Facebook fund backs nearly 600 affordable homes

Facebook’s first housing fund has backed nearly 600 units of affordable housing on the peninsula, the social media giant said Thursday — providing an update on the program’s progress for the first time since its launch four years ago.

Through a series of loans and grants, Facebook’s Catalyst Housing Fund is helping developers build, rehabilitate or preserve about 550 units of affordable housing near its Menlo Park headquarters — 70% of which are reserved for residents in the region’s lowest income brackets.

The fund started with $18.5 million from Facebook, which fund manager Local Initiatives Support Corp. (LISC) has since used to raise an additional $28 million in outside loans. Now Facebook says the pilot program, which was an early attempt by the company to help fix a housing scarcity problem exacerbated by tech industry jobs, is well on its way to backing 750 homes by 2022.

“We’re getting new homes built. So the proof

is in the pudding,” said Menka Sethi, Facebook’s director of location strategy and site optimization, who oversees the company’s housing efforts. “It’s working.”

Before it was common to see Silicon Valley tech companies ponying up money to fix the housing crisis — before Facebook and Google each pledged $1 billion to the cause, before Apple one-upped them both by pledging $2.5 billion, and before Housing Trust Silicon Valley launched its TECH fund to court corporate investments in housing — Facebook dipped its toe in the water with the Catalyst Housing Fund.

The fund launched in 2016 after a community group threatened to sue the tech giant over the expansion of its Menlo Park headquarters.

Since then, the fund has

backed projects including Light Tree Apartments in East Palo Alto. The Catalyst Fund provided $4 million to rehab the 50-yearold development and expand it to house nearly three times as many people.

That $4 million was the first funding the project — which will be about 150 units when complete — received. And while it may not seem like a lot for a project with a total price tag of more than $150 million, the initial investment is always the most important, and the hardest to come by, said Daniela Ogden, vice president of communications, advocacy and fund development for developer Eden Housing. After that, the rest of the financing started flowing.

“Without this,” she said of the Catalyst funding, “I don’t know if Light Tree would be getting the rehab and the more units we desperately need.”

The Catalyst Fund also backed Casa de Sobrato in Redwood City. Facebook

dollars allowed the nonprofit St. Francis Center to purchase the 50-unit building, renovate it and turn it into affordable housing.

And Catalyst funding went to a 130-unit affordable housing complex planned for construction in East Palo Alto, and a 24-unit low-income development planned in San Carlos.

Because it was the company’s first attempt to wade into the complex world of affordable housing development, the Catalyst Fund taught Facebook a lot about the housing crisis, Sethi said.

“The hardest part of the Catalyst Fund has been finding the projects to fund,” she said. “Which speaks to the need to approve more housing faster. And to see that play out live through our own funds when there is such great need, I think that has been the biggest eyeopener.”

That proves companies cannot solve the affordable housing shortage with money alone, Sethi said.

To make a real dent in the problem, policies need to change.

Facebook’s next step will be to get more involved in the policy side, Sethi said. The company is supporting housing bills in the legislature this session, but she declined to specify which ones.

“We’re getting a lot of feedback that we need to be more vocal about the need for system change. It’s an area where employers generally don’t weigh in, and I think it speaks to the magnitude of the crisis,” Sethi said. “We’ll have a lot more to come on that in the coming weeks.”

Sethi also promised updates soon on Facebook’s other housing efforts, including more details on how it’s spending the $1 billion it pledged to the crisis last year.

In the meantime, the Catalyst Fund is poised to make a big difference to people like 41-year-old Uheina Brown, who lives in a three-bedroom apartment in Light Tree Apartments

in East Palo Alto.

Brown, who has lived there 14 years, is grateful for the subsidized housing — through which Brown and her husband to pay no more than 30% of their income in rent. That’s allowed Brown, who worked in childcare before the pandemic, and her husband, who drove a shuttle for a Holiday Inn near the San Francisco airport, to keep a roof over the heads of their four children.

But the development, built in 1966, is in desperate need of a renovation, Brown said. Peeling paint, dated kitchen appliances and a moldy bathroom are just a handful of ways her apartment is showing its age.

With the Catalyst Funding, the development is slated for a remodel — and Brown will be guaranteed a chance to move back in once the work is complete.

“I’m very excited,” she said.