Can Facebook’s $20 million housing project make a difference in East Palo Alto?
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A prime real estate corridor, and that's a problem for residents. Credit: Google Maps

A prime real estate corridor, and that's a problem for residents. Credit: Google Maps

Tech’s disruptive impact on housing, and what Silicon Valley can do in its own backyard

Facebook is investing $20 million for an East Palo Alto Catalyst Housing Fund to help bring more affordable homes and apartments back to the area.

Since lower-income residents have often been driven out of the gentrifying area to accommodate Silicon Valley’s big tech campuses, initiatives like this and Google’s Mountain View development projects worth $200 million in public benefits are meant to address concerns that living in the region is now beyond many locals’ means, including some of the companies’ own employees.

“Today, we’re announcing a new partnership focused on solving some of the region’s most difficult issues, starting with the creation of more affordable housing,” Vice President for Public Policy and Communications Elliot Schrage wrote in a blog post for the company. East Palo Alto isn’t the only community to benefit, but it is the one with the most pressing needs as it is the least developed part of the Valley, and may have a better chance of avoiding the gentrification that swept other communities in the past. Facebook has plans for big growth, and residents are understandably worried.

While East Palo Alto remains relatively affordable compared to some of its neighboring towns, that is changing because of the desirable location: US Route 101 runs through it, linking Facebook and Google’s massive campuses together with little else in between to hold back the development of new commercial and residential spaces for those titans.

West of Google, east of Facebook

East Palo Alto – literally the other side of the tracks (well, creek) from wealthier Palo Alto – has a long, hardscrabble history. In a long essay for Tech Crunch, Kim-Mai Cutler noted that the historically underserved community “is the last 2.5-mile stretch of affordable housing in the heart of Silicon Valley,” with neighboring Palo Alto having median housing prices 4 times that of the community.

(At least last year, that’s where the gap stood. It is closing, and fast.)

Housing policies, according to the activist group Palo Alto Forward, a coalition of old and new residents alike, need to be updated to allow for less onerous commercial zoning, smaller units, and mass transit-friendly options. “We are on the path to being a city composed only of long-time landowners and wealthy newcomers,” the organization warned last year, as the lots that those older residents now occupy are worth far more than the buildings on them.

Facebook's Menlo Park campus in 2012. Credit: Facebook

Facebook’s Menlo Park campus in 2012. Credit: Facebook

Facebook has faced criticism before over housing issues. The company’s presence in Silicon Valley, like other tech companies, has changed the economic landscape greatly, often to the disadvantage of lower-income residents. In September, for example, The Guardian reported on how these people are being priced out of apartments as building owners vie to land higher-income tenants who work for Facebook et al. by “rebranding” the buildings. In response to such complaints, the fund will offer assistance to people facing eviction as prices go up.

Can you even live here?

All around the Valley, these problems crop up. The housing crisis gained even more salience this month because a fire in Oakland left dozens dead in an unlicensed residential/event space. That the venue was not legally open to the people living and working there made little difference, as it was for many a last resort.

The Wall Street Journal found that a lot of city workers, including police and firefighters, can’t afford to live in the places they patrol near the tech campuses. And Woodland Park, where many of these companies’ non-tech facilities and service workers live, is, according to Bloomberg, a place where “rents soar and wages stagnate,” while affordable housing disappears.

Silicon Valley is not unique in this regard, but the disparity between low- and high-income workers is very obvious. “Disruptive” and “eviction” are not a pairing the industry wants to be associated with, and earlier this year Facebook already announced it would add 1,500 units of general housing to Menlo Park residents, with 15% set aside as affordable low-income space.

Of course, the tech companies get back more than just goodwill and tax breaks. As Palo Alto Online reported last year, “Google’s Davis White estimated that up to 300 to 400 affordable homes could be built on the Middlefield Road site, but the city would have to allow Google to build 10,000 square feet of additional office space for every additional unit.”

Google's vision for Mountain View. Image Credit: Google

Google’s vision for Mountain View. Image Credit: Google

And for all the effort Facebook or Google put into education – Facebook’s new fund has set aside $625,000 for that, to start – a lot of the jobs the tech companies have created in the service sector aren’t lucrative enough for workers to cope with those property pressures.

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