Jan. 29 (Bloomberg) -- Oakland, California, officials worry that a surge in crime will cost the city employers even as the state begins to shake off the worst recession since the Great Depression.
The city of about 396,000 has hired former New York City Police Commissioner Bill Bratton to boost crime-fighting in a community where census data show 1-in-5 residents live in poverty, while 8 percent of owner-occupied homes are valued at $1 million or more.
Oakland’s 22 percent rise in murders and 43 percent jump in burglaries last year, according to city data, comes as California is emerging from a decade of fiscal crisis. The technology industry in the San Francisco Bay area, which includes Oakland, is driving job gains at twice the national rate, according to the Center for Continuing Study of the California Economy in Palo Alto.
“It’s hard for us to have a conversation with people who are concerned about economic-development issues without the issue of public safety coming up,” said Fred Blackwell, who heads the city’s economic development office. He said real-estate brokers told him recently that some businesses backed out of letters of intent and lost interest in moving to Oakland.
The rise in violent offenses stands out even in a city historically beset by elevated crime rates. The escalation follows budget cuts that shrank the police force by about a fourth since 2009, according to Johnna Watson, an Oakland police spokeswoman.
Oakland ranked fifth among U.S. cities in crime in 2011, behind Flint, Michigan; Detroit; Camden, New Jersey; and St. Louis, according to the City Crime Rate Rankings based on FBI data, published by Congressional Quarterly.
Business owners who attended a briefing on the city’s public-safety measures, including the decision to hire Bratton, “were saying this is the kind of thing we need,” said Paul Junge, public policy director for the Oakland Metropolitan Chamber of Commerce.
“There’s growing concern that when we see sustained high levels of crime and the trend is going in the wrong direction -- the trend is going up -- we want to see that problem addressed,” Junge said.
Hundreds of people lined up to speak on the $250,000 contract that includes Bratton’s hiring at a Jan. 22 City Council meeting. Some expressed apprehension that Bratton, who was also chief of police in Boston and Los Angeles, would apply a “stop and frisk” policy that could lead to racial profiling.
The city is 28 percent black, about four times the state average, according to census data. Whites make up 35 percent, while Asians are 17 percent. Hispanics, who can be of any race, are 25 percent of the population.
Oakland’s challenges go beyond crime. Since last year, the cash-strapped city has been at odds with Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, over a 1998 interest-rate swap after city officials asked to get out of the agreement without paying a termination fee. The City Council in December agreed to begin the process of cutting off business with the New York-based bank after Goldman denied the request.
Some officials and business owners say the image of Oakland as a high-crime city is nothing new.
“That perception has persisted for 20 years, regardless of whether actual crime rates were up or down, and has continually been a barrier to getting businesses from looking at Oakland as a place to invest,” Patricia Kernighan, president of the Oakland City Council, said by e-mail.
Murders in Oakland are below the rates in the early 1990s and mid-2000s, said Franklin Zimring, who teaches criminal justice at the University of California, Berkeley.
“What you have here is crime increases and crime rates that are extremely high by Bay Area standards and by 2013 standards,” Zimring said.
Oakland’s crime is concentrated “in the areas of largest disadvantage, among disadvantaged minority populations -- principally African-American and Hispanic,” he said. “It’s not game-changing in most of the areas where the middle and upper classes are concentrated.”
The city’s affordability compared with rising commercial real-estate rates in San Francisco, across the bay, is drawing technology tenants to Oakland, said Chris Curtis, a development partner at Metrovation Brokerage, an Oakland-based real-estate development company.
“Oakland has a Brooklyn-type appeal,” Curtis said.
The crime issue is only part of the development picture for Oakland, said Blackwell, an assistant city administrator responsible for development.
“There remains substantial interest in the city of Oakland because of our rents compared to San Francisco, because of our strategic location from a transportation point of view, because of our climate,” he said.
At Ask.com, an Oakland-based online question-and-answer business, the rise in crime isn’t affecting employees, said Doug Leeds, the company’s chief executive officer.
“We’re not seeing our employees reporting greater incidents of them being burglarized or anything like that,” Leeds said. “It does happen.”
Leeds said Ask.com has 220 people in Oakland and plans to increase employment by 20 percent this year.
“When people are interviewing at the company and they are wondering whether they should move or work in Oakland, then it does come up and it is an issue,” Leeds said. “When we get new employees who do start with us and they come to Oakland, they often say how they’re surprised how nice it is here.”
The company, which moved to Oakland in 2004 and just renewed its lease, takes precautions, including providing employees with an escort to the train station, he said.
“We certainly read the stories and we see the figures increasing, but on a daily basis, we come to work and we don’t feel the impact of it,” Leeds said. “We don’t see crime tape on the streets, we don’t see chalk outlines of people, there aren’t bullet noises.”
To contact the reporter on this story: Alison Vekshin in San Francisco at firstname.lastname@example.org.
To contact the editor responsible for this story: Stephen Merelman in New York at email@example.com.