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'Flexing their power': how America's richest zip code stays exclusive

 If fences make good neighbors, then Atherton, California should be full of good neighbors.

In America’s most expensive zip code, an abundance of wrought-iron fences, sturdy brick walls and towering hedgerows abound. Some gated mansions sit in gated neighborhoods that sit behind barricades of large oak trees – veritable fortresses fortified with everything but a moat.

The exclusive town of 5.6 sq miles has been the priciest place to live in the country for four years running. But the residents of Atherton will be first to say that their little leafy community at the heart of Silicon Valley – home to tech billionaires, venture capitalists, the former Google chief executive Eric Schmidt, the former deputy British prime minister Nick Clegg and the Fox News populist Steve Hilton – does in fact have good neighbors. For all the wealth, they say – median home prices and home sales ranging between $7m and $8.65m and a median household income of $525,000 – the community doesn’t flaunt its money. Residents drive Teslas instead of Lamborghinis, take nice vacations instead of living ostentatiously. This is no Bel Air or Beverly Hills, they say, but a sleepy suburb like that out of The Andy Griffith Show.

“Yes, the vast majority of people have worked very hard and been very successful,” said Steve Seabolt, vice-president of the Menlo Circus Club, a private social club in Atherton that includes an equestrian center, pool, and tennis court. “People are friendly and warm. And compared to a lot of other communities, it’s remarkably understated. You don’t see a lot of Rolls-Royces or Bentleys. That’s just not how people live.”

But there’s a reason why Atherton has remained pricey – and that’s by being a not-very-good neighbor to the rest of California. According to housing advocates, the town has set up legal boundaries to remain exclusive and put up obstacles against efforts to build affordable housing during a statewide housing crisis.

“Atherton is the most expensive zip code in the country because they have designed themselves to be that way,” said Jordan Grimes, a housing advocate on the San Francisco peninsula. “There aren’t literal gates. They aren’t literally a gated city, but they are metaphorically a gated one and they have done that by zoning. Many, many cities in the country do zoning in this way, but Atherton is what you could say is the most successful in using zoning to keep out anyone who is not wealthy or white.”

Historically, much of the San Francisco peninsula, where Silicon Valley giants have built their headquarters, served as country estates for the San Francisco monied class. Wealthy families would spend their summers on the peninsula, where the weather is typically warmer than the gray “Fogust” and “June gloom” of the city, and patriarchs would take the train down to join them on weekends.

Thomas Selby, a San Francisco mayor, owned a 420-acre estate called Almendral on the land before Atherton was even a town, where he would serve 17-course dinners that would run from 6pm to midnight. James Flood, who made his fortune on a Nevada silver mine as one of the “Bonanza Kings”, had his extravagant getaway mansion of Linden Towers in a neighborhood now known as Lindenwood. The town’s namesake, the businessman Faxon Atherton, purchased his 640-acre estate, Valparaiso Park, for $10 an acre in 1860, and 63 years later, Atherton became incorporated as a town.

“It’s different to an extent today,” Grimes said, “but that heritage has remained in places like Atherton. That mindset and history have remained.”

In a town of just over 7,100 residents, the population is 73% white. No commercial zoning exists within town limits, meaning there are no restaurants, cafes, shops or grocery stores. The town is almost entirely residential – just 5% consists of parks and open space, and 6% of public and private schools and municipal facilities like the police department.

And of the 89% of the town that is residential, Atherton is zoned only for single-family homes on a minimum lot requirement of one acre. In a state where land is expensive and housing is scarce, the town’s zoning and one acre-lot requirement have all but guaranteed that only the wealthy can afford to build and live in Atherton.

California has a mandate called the regional housing needs allocation that requires all cities to create housing for people of all incomes, from very low to above-moderate income. In November, George Rodericks, Atherton’s city manager, drafted a letter to the Association of Bay Area Governments asking that the planning committee reassess its allocation methodology. His argument was that the methodology “relies heavily on proximity to jobs as a factor” and Atherton’s “long-standing character is as a residential community”.

While he had a point – Atherton has no land zoned for commercial activity – the number of landscapers, contractors, plumbers, electricians, painters, and cleaners who inundate the town limits to service the various mansions during the workweek is a wonder of its own. On a recent Thursday, so many pickup trucks of landscapers and contractors lined Atherton Avenue that a taco truck and a pupusa truck parked along the stretch to feed the workers.

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