FACEBOOK TO INVEST $20M IN HOUSING AS SILICON VALLEY FACES CRISIS
Many families have hard time amid tech boom
SAN FRANCISCO Facebook is putting up $20 million toward a community investment program designed to address the severe housing crunch in its own backyard, where the tech boom stoked by the latest generation of Internet superstars is making it difficult for many working class families to live.
It is partnering with Envision Transform Build-East Palo Alto (ETB), a coalition of Silicon Valley community groups, and the neighboring cities of East Palo Alto and Menlo Park to create affordable housing and provide economic opportunities in the form of job training and expand legal relief to tenants.
The social-networking giant is making an initial investment of $20 million, and said it hopes to add private and public sector organizations to the partnership.
The plan attempts to address the decades-old problem of insufficient housing, particularly affordable apartments and houses, that’s worsened as the latest surge in tech jobs — most average more than $100,000 a year, based on data from the federal government’s Quarterly Census of Employment and Wages — has driven up average home prices and rents.
“There is a housing crisis in Silicon Valley. There is a traffic crisis in Silicon Valley,” says Elliot Schrage, vice president of global communications, marketing and public policy at Facebook. “We want to keep tech jobs in Silicon Valley.” If successful, Facebook’s effort could extend to a broader effort by tech companies, says Annel Aguayo, development director at Rebuilding Together Peninsula, one of Facebook’s partners in the project. “They care about being a good neighbor, which we don’t usually see,” she says. Non-profit Google.org has donated more than $6 million the past two years to anti-homelessness causes, including Destination: Home, a program of The Health Trust, a public-private partnership to end homelessness in Santa Clara County. The problem: Plentiful highpriced jobs and very little new construction in an area constrained by water, mountains and towns that often resist efforts to put in more affordable housing units.
While half a million new jobs have been filled since 2010, only 55,588 units of housing have been built in the state, according to the California Department of Finance and the Metropolitan Transportation Commission, a regional planning organization.
The median price of a single-family home in San JoseSunnyvale-Santa Clara, the heart of Silicon Valley, has jumped from $780,000 in 2013 to $950,400 last year, according to the National Association of Realtors.
East Palo Alto Mayor Donna Rutherford expects to see more housing in the economicallychallenged city within a few years despite its water constraints. Rich Cline, mayor of abutting Menlo Park, say both cities will benefit from shared community services and programs for housing and traffic.
The program comes as Facebook is outgrowing its Menlo Park campus. It plans to add a 513,000-square-foot, Frank Gehry-designed building in 2018. It employs 15,724 globally, with many in Menlo Park, compared with 11,996 a year ago, and is expected to grow.
The fast pace of tech job growth has led to skyrocketing rents — San Francisco, San Jose and Oakland are three of the four most-expensive U.S. cities to rent in, according to according to Zumper’s National Rent Report for December — and the median price of a single-family house in San Jose in the third quarter topped $1 million for the second straight quarter, says the National Association of Realtors.
“I laud Facebook and am glad they’re doing something,” says Tameeka Bennett, executive director of Youth United for Community Action in East Palo Alto. “But we’ve reached out to all businesses in the community over the years. There needs to be education among them about housing.”