it for their employees. The Facebook-backed Anton Menlo development, for example, will consist of 394 units when it opens next year. Just 15 of those are reportedly available for non-Facebook employees.

Now, a development of under 400 units may not seem like much in a city of 33,000 people, but keep in mind the company currently employs 4,600 people at its current headquarters, and its flashy new Gehry office building will have space for 2,800. How many of those employees will be new hires or relocations? Who knows, but if we assume (wrongly, but bear with me) that every current headquartered employee lives in Menlo Park, Facebook would employ 14 percent of the population. You might see where I’m going with this.

In the last municipal election, just over 10,000 ballots were cast from 17,000 registered voters, a turnout which was “unusually high,” according to poll workers. The margin between third and fourth place (the top three are elected) was less than 350 votes. In fact, fewer than 2,000 votes separated the top from the bottom. Changing the dynamic of the Menlo Park city council wouldn’t be that difficult. Even a tiny amount of voter coordination could do the job.

So maybe Facebookville is an arcology—a political one. What Facebook is building is both entirely similar and completely different from Pullman, Illinois, and its turn-of-the-last-century brethren. It’s a 21st century company town—built by slowly, occasionally unintentionally, taking over a public entity, and building a juggernaut of a private institution in its place.