Can Big Tech Curb A Housing Crisis It Helped Cause?

In San Francisco, the number of people
living in their cars or on the streets increased by 17 percent
over the last two years. Officials say the lack of affordable
housing is the main factor. People who are leaving California, it’s
because they can’t afford it anymore. Affordable housing has become a crisis
on the West Coast, due in large part to the expansion
of the tech industry. The people that are thriving in Silicon
Valley are working in tech fields or fields that are supporting tech. Recently, these major tech companies have
pledged money, like Google’s $1 billion investment into the Bay
Area, and support, like Amazon’s construction of a homeless shelter
into their downtown Seattle campus. These measures are meant to curb
the affordable housing crisis in their communities, but it has left some
community members wondering if they’re doing enough, and if it’s
too little, too late. Do you know how many times I’ve lost
everything I own, and start from the bottom , build myself up, and
for whatever circumstance, find myself homeless again. That’s what
I’m facing right now. The Bay Area, which includes major cities
like San Francisco and San Jose, has the third largest population
of people experiencing homelessness in the U.S. behind New York
City and Los Angeles. Seattle comes in at number
four in the U.S. In the Bay Area, sixty seven
percent of those individuals are unsheltered. And in Seattle, 47
percent are unsheltered. And this crisis disproportionately affects
people of color and individuals over the age of 25. There is not enough housing in the
state of California, especially in the Bay Area, and it’s affecting
whether people can live . It tears apart families , tear
apart churches, tear apart communities, forces people to move, takes
people out of … takes children out of school. We need more housing. The region can’t
stay the way that it is. The region has to change. We’ve been homeless. We’ve been staying in hotel. We’ve been staying
with family members. It’s been a lot. We’re being ignored. 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. I’ve been working with the Homeless Coalition
for a very long time, just on my own. People are allowed to
come over here and get newspapers and the newspapers is basically about what’s
going on in the community. And they’re able to sell it
and the profits go to them. Organizations like these are working to
help residents who have been affected by the housing crisis. And even though it’s worse than ever, it’s
not a new problem to the area. As long as I’ve lived here, and that’s
30 years, people have said all the housing is just out of control. It’s it’s no longer
connected to reality. This can’t continue. This
can’t possibly continue. And yet here we
are. It’s still happening. What’s happened most recently, though, is
that now we’re referring to it as a crisis. I had a duplex along with
my dog, my favorite companion Navarro. Lived there for fifteen years
before I found myself displaced due to the tech boom here in San
Jose and the greater Silicon Valley area. The rise of Silicon Valley brought huge
prosperity to the Bay Area, but the influx of tech workers
has brought huge ramifications, too. Before there wasn’t like Twitter and
there wasn’t all these different billion dollar companies, and now that
they’re moving in, they’re pushing us out . Here in San Jose, it’s
very interesting because tech grew up in our backyard. So we’ve seen the various
cycles, the booms and busts, and our families have been affected by those
ups and downs of the tech industry. The growing number of tech
workers created a housing shortage in the Bay Area, with an 8.4 percent increase in population and less
than a 5 percent increase in housing units between 2010 and 2018. The increasing salaries of these
tech workers created staggering housing prices, with software engineers making a
starting salary of about $160,000 annually at Apple, Google and Facebook,
40 percent more than the national average for the same job. Rent prices in the Bay Area increased
21 percent from 2010 to 2017 when adjusted for inflation. For context, in that same time period,
rent prices in New York City increased 9 percent. These were major contributing factors to
the Bay Area’s housing crisis. A lot of jobs , they pay well, but
the way the rent is setup, I still don’t believe that you can
make enough to live comfortably. You’re basically working to pay
the rent and that’s it. My family has been displaced to
other cities, friends to other states where they , they
can afford the rent. So this displacement is
not something new. But with the arrival of
Google, it’s just exacerbated. And people are more fearful because they
really think they don’t have a chance. In 2018, Google was given the
green light from the San Jose City Council to start development
of its second headquarters. It purchased a total of 50 acres
near the Diridon station in the city’s center . When the city sold the land
to Google in December of 2018, there were hundreds of young people,
especially, that were protesting, speaking out. The mayor actually had dozens of
people escorted out of the chambers because they were
complaining about it. And finally, a group of eight
people chained themselves to their seats. This backlash supposedly prompted Google to
offer up an investment into affordable housing in the Bay Area. It pledged one billion
dollars in 2019. That’s one of the things that people say
is maybe a reason for why they gave that billion dollars because
they were facing pushback from residents. Now, this expansion is going
to directly affect the downtown area. But housing costs and the cost
of living is going to raise throughout San Jose. It’s going to have a ripple effect,
and in fact, you know, rents have already increased. A week after Google’s campus was
approved, housing prices within a three mile radius of the planned construction
went up 7 percent . Within six months, housing prices
had jumped 25 percent. Much of the media attention has been
around San Jose with the announcement of Google’s new campus. But Google is not the only
reason for displacement in the area. Apple, Google and Facebook, they have
rapidly expanded and snapped up real estate here and there over
the last several years. So it makes it harder for other people
to be able to flourish in those areas, and it means that more of
their employees are buying up the housing and they’re getting paid significantly more
than people who are already living there. So it means that
it’s mostly reserved for them. Basically, tech workers come to these
cities with large salaries and purchase or rent housing at seriously
inflated prices, making it hard or even impossible for those lower income
natives to find housing for themselves or stay in the
housing that they have. That coupled with the fact that
population growth in these cities outnumbers the construction of new housing
units, has made life in these major tech cities hard
for non-tech employees. We do stay in a car. Most of the time I’ll park it on
Treasure Island, most of the times I park it on, close to my mom’s house so
that I’ll be able to still take my children to school and
things like that. The median home price in the
Bay Area is about 1.2 million dollars. In Santa Clara County and San Mateo
County, it’s even more than that. It’s upwards of 1.3, approaching 1.4 million dollars. These are the highest housing
costs in the nation. San Francisco has seen this price hike
for the past decade, with home values nearly doubling from $703,000
in January of 2010 to $1.37 million in January of 2019. San Jose has seen a similar jump,
with home values rising from $511,000 to $1.08 million from January
2010 to January 2019. There’s been a lot of pent up pressure
that’s come out pretty well in the media about jobs and tech growing
faster than the regional infrastructure. If you look carefully at the city
of San Jose’s general plan, which is supposed to be between now and 2040,
their goal is to bring in 382,000 jobs and at the same time they
want to restrict housing production to 120,000. I sort of see it as a simple problem. Supply, demand. That’s, it’s pretty much that simple. So we have this incredible economy. It is churning out jobs still to
the present day, we’re creating thousands upon thousands of jobs, it’s the
tech sector that’s driving it. And so we’re a
very successful economy. We’re not creating housing to
keep up with it. They’re making it very difficult for people
who’s been here for a very long time to live here. So it kind of feels like they’re
pushing you out of your home. Few would argue that job growth is
a negative prospect for a community, but not only our community members
angry that there isn’t enough housing, they’re also concerned about who will
be prioritized for these new jobs. We’ve had years of STEM education
or programs that would eventually lead you into tech. But our communities, people
of color, still don’t end up in positions at many levels
in the tech industry. For U.S. based tech-related jobs in
2018, Google employed 95 percent white or Asian individuals and 74
percent male identified individuals. Apple employed 84 percent white or
Asian individuals and 77 percent male identified individuals. Facebook employed 93 percent white or
Asian individuals and 78 percent male identified individuals. And a high percentage of these tech
employees live and work in the Bay Area. However, according to estimated data
from the Census Bureau in 2018, the Bay Area is home to
67 percent white or Asian individuals. Tech companies are disproportionately hiring
white and Asian male identified individuals for tech jobs, leaving
lower wage jobs for mostly black, Hispanic and
Latin next individuals. We see where they have diversity ,
basically in service section in the cafeteria. Most of these companies need
service workers to operate their big campuses, and that includes
everything from cooks, cafeteria workers to contractors who make significantly
less than full-time employees, and they are the ones at
risk of also getting displaced. So you have the highly paid
workers in Silicon Valley continuing to flourish. Meanwhile, we’ve seen the middle
class just erode on us. So all of those mid
range professions have disappeared. They’ve just left the economy. And so we’re left with a very high
earners and very low earners and not much in between. There are some
benefits to these expansions, though. There are still people who
are excited about Google coming. And I think they’re getting a little
bit more excited about it now that Google’s laid out a plan and they’ve
said they’re going to actively try to listen to that community . That’s been ongoing through the years in
San Jose is the failior of really for San Jose to develope a retail
footprint in the downtown San Jose, it’s always been a story of revolving
stores and vacant storefronts and office fronts. And so that’s one of the
reasons why the city’s leadership is so excited about this Google expansion. But to these community members, the
benefits don’t outweigh the costs. So there are some good things, but
they’re eclipsed by the concerns of people who live nearby and who are
worried that they themselves will be displaced once Google does get there. What a lot of people don’t think
is just the psychological impact when you live paycheck to paycheck or social
security deposit to social security deposit, you have that displacement that
just the stress itself is overwhelming. And the Bay Area is
not alone in its housing crisis. Seattle is our mini me. Everything
happening here is now happening in Seattle. They’re just there a cycle,
maybe two cycles behind us. In Seattle, we know that a $100
increase in rents, 15 percent of the people in the city will lose their housing
and 32 percent of the people in the suburbs. It’s very frustrating
to think that you’ve gone your whole life here and then
it’s like they’re saying, oh, we don’t want you here because you don’t
make a certain amount of money. So we’re gonna make this more
expensive so you’ll just leave. Tech companies are realizing they need to
contribute in some way, so they have done so in
the last several months. In a blog post, Google’s CEO
explains the company’s $1 billion investment over the next 10 years will re-purpose
at least $750 billion of Google’s land, most of which is currently zoned
for office or commercial space as residential housing. This will enable us to support the
development of at least 15,000 new homes at all income levels in the
Bay Area, including housing options for middle and low income families. At Facebook, we’re very thoughtful about how
and where we grow, and we want to do what we can to ensure
that the regions are set up for success to scale the infrastructure
along with the jobs. And so housing is at
the nexus of that. Apple is giving $2.5 billion to the cause, and in
Seattle, Microsoft is chipping in $500 million. And neighbors Amazon have opened
a homeless shelter in their downtown campus. We created this plan where we knew
that it was possible that no child would have to sleep
outside in our community. And with Amazon coming alongside us,
it elevated those families voice. It really was the advocacy we needed
in this community for others to recognize that children were sleeping at the
end of quiet cul de sacs in their car, that they were in the
back of U-Hauls with their parents because it was cheaper to rent a U-Haul
than it was a hotel room where they were sleeping in public
storage units or in tents. Mary’s Place, a homeless shelter for families,
was given a new space built right into Amazon’s renovated
downtown Seattle campus. Mary’s Place is not owned by Amazon. It is a
separate non-profit organization. But Amazon has provided the org with
space and has pledged to pay its bills for the foreseeable future and
will continue to gather partnerships to further support Mary’s Place. And that has driven us to really march
to that no child sleeps outside, to have enough beds in this community where
no child will have to sleep on shelter. Amazon also says it’s
contributed $38 billion into Seattle’s economy since 2010. But what really is the responsibility
companies have to the communities they inhabit? We create jobs and those
jobs end up providing tax revenue to the city and to the state. And I think that’s really our main
goal and focus is on economic development. Corporations don’t have
any responsibility to anybody. They’re just here to make money
and there’s nothing wrong with it. Making money is legal in
the United States of America. I mean, you could argue that there
is no responsibility here except to submit to taxation and regulation,
which these corporations do. I’ve been involved in Seattle
for a very long time. I’m a fifth generation Seattleite, so
my roots run deep here. I’ve seen the company be involved not
only in money and in-kind donations that we’ve given to a variety of
organizations, but also in all of the boards that our employees serve on. And they live in the community, they
work in the community, they play in the community. And I know that
they really care about the community. Others believe what tech companies
are doing is not enough. So in the months leading up to
Google’s $1 billion dollar commitment, they were rapidly expanding and staffing
up land left and right. They actually spent more than $360 million
in San Jose in real estate and upward of $1 billion
in Sunnyvale, Mountain View area. Let’s say a housing unit, one
unit of housing, you’re building one detached house. It’s going to be, I mean,
on the cheap side, it’s going to be $500,000 dollars. So you do the arithmetic. How many units is that? A billion dollars? Actually,
not that many . A billion dollars. And not just for San
Jose, for all of the Bay Area. When you look at it, when
you analyze, it’s not very much. Some believe that money should
be coming from taxes. They can expand responsibly if they
pay their fair share of taxes. Many of these companies like Google,
Apple, Facebook and Amazon are profiting from tax exemptions or
avoiding taxation in the U.S. altogether. The Institute on Taxation
and Economic Policy says multinational corporations and their
accounting firms have become increasingly aggressive in seeking ways
to shift their U.S. profits on paper to offshore tax
havens to avoid their U.S. tax obligations. This whole idea of investing $2
trillion in taxes, in housing. That’s what needs to happen. And you can get that tax money
by having these corporations pay their fair share. Others say the government, whether
local or national, needs to be more forceful on the
development of housing. It’s also a number of laws and
regulation in which it’s decentralized the building of housing and incentivize businesses to
set up and expand in the area. Places like El Camino Real for the
length of it all the way from San Jose to San Francisco should be dense,
high rise housing on both sides of that road. And it’s all –
that housing should be oriented to transportation. There shouldn’t be parking
at those housing units, for example, just the transit options, BART,
Caltrain , express buses on El Camino Real. But historically, this
type of growth can disproportionately benefit the wealthy with more incentive
for developers to create luxury housing, not affordable housing. If I don’t have any type of
subsidy or housing or low income living, then there is no way that I’m
going to be able to, or a majority of the people will be able
to live here in San Francisco. There are so many options and opinions
when it comes to how the tech industry could expand responsibly or whether
it even should, ranging from the dispassionate to the extreme. For me to believe that Google had
any commitment to our community, I would have to see plans halted for any
expansion anywhere in the world and for them to really address what they’ve
created in Mountain View, the headquarters and the place that they started,
where now RVs are lined up just blocks away from the Google
headquarters where renters have been displaced, generations have moved out because
the rents have increased so much with the arrival of Google and
how high they pay their employees. This is the 21st century. We should, as a society, be more
enlightened than that, but also, in a country, in a nation that is as
prosperous as United States of America is, that should not pass. We’re so successful in Silicon Valley
that we’ve just grown like gangbusters. And now we’re now we’re
dealing with the consequences of that. The affordable housing crisis in
the Bay Area and Seattle is changing the landscape and makeup of
the communities that fostered the tech boom. Companies like Apple, Google,
Facebook and Amazon have stepped up to provide support, but some
believe their contributions are more for the press than for the
sake of the community. Regardless of their intentions, many
West Coast communities are calling out for help as they tackle the
state of emergency caused by the companies created in their own backyards.

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About the Author: Oren Garnes

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