The housing crisis is a growing social issue with wide implications in cities around the United States. In addition to the homeless issue (hard to quantify and even harder to solve), the issue of housing affordability has made national headlines with 11 million Americans spending more than half their paycheck on rent, according to advocacy group Home1.
Nowhere is the issue of homelessness and housing affordability more visible than in the Bay Area, where a family of four making over $100,000 annually can be considered low income. Some point the finger at tech company wages in the area pushing housing costs skyward. While these higher tech salaries are a significant contributor, the reality is more complex and includes state and local regulations that limit new housing development.
No matter the cause, tech giants are feeling the pressure and the effects of a pinched housing market. Facebook, for example, has been forced to cut back growth in San Francisco and Menlo Park. “At this point, we’re growing primarily outside of the Bay Area,” CEO Mark Zuckerberg told employees earlier this month.
In an attempt to alleviate the issue (and possibly curtail some of the public criticism), the social networking giant announced last week that it would commit $1 billion to the cause over the next decade, working closely with the State of California. Facebook said their investment “will go toward creating 20,000 new housing units to help essential workers such as teachers, nurses and first responders live closer to the communities that rely on them.” Some of the funds will create housing for the homeless, as well.
Facebook isn’t alone in its massive commitment of resources to this issue. In June, Google also made a $1 billion commitment to boost housing construction in the Bay Area. Google also estimated their investment would result in 20,000 new housing units in the area. While housing advocates generally applaud the move by these corporations, they warn that the issues of housing affordability and homelessness are complex and that more work needs to be done to solve the issues.
Meanwhile, in Seattle, Microsoft pledged $500 million in January toward housing issues. In June, Amazon said that it would donate $8 million to nonprofits working with homeless populations in Seattle and Virginia where their corporate headquarters are located. Additionally, Amazon also made a $100 million commitment over ten years to homeless shelter Mary’s Place and announced that a 63,000 square foot family shelter within an Amazon office building will open early in 2020 and house 275 parents and children each night.
With millennials entering the home buying game, the rising costs of raw materials and labor to construct new housing units, increasing property taxes and Baby Boomers living independently for longer (or downsizing and competing for smaller homes with first-time home buyers), the issue of housing affordability and homelessness aren’t likely to disappear anytime soon. If anything, the housing market will continue to get even more constricted.
Whether this will push tech companies’ future expansion further from their home bases or force them to rethink their ‘investments’ in the affordable housing issue is yet to be seen. What I think is clear: The business sector is destined to play an even larger and multi-faceted role in shaping housing and urban development policy in the years to come.
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Source: forbes
