Big investing for Bay Area housing

Big investing for Bay Area housing

Tech giants have pledged financial support for affordable housing amid criticism over soaring prices. 

The generation that grew up as working class inhabitants of San Francisco are long gone. Ever since the city became the center of America’s thriving tech industry, it has boasted some of the highest housing costs in the US. Homeownership is in retreat and homelessness is surging alongside the fortunes. 

The growing backlash against the disparity has played out in arguments over new taxes targeting tech companies and protests against the commuter buses that ferry workers south from San Francisco to Silicon Valley, where many tech giants have their headquarters.

Yet little by little, there are signs of change–or at the very least, a political response to the backlash. 

In June, Google said it would invest $1bn in housing and Facebook has recently done the same. Apple upped the ante just this month, saying it would devote $2.5bn to the issue.

“We know the course we are on is unsustainable,” Apple boss Tim Cook said as he revealed his firm’s plans to support affordable housing. 

Apple will spread its money out in a number of ways, including a pledge to lend the state of California up to $1bn to help finance affordable housing projects and provide $1bn to support the state’s first-time homebuyer fund..   

Those moves followed a flurry of smaller donations and activity from firms such as Cisco and Microsoft, which said it would invest $500m in housing in its home state of Washington.

Before and after 

As the tech industry has boomed over the past decade, home prices and asking rents in the Bay Area have roughly doubled, becoming by many criteria the highest in the US.

Last month, the San Francisco Association of Realtors said the median home price in San Francisco had hit $1.4m. The average asking rent exceeded $3,200 per month, according to research firm Moody’s Analytics-Reis.

Wages in the area have increased as well, but not as fast as housing costs.

The commitments by the tech giants represent a “kind of acknowledgement from the tech industry that yes, they’re playing a role in this housing affordability crisis,” Jeffrey Buchanan from Silicon Valley Rising, a coalition of tech workers, community organizers, and labor organizations, which has been campaigning on such issues for years, told the BBC.

“I’m hopeful that it is a change in mindset in the industry… the old way doesn’t work.

But California State Senator Scott Wiener, whose district includes San Francisco, said publicly that the plans represent little more than a drop in the ocean given the sheer breadth of economic disparity involved. 

“I’m glad that Apple, Facebook, Google are doing this, but I think we also have to be crystal clear that this is not going to solve the problem,” Wiener claimed. 

2019-11-22T19:29:46+00:00

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Paul Imison
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