Housing not keeping pace with Apple’s rapid growth
When Steve Jobs unveiled plans for Apple’s new Cupertino campus seven years ago, he touted its curved glass and futuristic “spaceship” look — and how 12,000 employees could finally occupy a single building.
Missing from his presentation was where those employees would live.
As workers begin to move into Apple Park, the absence of an accompanying residential building boom is stirring angst.
Apple, which reported record quarterly revenue of $88.3 billion Thursday, did not say how many of its employees live in Cupertino, a city of just over 60,000. But many do not, and residents fear out-of-control traffic is disrupting its smalltown character and wonder where new recruits will live.
In 2016, the most recent year for which figures are available, Apple had 25,000 employees in the Bay Area. And it continues to grow. On Thursday, Apple
had more than 2,000 local hardware and software engineering jobs listed on its website.
Silicon Valley technology giants are under increasing pressure by employees and officials alike to construct housing to offset their rapid hiring. From 2010 to 2015, the region added 367,064 jobs but only 57,094 housing units, according to a 2017 report by the Silicon Valley Leadership Group and the Silicon Valley Community Foundation.
Making housing the responsibility of employers may seem like a throwback to the age of company towns, which faded away in the 1920s as more workers got their own automobiles and didn’t have to live near factories. Now it’s “a new set of rules because of the emergency situation of our housing conditions,” said Dowell Myers, a professor of policy planning and demography at University of Southern California.
In its agreement with Cupertino to develop Apple Park, the company paid $5.85 million into an affordable housing fund — double what was required by the city. It also invested $75 million to improve infrastructure and ease traffic in several nearby cities. But housing advocates say the company can do so much more, especially now that it is expected to bring back more than $200 billion in cash from overseas accounts, thanks to favorable treatment under the new federal tax law.
“It does stand out that they haven’t done as much as other companies here,” said Kevin Zwick, CEO of Housing Trust Silicon Valley, which supports affordable housing projects.
Consider this: Apple sold $5.9 billion in iPads in the most recent quarter — 1,000 times its local affordable-housing commitment.
No tech giant has provided more than a tiny fraction of employees with housing, but Google and Facebook have made more substantial gestures. Both have discussed building housing on campus. Facebook gave $20 million to a community partnership to support affordable housing.
Mountain View approved plans in December to add nearly 10,000 housing units near Google headquarters. A Google office project in San Jose would have housing nearby under current plans.
LinkedIn, headquartered in Sunnyvale, has invested $10 million in Housing Trust Silicon Valley’s fund that gives loans to affordable housing developers.
Apple said its infrastructure investments “benefit our neighbors.”
“Long before we even broke ground on Apple Park, we have been connecting with our neighbors and doing our best to address their concerns,” the company said.
Some observers say there isn’t much Apple can do in Cupertino. As elsewhere in the Bay Area, some residents oppose dense housing, an attitude often labeled NIMBY, for “not in my backyard.”
Responsibility for the housing shortfall lies, in the end, with the cities, which approve the development plans of companies such as Apple, said Matt Regan of the Bay Area Council, a business-sponsored public policy group, which counts Apple as a member.
“You have to point fingers and blame at cities before pointing blame at the companies,” Regan said.
Last year, construction began on just 135 apartments in Cupertino, according to Co-Star Group, a firm that tracks real estate data. Mountain View, by contrast, had more than 1,000 units under construction last year for its population of more than 80,000, Co-Star said.
Real estate development firm KT Urban faced criticism last year over its plans to redevelop a Cupertino shopping center — adding 270 housing units, as well as other amenities — after some residents questioned what it would do to traffic. The firm pulled the project from consideration last month.
Cupertino plans to add just 1,064 housing units by 2022. So far, it has approved only three projects on a list to meet that goal, which would add roughly 800 units.
When the city of Cupertino and Apple signed the Apple Park agreement, housing on site wasn’t part of the deal.
Apple owns or leases about 68 percent of Cupertino’s office space, according to Co-Star. That dependency put the city in an awkward position — if it pushed Apple too hard, the company could have moved elsewhere.
“We’d like to stay here and pay taxes,” Apple co-founder Jobs said in 2011 at a Cupertino City Council meeting, where he pitched the Apple Park project shortly before his death. “If we can’t, we’d have to go somewhere like Mountain View and we’d take our current people with us,” he warned. “That wouldn’t be good for Cupertino and not good for us, either.”
Now that Jobs’ spaceship has been built, it doesn’t seem like Apple is going anywhere. The gleaming ring has brought some benefits to Cupertino. A visitor center has drawn tourists eager to get a look at it. Hotels are planned nearby, to cater to workers and suppliers paying a visit to the mother ship.
Even so, Apple has announced plans for a second campus outside the Bay Area for tech support employees. That will ease the pressure on the local housing market — but it highlights that an expanding economic contribution from Apple isn’t a sure thing.
For a glimpse of the problems Cupertino is facing because of the giant company that calls it home, just look at the schools, which have ranked high in academic performance tests. Hurt by rising housing costs, K-8 enrollment in the Cupertino Union School District expected to drop by more than 1,000 students in the next three years, according to a recent report produced for the school district. Workers with young families can’t afford homes there.
Some residents in Sunnyvale’s Birdland neighborhood, which borders Apple Park, have hard feelings toward the company. Iris-Ann Nelson said she heard heavy-duty noise of jackhammers, digging and trucks roaring by throughout the day during construction. Even with the project mostly finished, she recently heard a high-pitched whining, metallic noise almost like an appliance turned on high at 1 a.m., which she believes came from Apple Park.
“I’m just tired of being lied to that it’s wonderful,” said Nelson, who decided to buy a Google Pixel 2 last year instead of upgrading her iPhone. “It’s not wonderful for people who have to put up with the inconvenience.”
Other residents fear traffic will spread to side streets when employees finish moving into Apple Park.
Already, “the number of cars on Homestead and Wolfe (roads) alone has gone up,” said Charlin Yamamoto, 39.
Apple said it has worked with residents to address their issues.
David Brandt, Cupertino’s city manager, said he hasn’t seen much traffic impact from Apple Park. Roughly one-third of Apple employees commute to work through “alternative means” such as bikes and buses, according to a city document.
Councilman Barry Chang said the city should have pushed harder in negotiations to give the company more responsibility on transportation.
“The problem is not Apple, the problem is the city,” Chang said. The company is paying for a traffic impact study, but Chang said he would have liked to see it also support a flyover freeway ramp that would have helped direct traffic to the campus.
There are some glimmers of hope for building more homes near Apple Park. A community meeting Monday will discuss the future of the Vallco shopping mall, where housing is being considered.
Myers of USC believes Apple should consider investing in the project. But will it?
“The city can’t make Apple do anything,” he said.