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The Report

Welcome To The World’s Most Expensive Town

How the tech boom turned a sleepy Californian suburb into a billionaire’s playground

  • Aerial view over Atherton. Photograph by Mr Curt Walton

The billionaire couple were nervous. They had just hired a new nanny to take care of their two children and they were worried she might be struggling to re-adjust to living in a billionaire’s household in the wealthiest town in the US, in the heart of Silicon Valley.

So, at the end of her first week, they sat down for a chat. How was she feeling about the new job, they asked.

“It has been a little difficult to adjust,” she said. “I’m not used to working in a house that doesn’t have its own pastry chef.” It turns out, her previous employer was also a tech mogul.

They do things differently in Atherton, recently revealed as the richest town in the country by Forbes, the bible of US wealth. The average annual household income among the town’s 7,000 residents is almost $500,000. That’s eight times the US average, making the five square miles of oak plain in San Mateo County more monied than Beverly Hills, home of Hollywood actors and studio heads, and Connecticut, where most of the world’s largest hedge funds are based. Locals pay the highest price for property in the US, with the average cost of a home there $9m. The next priciest, Sagaponack in Long Island, New York, is nearly $3m cheaper at $6.4m.

The town is home to the Silicon Valley elite, both techie and financial. Mr Eric Schmidt, executive chairman of Alphabet, Google’s parent company, lives there. So do Ms Sheryl Sandberg, chief operating officer of Facebook, and Ms Meg Whitman, chief executive of Hewlett-Packard. Mr Paul Allen, Microsoft co-founder, has a home, to add to his numerous others around the world, as do Messrs Charles Schwab, who founded the investment firm of the same name, and Mr George R Roberts, the “R” in private equity investment house KKR.

  • Holbrook-Palmer Park. Photograph by Mr Bernard Andre

Among the Americans are the odd “Briddish” settlers. Ms Rachel Whetstone, former chief of staff for the UK’s Conservative Party, who left Britain for California to head up communications first for Google and then Uber, lives in the area with her husband, Mr Steve Hilton. A former policy adviser to British prime minister Mr David Cameron, he left government five years ago and moved to California to lecture at Stanford University, a few miles south of Atherton. He proceeded to fall out spectacularly with his old Downing Street boss when the two men were on opposing sides during the EU referendum.

Mr Hilton might be about to do the same with his new neighbours. He recently wrote a rather good book called More Human, in which he argues we should use technology to create “a world where people [and not Silicon Valley] come first”. Mr Hilton’s neighbours like algorithms more than people. He doesn’t even have a smartphone. Oh, to be a fly on the barbecue at one of his cook-outs.

Riding into town in (what else?) an Uber, Atherton – which grew from a village into a town in the early 20th century when it became the favoured location for the summerhouses of San Francisco’s industrialists and businessmen – looks utterly unremarkable. That’s the thing about Silicon Valley. It may be where some of the most creative people on the planet work – people such as Apple’s Sir Jony Ive, who designs more than just the gadgets we feel we must have or die; he designs tomorrow – but most of its towns look like any other in the US.

In Atherton, there are the usual malls, a post office, a library, bars and restaurants. There are none of the designer boutiques or Michelin-starred restaurants that you find in the other homes of the 0.0001 per cent, such as Aspen in Colorado.

The secret of Atherton’s success is its location. It’s less than an hour’s drive south of San Francisco, home to Twitter, Uber, Airbnb and any kind of food or drink you fancy. The vast campuses of Facebook and Instagram are a mere 10 minutes away; 20 minutes or so further south are the headquarters of Google, eBay and Apple, as well as just about every big venture capital fund you might care to lunch with when you fancy going it alone and creating your own startup. The nearest beach is just half an hour’s drive away.

And then there are the houses. Oh, the houses! There are many exclusive communities that the elite have colonised in Silicon Valley, including Woodside and Los Altos Hills. But Atherton is by far the most sought-after location because the local development laws are lax by US standards. Homeowners can build higher and bigger than in most other towns and cities. Head off the main drag and drive up and down the oak-tree-lined avenues and, through the gaps in the high walls, you will see 12,000sq ft homes, many of them so big they are still under construction two years after work started.

The walls are tall for a reason. Having built an entire industry on harvesting our personal information and using it to sell advertising, as Google and Facebook do, the captains of the online revolution know the value of their own privacy. It’s not just the walls; there are the security cameras and the bodyguards that follow them. That’s normal in Atherton.

These tech billionaires have been known to demand that anyone who enters their home, including the odd relative or friend, sign a “domestic non-disclosure agreement”. These compel them to keep quiet about everything they see and do, from the food they eat to the details of a house’s floorplan, the styling of the garden shrubbery and the colour of the paint. It’s not just for privacy’s sake. Tech execs are desperate to disguise their wealth and opulent lifestyle because they face a growing storm of protest from ordinary families, who blame their fast-growing, fast-hiring firms for the spiralling costs of buying or renting a home in San Francisco and the surrounding Bay Area.

  • Atherton train station. Photograph by Mr Bernard Andre

Thanks to the rapid growth of tech firms, San Francisco has overtaken New York to become the most expensive American city to live in, with the highest rents. A study by Mr Brant Shelor, partner at consultancy Mercer, confirms the overall cost of living in the San Francisco Bay Area is now 41 per cent higher than the US average and seven per cent higher than New York.

Such obsessive secrecy has, unsurprisingly, prompted a backlash. One enterprising blogger decided to use Google to find out as much as he could about Mr Eric Schmidt. One of the things he found was his address, which he published because, as Google likes to say, “information wants to be free”. Mr Schmidt was not amused. 

You might think that Athertonians would be crunchy – environmentally conscious and liberal. California, after all, is heavy with Democrats: nearly 44 per cent of registered voters in the state lean left, compared with 29 per cent who support the Republicans. Ms Sandberg is talked of as a possible new Democrat leader. But Atherton bucks the trend. More than 40 per cent of residents are Republicans, compared with 32 per cent Democrats. And while Mr Elon Musk’s electric car startup Tesla is based in Palo Alto, just 10 minute’s clean-energy-fuelled drive away, on the street, the most popular car seems to be the Porsche Cayenne (for him) and the Porsche Macan (for her). 

Mr Tony Fadell, who created the iPod while at Apple and went on to found smart appliance startup Nest in Palo Alto, can often be seen driving through town in one of his supercars. “It’s my weakness,” he tells me. His current favourite is his Audi R8.

Another thing Atherton is not is cool. Sir Jony Ive drives straight past the town barely looking its way in his chauffeur-driven Bentley Mulsanne as he commutes each day at the $5bn new Apple headquarters that he helped to design. He lives in the swanky Pacific Heights district of San Francisco, where his neighbours include Oracle’s Mr Larry Ellison, PayPal founder and now adviser to President Trump, Mr Peter Thiel and Twitter CEO Mr Dick Costolo. (Actors such as Mr Nicolas Cage, who used to live here, have presumably been priced out.)

You get the feeling Sir Jony would get so bored in Atherton he’d either redesign the whole town to look like a giant iPod or turn to drink. San Jose’s Mercury News recently ran a local news story about “a woman whose finger got stuck in a drain who was reported to be conscious and breathing”.

There are stories, real ones, but people don’t much like talking about them. Between 2009 and 2015, eight local teenagers committed suicide by throwing themselves in front of trains. The deaths have prompted a behind-closed-doors (expensive doors) debate about the burden on high-school students in epicentres of over-achievement such as Silicon Valley. Many youngsters grow up with parents who have reached the apex of their professions and are determined their kids will follow suit. No pressure. It’s little wonder that the local industries booming alongside tech include counselling and sleep doctors. Money can buy most things, but not shut-eye, it appears.

The time has come for me to leave town. I decide to take the CalTrain back to San Francisco because traffic on the Interstate 280 north is a lava streak of SUVs. I ask a lady getting into her Porsche where the station is. She stares blankly. The railway station to catch the train back to San Francisco? “There’s a train?” she asks with no hint of irony. Like I said, they do things differently in Atherton.