Tech Companies Like Apple And Facebook Are Putting Billions Of Dollars Toward Affordable Housing, A Crisis They Created
It’s no hidden secret that affordable housing has become a growing crisis on the West Coast. Cities like San Jose, San Francisco, and Seattle have all seen tech giants come into communities and play a big role when it comes to the huge spike in the cost of living. While Apple, Facebook, Google, and Amazon have contributed to economic success in these areas, there is a large portion of middle and lower-class residents, mostly Latino and Blacks, who aren’t seeing any of that growth. With an increasing number of tech workers coming into these cities, rising home and rent costs have followed. That in return has created a housing crisis for many.
In recent months, these tech companies have finally spoken up about the problem by pledging to spend money on building affordable housing in their respective communities. Back in June, Google announced $1 billion while Facebook pledged another $1 billion in October. Apple, earlier this month, said it would devote $2.5 billion. Yet there is increased skepticism and concerns that throwing money at this issue won’t solve anything.
Tech companies like Google and Amazon have brought in billions of dollars in local tax revenue in cities like San Jose and Seattle. But that success has also created a housing issue for many that can’t afford to live there anymore.
The rise of these giant tech companies has also meant a rise in the cost of living in the nearby cities that they’re located in. That is evident when looking at the economics of the housing markets and the number of people moving into these communities. Over the last decade, there was an 8.4 percent increase in the total population of the Bay Area, which includes San Francisco and San Jose, but during that same period, the number of housing units grew by less than 5 percent.
Even as new homes are being built, the prices have become more of a reflection of the new demographic coming in. According to NBC, “Software engineers earn a starting salary of about $160,000 at Apple, Google, and Facebook, 40 percent more than the national average for the same job.”
Many middle-class Latinos and Black families have struggled to find affordable housing in these tech cities and as a result, many are now homeless.
The sight of homelessness and giant RV’s parked on city streets has become an image too familiar in San Jose as many have turned to living out of their cars. In the Bay Area, the issue of homelessness has only been expedited by the rise in home and rent prices which can be attributed to the tech industry in the area. As of now, the Bay Area has the third-largest population of people experiencing homelessness. Ahead of it is New York and Los Angeles, with Seattle just behind.
What has become evident is that one specific population of people is benefitting from these economic and social gains while others has been somewhat been forgotten. Tamara Mitchell, a volunteer at the Coalition on Homelessness in San Francisco, is one of those that feels like the city has turned it’s back on people like her.
“It kind of feels like they’re pushing you out of your home,” Mitchell told CNBC. “We’ve been homeless, we’ve been staying in hotels, we’ve been staying with family members – it’s been a lot.”
Making matters worse is the lack of opportunity for some when it comes to those trying to gain from the economic benefits in the area. When it comes to hiring, the most common demographic tech companies hired in 2018 were white and Asian male-identified individuals. Last year, Google employed 95 percent white or Asian individuals and 74 percent of those hired were male. The same trend followed at Apple as the same figures came in at 84 percent and 77 percent, respectively. In return, this has left most of the remaining jobs as lower-wage positions with limited opportunities with the majority of these roles being taken by Latinos and Blacks.
“We’re being ignored,” Liz González, a contributor at Silicon Valley De-Bug, told CNBC about rising concerns of Google in the Bay Area. “We’re being displaced, and folks who have no long term interests in this community get to decide what it looks like and who gets to live here.”
As these tech companies have made a commitment to try and address the affordable housing crisis in their communities, many wonder if it’s enough or too late altogether.
As the more than $4.5 billion in corporate contributions towards affordable housing has been announced, money still may not be enough to fix the problem. Experts say addressing issues like rewriting zoning and permit regulations from local governments, building various housing options besides single-family homes and public transportation alternatives.
What these tech companies have also realized is that retaining and attracting new employees will become an increasingly prominent issue as housing and rent prices continue to soar. While there is skepticism that affordable housing in the Bay Area and Seattle can be fixed in the near future, some are relieved to finally seeing tech companies acknowledge that there is a problem.
“I don’t think any tech company that has made these new announcements are really thinking their single contribution is solving the housing crisis,” said Kevin Zwick, CEO of Housing Trust Silicon Valley, told CBS. “It doesn’t solve the entire problem, but the fact that they’re joining is a big, important, positive step to getting us to solve the crisis.”