Yes the developer wants to build 2400 apts. You neglected to mention they also want to build 1.8 million square ft of offices too at the site in Cupertino.
If these corporate villages are so nice why not build one at 280 and Sand Hill at SLAC and the horse farm in Woodside. Just put up a Weiner bus stop declare it transit friendly and build away.
Is there a dress code for the villagers?Maybe each village should have a theme. Ohlone,Spanish,49er,Chinese or techie. Sure it would be disruptive at the center of the venture world but disruption is good. At least I’m learning to repeat that phrase.
3
Illegal immigration is a big factor in California's housing woes. Does anyone dispute the math? There are more than 1 million illegal immigrants in Los Angeles county alone. They're sure not buying many houses. Instead, they're renting. At let's say 10 to an apartment, that means a minimum of 100,000 mostly low and middle income units that would otherwise be on the market. I don't understand why no one wants to deal with this aspect of illegal immigration. It may be the biggest of all. If your kid wants to come to Los Angeles to live and has to share a two bedroom dwelling with three others at still exorbitant rent, this is why.
17
They could start auctioning off permits to operate tech office space in proportion to revenue per square foot and then use the proceeds to fund infrastructure and seed housing investments. Tech would get more skin in the game of needing to get the city stuff fixed, revenues would be forthcoming, and, probably, more jobs would flow to other regions. As it is now, cities happily accept the commercial space, but are loath to build the housing with its relatively more expensive portfolio of public services and less revenue.
2
Airbnb plays a role. In the past you generally had to sell your house to get into the next one, but it's easier these days to keep it as an investment with such an incredibly lucrative outlet. There are now wealthy people with a lot of cash who buy multiple residential properties to use specifically for this purpose. I use it too but can't help but feel that these personal conveniences are harming society as a whole. I think using residences as hotels should not be allowed.
8
NIMBYism is the death of California. Everyone wants solutions. Nobody wants those solutions near them. Developers want more sprawl because the investment is cheap, and the infrastructure headaches are somebody else's problem.
Californians wanted a moratorium and guaranty of low taxed, high-value, exclusively single-family housing market, and none of them want to pay for the infrastructure costs to make their communities truly affordable and sustainable.'s
People in other parts of the country like to think this is California's liberal politics at work, but in reality it seems California's political prime-mover is simply solipsism.
8
The high cost is mostly a factor of mismatched supply and demand — the short supply a toxic cocktail of prop 13 and local control of development where homeowners have no incentive to build any housing - it lowers their homes’ values and forces them to share their schools and other resources.
9
Sad state of affairs. perhaps the best first step would be to transport all non-citizens in surplus box cars to Mexico and countries further south.
2
Non citizens are major part of the work force here. Most are perfectly legal.Very smart and productive members of the community.
12
Why $4.5 Billion From Big Tech Won’t End California Housing Crisis....no kidding! How about making a statement that Apple and others are trying and want to make an impact. Journalism should be encoutaging the movers and shakers. The biggest cynic can't say $4.5 B is not a major contribution.
4
But don’t expect the money to make much of a difference
Says the author
Okay bro. Why don’t you tell them to keep their money?
You are a shareholder. Right?
This capital would do more as R&D. Right?
2
But, hey, keep those borders open and the poor people coming!
3
Al Jazeera America holding money. The Catholic Church owns $168 billion in New York City alone. And if anyone visited the Hudson yards, which looks like another city in New York City, that cost 26 billion dollars to build!
The New York Times ran an article by 9 11 the Catholic Church owns some property there. That property is worth $6.4 billion which goes to Cardinal Dolan tax free! (what does Dolan do with all this tax free money)
I claim tax the church. But all of these tax free profit should be taxed. It would certainly help the housing in New York City.
3
Ironically, the people most in favor of rent control here in California are the same ones who try to block any new housing, thus keeping housing supply low and housing costs high. They follow a brand of pseudo-economics called NIMBYnomics, where supply and demand have nothing to do with price. Instead, high prices are simply a result of "greed."
7
How about people from the rest of the country stop coming here to work at grocery stores and other low paying jobs because they pay $15 an hour. Try using Google to find out how much rent will set you back . I know everyone wants to fantasize that in the good old days you could work at a gas station or retail job and have your own apartment. That has never been the case. It's 2019, it's expensive to live, you need to be earn a decent living and have some personal responsibility by not having kids you can't afford. It's expensive to live here, sorry, but utopia doesn't exist. Repealing Prop.13 would make a lot of people lose their homes. The repeal has been a Republican fantasy since it's inception. We are the 5th largest economy in the world and the rest of the country acts like we're imploding. Yep, it's a disaster here, that's why we send so much money to the federal government and the beneficiaries of that money complain about us.
8
I can't understand why these large companies - and I'll throw in Amazon - need to locate in places that are already heavily populated and expensive. Does gridlock and poor quality-of-life attract talent?
Why not set up shop in a cheap, red state? and bring your fresh, young, idealistic minds with you? It's a big country. We need to spread out.
5
Because the smart people are blue.
4
Psst. The people making the decisions and the thousands of high level executives who work for them don’t sit in grid lock and have a terrific standard of living. California is still freakin awesome.
4
They are just throwing money at the problem.The bigger issues that create homelessness are poverty,unemployment,drugs crime etc... To truly eradicate homelessness. You must first address these root causes.Just throwing money at the problem will not make it go away.
2
I have lived on the SF Peninsula for the past 25 years. A house on my street just sold in one week for $2.3 million (4 bdroom 2 bath, built 1968 with 2,100 square feet.) In any other part of the country, it would be about $400K. There is nothing high tech can do about this. The roads are clogged 24/7, the public schools are sub-par, and the high tech jobs go to foreigners. It is an absolute scam. Just in Cupertino last weekend for a sporting event, only 10% of the high school kids at Monta Vista HS are caucasian and maybe 2-3 African-American kids in the entire high school. We have given out highest paying jobs to foreigners and this is never mentioned. There are plenty of Americans who can do these jobs, they just will not pay them. The US does not look after it own citizens own interests. Do not be fooled by Apple, Google or Facebook. They should expand elsewhere...
6
Maybe instead of clustering housing in the big cities, we should be building bullet trains up and down and across the state so that people can commute to work while living in areas with affordable housing (for now) such as Bakersfield.
6
You’re unaware of the failure of a massive boondoggle of a “high speed” rail system in our own state?
2
@Levon S
I’m not unaware. I’m saying we should give that solution another shot. Just because that effort didn’t work doesn’t mean the idea of bullet trains generally is a bad idea. If NIMBYism isn’t going to go away, then maybe stop trying to force these new constructions in old neighborhoods and just improve mass transit so that workers can live far from their jobs without facing a half a day commute daily.
3
The high speed train,still not running, was not a failure, as Republicans like to claim. It was not well managed, mainly because of being underfunded and to appease opposing interests. It was attempted murder, being passed off as old age or suicide. I hope the system will be able to succeed despite all the many forces marshaled against it. As the billboard outside LA for a diarrhea cure used to have it, “The last mile is the longest.”
3
The Apple Spaceship is essentially a shimmering 60 foot tall circular wall enclosing an idyllic garden used exclusively by Apple employees with minimum six figure incomes and vesting Apple shares....isn’t that the President’s idea of a secure U.S. border with Mexico?
4
First, corporations don’t want to relocate to the hinterland because they cannot attract quality employees there. That is the cold fact. People have to go where the jobs are but the jobs also have to exist near vibrant, cultural centers to draw the best and the brightest. These are not factory jobs we’re talking about. Let’s remember that.
Second, cities like San Francisco and San Jose have plenty of growth potential and it won’t hurt investments (just look at NYC). Urban sprawl is not the answer. Traffic will only worsen along with air quality. More homes (and lives) will be lost during our devastating fire season.
With more investment coming into the city we can improve our schools and infrastructure, build a much better rapid transit system, and finally address the problems of homelessness and untreated mental illness.
Those city dwellers who are fighting development should move to the suburbs. That is where they belong.
4
@Judith
I hear a lot of coastal conceit in your comment. I've lived in California for most of my adult life. I grew up in "the hinterland." There are plenty of cities in "the hinterland" that are every bit as much vibrant as the Bay Area that could attract talented people and offer a high standard of living at a lower cost. Places like Columbus, Detroit, St. Louis, Minneapolis, and Pittsburgh come to mind.
9
@Abby
Add Madison, Bloomington, Urbana-Champagne and Ann Arbor to your list.
5
Was there a time when a place like SF or LA was affordable? I get that people my age (35) want to live in these places at any expense but what if we could convince many of these industries to relocate to the Midwest, the rust belt ideally. I know we do not have mountains, the ocean, good weather, or good politics but, really, wont there come a point where the discount here is too good not to live here? I don't think putting more homes in a place everyone already wants to live is going to change the fact that most of those who need affordable housing will still not have access simply because there will only be a small percentage of units available for an overwhelming demand.
4
Yes they were affordable—I lived in SF for
18 years but left because I inherited a home in the Midwest. But I would not live in the Bay Area now. I’ve visited twice and it seems to be a mess. Frankly all reasonably priced urban areas have theater symphony recreation etc, and seasonal changes—actually an improvement over Calif with it’s boring same old same old weather. I think Calif is over populated. Crowded public transportation and neighborhoods gone to ruin with crummy foreign shops. Thanks but no thanks.
4
@Ryan
You sell us short. Winter is the only lousy season, and as you know, we make the best of it with cross country skiing, snowmobiling and outdoor ice skating. We have the Great Lakes, inland lakes and many streams. Many of the tech workers would be able to afford a little spot for the summer.
5
This article disappoints. Several times it mentions that the main reason for the CA housing shortage is the resistance of local governments to such development, but never explains why this is the case. My guess is that home owners do not want to see the value of their investments decline and that many residents, whether they own or rent, don't wish to live near those they perceive as the great unwashed. Am I wrong?
4
@Geoffrey Harrison There is some of that, but as @Nikko and others have mentioned, Prop 13 is a huge part of why California cities resist residential development. Housing just doesn't yield enough in tax revenues to pay for schools and other services for the new residents.
1
Yet the mentality now now is that everyone is welcome to come and when you get here by any means, you’ll have educated kids and healthcare. It’s not smart.
1
And why is it that a single unit costs $450,000 in a housing development? It seems a meaningful figure to try to break down, even if it's not the story. Here in France, there's a 1% tax on companies with more than 10 employees, which goes into a fund to offer low-interest loans for housing development. And as the loans get paid off, they just roll over into new development.
Steve Jobs famously shook down the city of Cupertino to lower their taxes or they'd move the company. So maybe it is related to finances. I can tell you, getting a building permit in France is massively complex, but the public loans are there.
6
Wow, I’m impressed and/or frightened.
Here are the highest high-tech companies, that can’t think outside the Bay City Box.
6
Anyone who has done remodeling in the Bay Area knows the costs are ridiculous. Take what you hear nationally and triple or quadruple it. The real cost is in labor. So much so that as we got further along in our recent model I started to pick more expensive materials simply because they would be faster to install, saving us money overall. We did two bathrooms and a kitchen, plus some minor exterior work, which combined ran us over 200K. Doing all the repairs our 1600 square foot house needs in this stage of its life would run 500K. We had plans to add a small apartment to rent to nearby college students as part of our retirement plan, but it no longer pencils out. We may have to cash out and move. It's almost all about the labor, although city second unit fees are high, too. I don't begrudge the workers their billing rate, they have to live here, too, but it is a vicious cycle.
11
"while Apple is planning to build a campus in Austin, Texas."
While it may never approach the scale of the housing shortage in the Bay area, the same problems exist in central Texas. 50 years of of metro, regional, and state government arrogance, along with lawsuit happy environmentalists and NIMBY attitudes has made the Austin traffic a nightmare.
5
One very critical component to the insane housing crisis in California is city to city public transportation. Living in Stocktown 60 miles away and working in the Bay Area really makes no sense and is far worse carbon-and pollution- bywise than affordable housing in the Bay Area. But Trumprefusal to use federal transit funding effectively killed the bullet train which is a , modern is a necessary, backbone to decent public transportation. in the state.
4
@Paul from Oakland I believe the city is called Stockton, not Stocktown, it's 85 miles from San Francisco, not 60, and it's nowhere near the proposed route of the high speed rail system.
I gather California schools don't teach basic geography anymore. A few years ago, our rabbi -- a California native -- told our congregation that Israel was about the same size as California. When I spoke to him after the service, he insisted he was correct.
The truth: Israel is about 8,000 square miles, just a little bigger than Riverside County, CA but not nearly as large as San Bernadino County!
5
Water shortages,pollution,droughts,wildfires,gig jobs that pay very little,homelessness...I don't see building more housing as a solution to CA problems. It seems a recipe for exacerbating all the challenges the state is currently facing.Developing real
estate has always been the path to riches in this state,never a solution to anything!
4
If you travel in Europe, they have a nice system of dense cities and towns, with accompanying green space on the outskirts. If you mandated more dense housing, where would the green space needed to offset it come from? There would be more dense cities, but the sprawling suburbs would not disappear . We could assume that even more tech companies would come in to these dense areas, hire more and more people and make the congestion even worse. New high density housing without restrictions on other types of growth just compounds the problem.
2
With all the wildfires, droughts, water problems, earthquakes and power outages, California is becoming uninhabitable, and it is only going to get worse as the climate warms.
At some point, there has to be a serious exodus, and housing costs will sink because of diminished demand.
In the meantime, the NIMBY folks are holding the housing market hostage, which is mean-spirited and shouldn’t be allowed.
3
That said, California is a huge state. To me the solution is not to cram more people into the costliest and most congested places, but to plan and incentivize new developments for living and working in the emptier parts of the state, especially inland, to preserve the natural beauty of the coastline to the greatest extent possible.
6
Supply isn't the only issue - income inequality exacerbates the problem. You can't build a city forthe extremely wealthy and the extremely poor, the gap needs to be closer. Those advocating for companies to locate further afield from the Bay Area don't understand how difficult it can be to hire in those other markets - cheap living doesn't mean you have the tech workforce there. Plus, you miss out on the aggregation effects that boost productivity and creativity by co-locating tech businesses.
Basically, this is a wicked problem that requires action on all fronts (affordable housing supply for all income brackets, workforce development, cheap capital) to resolve.
5
I'd like to see the actual figures behind the statistic of $450,000 per unit of low income housing, averaged across CA. Seeing that there are new construction 2 BR market rate condos for sale in LA and San Diego counties at this cost - including the builders' profit - I can't believe that low income apartments, averaging in all the cheaper counties, cost this much. Does the figure include Title IX administrators on each site, perhaps, or Trigger Warnings when construction workers are about to see something upsetting, like a sewer line?
3
Here the San Francisco Bay Area, the fundamental problem is not a lack of housing but the failure of state and local governments to require that residential and commercial development be in balance. Over the past ten years , Google, Facebook, Apple, and the rest of the tech sector, encouraged by the city and county governments of Silicon Valley and San Francisco, added millions of square feet of office space and around half a million new jobs with no concern for where those employees would live. Consequently most of them are commuting long distances. Those well-compensated tech workers are displacing people in other sectors, who in turn are having to move farther from their jobs and also commute long distances.
11
Those cities’ goals are revenues, not results.
2
@Robert Lauriston Thank you! I absolutely agree with this.
1
The tech firms should get creative. I'd suggest the following
1) Allow more work-from-home arrangements. It immediately improves the quality of life for the commuters
2) Shift the work schedule. If stereotypes have kernels of truth, tech workers work best from noon to 6pm and 10pm to 2am. This can spread out rush hour.
3) Move inland. In Los Angeles, there's no reason why companies have to crowd into Silicon Beach. Go east.
8
This article reminds me of the now-disproven idea that the solution to congested freeways is to build more freeways. (It's not been shown that it simply causes more driving.) I'm low-income, born in San Francisco, and would like to move back, yet costs are too high. Yet I resist the blame-the-crisis on NIMBYs narrative pushed here. SF built MANY THOUSANDS of new highrise apts and condos in the southern half of the city. Affordability got WORSE--as did congestion, traffic, crime, pollution, schools. They also ruin the charm, quiet pace, and open space SF is known for. San Franciscans quite understandably don't want thousands more high-rises built, further ruining quality of life in the city. People hate high-rises because they ruin their neighborhoods--it's just a fact. There are other solutions--one is moving tech companies into less congested cities. Another is subsidizing the building of tiny homes and ADUs in people's underutilized backyards and basements. Another is, hello, statewide rent control and subsidized rents! Finally, how about all these economists and urban planners actually LISTEN to what these annoying 'communities' are saying and try to find solutions that work for THEM?
8
My husband and I lived in SF for a long time. We had a sweetheart deal with our landlord so the cost of housing was not a problem for us.
We still moved. Our apartment was a pair of shackles that we would never be able to leave, and god forbid they should tell us their son is going to move in and we have to vacate. That would have been an absolute crisis. So we got out while the getting was good.
6
We have too many people. We would drastically need to change the way we live, I mean extremely reduce our carbon footprint, in order to accommodate the number of people we currently have, yet we keep on adding. Building more suburbs is the opposite of what we need.
6
In the past, companies built housing for their own employees - maybe companies over a certain size should be required to build housing - for their employees....
to help this problem:
Bay Area has added 676,000 jobs over the past eight years, and 176,000 additional housing units, a ratio far from the 1.5 jobs per housing unit that planners consider healthy
This is a half-baked idea - let's discuss!!
7
According to the panel the cost of single apartment in CA is $ 75,000 not $450,000. Also, person writing it thinks that California = S.F. Bay Area.
The situation is grim, but money comes from companies who are no strangers to litigation and who have access to lawyers. The irrational defiance to any development may slow down some projects but also it will speed up legislature to limit their ability to object.
1
With wildfires growing beyond control, earthquake risk, traffic quagmires and the cost of housing, why would anyone want to move to California?
4
Well, for starters, CA doesn't have draconian laws with respect to women and reproductive healthcare.
9
@Appalled - No hurricanes or tornadoes, humidity or bugs like Georgia has to offer.
4
Look every gift horse in the mouth.
2
It is scandalous to see RVs lined up on El Camino Real at the gates of Stanford University. Their Department of Economics has been brainwashing their students with "free market" nonsense that has lead to this disaster. They are trained to serve the rich. Local governments have also sold out their normal citizens to cater to rich techies.
10
Did anyone say it would end the housing problem? Surely it’s a good start.
2
The article leaves out significant facts regarding the Vallco project. It isn't a pure housing play. From the San Jose Mercury:
"Sand Hill wants to build 2,402 apartment units, 400,000 square feet of retail and 1.8 million square feet of office space at the Vallco site…"
"..the City Council in August approved a general plan amendment for the Vallco site that eliminated the 2 million square feet of office space previously allowed there and imposed a 60-foot height limit on buildings. The amendment also limits housing development to 13.1 acres of the 50-acre site, although it would continue to allow up to 459 residential units"
3
Thanks Biji! I see why he used that Cupertino example, since it ties into Apple’s announcement, but it’s not really the best one for this argument. I’d love to see some analysis of Sand Hill’s claim that they need to include the office space because they can’t make money building housing alone.
2
@Biji Basi Very smart to co-locate housing, retail and offices. At least some of the occupants won't have to drive everywhere, unlike most Silicon Valley residents.
2
@Grafakos In general I agree that mixed-use development is the way to go, but Sand Hill's original Vallco proposal would have brought 3-4 times as many jobs as housing units, in a city that already has a huge imbalance. And Cupertino is far from the train lines, so that would be more and more people driving in from San Jose and points south. I'm very much in favor of affordable housing, but it irks me when developers and their allies shout "NIMBY" any time a community resists their plans.
3
Apple and their cool kids only want to live in hip, cool places. So Austin is a logical choice, but...
My son has lived there for over a decade and visiting Austin isn't what it once was. Stupid amounts of traffic, astronomical housing costs in the city and near 'burbs. But hey, we can just replicate what's happening in Cupertino by building cheap housing 30 miles out of town and everyone gets to drive 2 hours to work all over again. And Texans are not known for their devotion to public transportation.
Austin used to be an enjoyable university town but now will become just another tech-driven rat race at the expense of those who won't be making 7-figure salaries.
11
California is sowing the seeds of its demise. Cities run on people, the people who pick up the trash, fix the roads, the police, fireman, teachers, etc, and when this generation retires, where will their replacements live? Eventually the whole State will ground to a halt, and once again the main culprit in this tragedy is greed and the love of money, and selfishness, pure and simple. They already have an army of homeless straining every social service to the breaking point, those numbers will only continue to swell. They deserve what is coming.
6
@Lonnie Am a very old California native. Heard your predictions my whole life. California will innovate yet again to solve our problems. We’re good at that.
7
@Citizen60 - I have been hearing for 60 years now that California is going to fall off into the ocean.
2
Geroge Lucas planned to build affordable workforce and senior housing on his land, all on his own dime. 224 units. Plans must have been stymied because there hasn't been news about it for years. But, that IS REAL generosity. And he didn't help create the housing shortage like these privacy invading money grubbing companies. And he offered it years ago.
https://www.cnet.com/news/george-lucas-to-build-affordable-housing-in-one-of-the-richest-parts-of-america/
1
Yes, you can bet wherever the ‘affordable’ housing will be built, it won’t be anywhere near Tim Cook’s house or the Apple Spaceship...which represents the problem in a nutshell.
6
The top three reasons for California's housing crisis have nothing to do with Big Tech. Zoning restrictions, off-limits public lands, and rent control severely limit land use and home construction in the state. Scan any online map of California and you will quickly see that an enormous amount of acreage is off limits as public land - not that you would want to build in a fire or mudslide zone anyway! In "buildable" areas, liberal Democrats shun inclusiveness by enforcing strict zoning laws that were put in place in the single-family home 1950's era. Try introducing affordable housing or triplex units into a neighborhood in liberal Berkeley! Rent control artificially allows renters to squat in money-losing rent-controlled buildings, and severely inhibits investors from building in areas that will limit profits. Rent control puts both a floor and ceiling on rent flexibility for both renters and landlords. Why build an apartment complex in expensive CA when the rents will be limited by local or state government?This is the government control of private economy that Democrats dream of, and now they must live with the consequences of limited livable options and homelessness.
3
@James it ain’t rent control in Silicon Valley. That’s SF.
2
The term "public housing" is not in this article. Yet the term "public relations" is.
That pretty much sums up the problem.
7
The housing crisis will remain intractable as long as the following problems remain unaddressed:
1. Income inequality. There is a reason that workers at the low end of the income distribution can't afford to buy the services or relatively better-paid construction workers, engineers and developers. It's called "low wages." They don't teach that when you are getting your MBA.
2. Cost creep due to codes: the latest is that all new housing will have to install an expensive PV system in order to chase the chimera of "zero net energy," which is a clever way to shift the cost of providing sustainably-produced electricity from PG&E to individual home owners and tenants. It will now cost at least $20K, upwards of $50K, per unit to comply.
3. Exclusionary zoning: this is a fancy way of saying that planning departments, which are controlled by the elite, don't want lower-income folks in their cities and neighborhoods. It's done on the sly, behind a wall of regulations, so they don't have to come right out and say it.
4. Pathetic public subsidy programs
3
There is no evidence whatsoever that building more housing will make housing more affordable. If anyone has evidence let's see it. The places in CA that are 100% built out are some of the most expensive. Supply and demand is a fairy tale, among the many factors that influence the cost of housing it is way down on the list.
So Apple, Amazon et al need to diversify geographically and go to places that have a lower cost of living. Midwest anyone? Why do they keep stuffing more and more people into places that don't need or want them?
6
Because the highly paid employees of those companies don’t want to live in the Midwest. Things will have to get much worse in the Bay Area before you see employees willing to move to Kansas City. The Bay Area is doing it’s best to make that happen.
1
The notion that these companies care about affordable housing is a complete sham.
Case in point can be seen in Venice Beach California, where the offices of Google are almost completely encircled by homeless people living on the street and in tents on the sidewalk directly outside. Every day the employees step over and around these homeless people and families as they go about their daily lives of tech-driven ignorance.
If Google truly cared, how could they stand for hundreds of people living on the streets within 50 yards of their secure fenced in parking lots filled with Teslas and imported cars?
T
his is a tax incentive, plain and simple. The race to a trillion is on and securing real estate without paying taxes is one of the most transparent ways to save money in the history of corporate America
6
When they tear down empty shopping malls, most of the debris ends up in a landfill. Why not convert the malls into apartments instead of tearing down and building new? At least they already have parking and maybe an atrium for the apartment dwellers enjoy.
5
Because the local politicians will not approve the spaces be re-zoned for residential use.
2
I grew up not far from Vallco mall. Believe it or not it used to be a shopping mecca, beautiful inside, with interesting boutiques as well as department stores. As a teenager it was the place I went to dream, try things on, and blow my saved up money or use mom's Macy's card (with a note, of course).
I'm sounding all old and creaky, I know.
There is no other shopping center around there, just strip malls. Cupertino doesn't have a downtown. There is no there, there.
Apple has swallowed the place almost whole. Of course, I shouldn't have been surprised to read that building housing on land they already own as well as getting into the housing market was not philanthropy, but an investment for them.
California has been ruined by greed.
13
I really think there is an easy solution to this, and think we've kind of already started down the path.
The corporations need to open more offices in other cities besides the obvious big cities they are already in. I know, I know, you're going to argue that there is less talent in those cities, etc. etc.
I've lived and worked in Silicon Valley my whole life. EVERYONE HERE IS FROM SOMEPLACE ELSE, THEY JUST CAME HERE FOR THE JOBS.
If you ask the average tech worker in these major metro areas if they would take a job in another (read less expensive) city and keep their salary most would consider it, seriously.
Add in the people who don't currently live in these metro areas but want a good job and I think you've got enough demand to satisfy the corporations.
I don't know why these big companies would rather spend a billion on new office/housing in these crowded markets instead of expanding to other less expensive areas and try to attract talent.
Seems like they might have started to figure that out.
16
Look at these comments! They're a good preview of what you'd hear at any California city council, zoning board, or transit authority meeting: "the problem isn't that I live in California, it's that other people live in California. There are also too many other people on my freeways, parking in my parking places, and trying to live the sprawling, wasteful, carbon-intensive life that I've lived for fifty years."
New generations of people will always want to live in places that are beautiful and present meaningful economic and professional opportunity. We should celebrate the fact that such a place exists, and find ways to gracefully welcome newcomers, like building denser housing and improving transit.
The worst approach is the one that we've had since the Boomers came to California and then decided no one else should: a parochial, sclerotic refusal to change anything. The Vallco mall is one example of thousands here: any attempt to build housing on an abandoned lot, or move a street parking space to improve bus service, is met with the same response: "ugh, can't we just keep things as they were in the 70s?"
Wishing everyone else would leave is not a solution, and will just cause the situation to keep getting worse.
13
Agreed. These comments really speak to the truth of the article.
1
@Jon Bruner Agreed. And I'm a (late) boomer! We Bay Area boomers now have kids in their 20's and 30's who can't afford to live in the places where they grew up. If anything, that should motivate change. I fail to understand why others don't see this.
3
@Jon Bruner We are not asking people to leave, we are asking for a sustainable level of development. Just becasue people want to move to California doesn;t mean that California should accommodate them. About 25-30% of California is foreign born. Are the people of California expected to accommodate anyone on earth who wants to live here? That's crazy.
2
Weiner's a little off on his history: post-WWII, developers in California paved the landscape for car use - suburbs are only one aspect of this Fed-backed pattern that was replicated all over the U.S. The solution logically follows: no more cars.
2
@Evan You'll have to take my Volkswagen out of my cold dead hands.
2
Apple made a net profit of $59.5 billion in calendar year 2018 ($62.9 billion net profit in fiscal year 2018 ending September 2018). An overly simplistic but illustrative calculation: Federal corporate tax rate decreased from 35% to 21% in 2018, saving Apple $8.34 billion in the calendar year. So we lost $8.34 billion in tax revenue and gained $2.5 billion in charity. I'll take the tax + better federal housing policy and investment in this issue, along with a much better state and local response to what is an urgent crisis. To suggest that this is solely California's problem is absurd. Californians (especially low-income Californians) and our politics did not create this crisis. This, like the fires, is the outcome of decades of mismanagement, corruption, and bad policy at all levels of government, starting at the top in Washington.
2
@G That's not how it works.
3
No one has figured out a way to control the worldwide population explosion—China's one family/one child laws were disastrous—but we are faced with the obvious problem of how to provide housing, not just in California, but in urban centers across the country. Homelessness isn't just a tech problem, it's a social problem that is impacting countries across the globe. Unless we start conservation measures now, the cities of the future will put a strain on resources that the planet cannot sustain.
3
Also not addressed in this article is the effect on home prices due to foreign investors (and domestic investors) paying cash for homes they never intend to inhabit. Happens in CA, for sure, and probably in other desirable places to live. I have no idea how we keep this from happening, but it does affect home prices in the LA area. When someone pays $100,000 more in cash than the family attempting to buy the home, the seller is going to take it. They don’t care who lives there (or who doesn’t live there) once they move.
7
Cram human beings into high density housing which forces people in such close proximity that they cannot enjoy peaceful and quiet lives in their domiciles, have no clear views of anything but other domiciles, and must use elevators and queues to do everything. It surely will be cheaper than the suburban ranch style homes with front and backyards, but it's not what most people want.
7
@Casual Observer Apartments are not cheaper - blowing out plastic trimmed tract single family homes in remote cornfields is the cheapest way to house people.
But, the first day that new homeowner gets in their single occupancy vehicle to drive to work they discover there are hidden costs to that remote cornfield home.
The high prices of apartments and shared buildings in urban areas indicates that there are people that value something other than privately owned walls.
4
What surprises me is, (BMR) if you want to purchase a Below Market Rate home in SF, you have to go through a rigorous qualifying process through the SF Mayor's Office of Housing to prove you are income eligible. However, there are thousands of people who can well afford market rate rents, who are squatting in homes that can be made available to those lower down the income ladder. It is the greed not only of large corporations but universal greed that keeps those renters from squatting in those homes that have fixed rent of as low as $1100 for a two bed, two bath in the Mission, when their incomes allow them to afford market rate rents, which would be around $5000 for the same units here. I know folks who occupy these low priced units and have additional homes they either rent or own in Berkeley, Palo Alto, etc. There is corruption baked into this whole housing fiasco. No one is willing to bell that cat. Those folks need to show income qualifiers to occupy those homes and if they don't meet a threshold, those homes should be made available to people who are genuinely in need of a break.. Keep the rents frozen at those rates for those who absolutely need it, not the greedy ones.
8
Also, people who own homes in the desirable California neighborhoods are afraid that more housing will dilute the values of their coveted homes. the term "subsidized housing" is looked at as "there goes the neighborhood." Back in the sixties, it seems more people were just middle class, and so more development wasn't looked at as so much a threat to home values.
7
The elephants in the room are prop 13 and rent control -- both well-intentioned but with catastrophic consequences for housing costs. Huge numbers of people across the state have artificial incentives to stay put in their subsidized arrangements while anyone other than the wealthiest new entrants is consistently priced out.
10
@Perfect Commenter: Not sure that rent control has the catastrophic consequences you claim. While there may be some people with “artificial incentives” to stay put, what about the huge number of people that need rent control, that otherwise would end up on the streets?
Let’s be honest. The real problem is as old as Capitalism itself: the Tech boom has created very wealthy people, but left millions in poverty.
2
@S. Jackson I'm all for income-based rent control and other protections to keep people in their homes, but my firm belief is that blanket policies like this increase market rents and the overall price of renting. Prop 13 is the same but for owners (and landlords.)
3
Even people with fixed housing costs are being driven out of California. The lack of affordable housing is driving up the costs of goods and services. Businesses have to pay workers higher wages so that workers can afford housing and commute costs. In the past five years, the cost of a haircut, a cup of coffee, routine veterinarian wellness exams, handyman-type services, groceries, and sandwiches at fast-casual eateries have soared. What's the point of living here and enduring traffic if we can't afford to get a haircut or get the fence fixed?
7
Why must all these technology giants be headquartered in California? There are 49 other states! For $450,000 you can build 3, 3 bedroom family homes in Mississippi, Alabama, Texas, Arkansas, and lots of other places too! In Florida for under $200,000 you can easily build a very nice 2 bedroom, 2 bath home with a garage in a nice community and it doesn't have to be retirement community. Upstate New York is starving for jobs and development as are parts of Pennsylvania.
You can't put a quart into a pint container. No matter how much money you commit to the job.
These tech companies need to start looking around at what it takes to move outside of California. There's lots of cities across America that would be ideal locations.
14
@Jack Frost I've lived in Texas, Arkansas, Mississippi, Oklahoma and Utah. Housing is affordable, but except for Utah, the scenery is blah, the lack of public land makes hiking and mountain biking and canoeing difficult, and the culture consists of waiting for months for something to happen, and then waiting for months for something else to happen. There is more to life than a house. People want interesting things to do, too. Watching other people have interesting lives on YouTube or the TV doesn't cut it for a lot of people.
2
@Linda Agreed! People want a life! But there are plenty of places where the scenery and amenities are just fine. Young families need parks, recreation areas, museums, movies, and access to good educational facilities for their children, not to forget healthcare and general shopping. Transportation is also a must. All of that means investment not only by the tech orgs but also by the federal, state and local governments. I'm a New York City boy. Born in the Bronx. I know what city life can offer. I also know what it means when you can't find housing, and you spend your life commuting or stuck in traffic for hours. The tech orgs will have to offer more than affordable housing. It will take investment in America and our infrastructure. By the way I lived in Los Angeles too. I remember the freeways, the smog, and trying to buy a house in the Hollywood Hills and the Valley too. I now live in Florida and get more bang for my buck. I'm just 45 minutes from Disney and about an hour from either coast. Jobs down here are desperately needed. And the scenery ain't too bad either .
6
@Linda I agree. Here in Austin we just now got some of those moving picture shows. Chaplin is a hoot! I here tell that next year they going to open up one of them fancy French diners.
When and where did you live in Texas? The 1920's in Ozona?
2
This discussion is so frustrating to me. There are some easy solutions other than continuing to pack more people into an area that is already overcrowded and lacks adequate infrastructure for the population that is here now.
1. More remote workers or more work at home days. Collaboration tools are so good now there is no reason to be in an office every single day. Further, there are multiple, successful companies that are 100% virtual. And there is no shortage of people who will tell you they have to go into an office where no one spoke to them all day - everything is over email and IM.
2. There is affordable housing ALL OVER THE STATE and ALL OVER THE COUNTRY. Why can't companies move some of their operations outside the bay area. People would jump at the chance to live someplace affordable and less crowded. People are leaving the bay area in droves as it is. Or again, remote workers.
10
The issue is inequitable distribution of wealth and power, not how expensive rents happen to be. Simply building more units does not assure the the rental costs will remain affordable. Nearly all of the existing housing across California was initially provided for middle income occupants. Then the demand rose or investors used real estate to shelter their assets, and the costs of housing rapidly increased. People typically move into homes and apartments which they can afford and eventually find that they cannot.
Apple et al are offering a plan that will make them billions in the long run but solve housing shortages only in the short run.
4
Perhaps with the changes in social behavior that we'll no doubt see in adjusting how we live to the realities of climate change, we should also think about population limits within all states.
By controlling the number of people and houses and businesses that would be intentionally planned for each state, we'll see "managed population space" so that all states' resources can be more evenly distributed with the result of a more balanced use of where and how we all live--and thus, a more equitable cost for buildings.
In the case of California, where does the vital resource of water come from when by mid-century the state is expected to add so many more housing units?
If we intentionally spread out work, recreation, wilderness, housing and population equitably among the states, we create spaces for people and businesses that are good for the environment and the economy of this country.
2
"...it costs about $450,000, and considerably more in high-cost areas like the Bay Area and Los Angeles, to build a single unit of subsidized affordable housing in California."
$450,000! That number is in desperate need of innovation. We need to figure out a way to get this $100,000 or less. Then, it can be profitable for a developer to build multiple classes of housing that companies & government can improve with subsidies. Whether it's factory-built units, streamlined permitting, or new construction materials & methods, California needs disruptive innovation to change the calculus or lose access to a diverse community.
3
I've lived in the Bay Area for most of my adult life. I think that we have enough people and jobs. The tech companies can expand in other cities or hire workers who can work remotely form outside the area. Their growth is already limited here due to the housing issues, so why not provide jobs to other geographic areas.
9
These "affordable housing" efforts make things worse for most renters. To qualify for a below market rate unit, a prospective tenant must demonstrate a stable income within a narrow range--not too high and not too low. Renters outside of this range are excluded from the rationed housing, and must compete for market rate housing. By taking build-able land out of the market for market rate development, fewer market rate units can be built, driving market rates up for tenants who do not qualify for a below-market apartment ration ticket. Essentially, the government rather than the market is deciding who gets housed and who is displaced.
5
Google, Facebook and Apple, among others, have been allowed to build, and expand, multiple enormous campuses in an area with a longstanding housing crunch. Not one additional housing unit has been required of them in exchange for the permits to build. And the building continues apace. The streets of Mountain View, Google's home, are lined with van after van in which people, often Google employees, live.
And yet the companies continue to locate jobs in the Bay Area that don't have to be here, or in California at all. It's about time they did something. That it won't solve the whole problem is no reason not to go forward.
But beware the fine print. My small city is one of the ones that allowed new development on the Caltrain line. Initially there was public support. But our city council was no match for the developer, the result being a high-rent behemoth with not one affordable unit. A word to the wise.
I'm old Silicon Valley--I've lived and worked here for decades. I know we won't soon return to the days when rush hour isn't all day and there is more breathing room. But to do nothing is not an option.
15
"A key struggle in California is how to get much-needed housing built when local governments and homeowners do everything they can to prevent it." What are they doing to prevent it?
NIMBY politics. No neighborhood or town wants an influx of “poor people” who live in multi family high density housing that rent below market rate... aka have kids who use school district tax $ without adding value to the pot. It’s a class thing, and homeowners can be quite aggressive about it
5
Couldn’t tech companies just pay taxes and pay their employees enough to buy houses? How about more shares of stock to all including the janitors. In other words share the wealth in a way that is not tax deductible.
3
That lack of vision now sits in the Governor's office in Sacramento. I find it interesting that there's no mention of the 800 million dollar tax exemptions Apple gets courtesy of the US taxpayer. The problem with the "Golden State" is the same one that's been going on since the 1960s. Nobody wants multi-dwelling housing near their neighborhoods. So many California lifestyles are tided up in their property values that no homeowner wants to see them go down. Those same high property values are a great way for long-time homeowners to springboard into retirement with a big enough cash nest egg to live on. The high cost of a home in CA is also pushing out the state's future as young people looking to start a life are heading in droves to states like Nevada, Oregon, Idaho, Texas, Arizona,
9
You can blame liberal policies or greedy corporations all day long, but, at the end of the day, California is the victim of its own success - and more importantly, what nature bestowed upon it: great weather, beautiful beaches and mountains. If you build more housing and expand the freeways, all it will do is attract more people.
7
New York times is tap dancing around the issue. What are the internal forces making construction of housing units in California so expensive? Why does it cost 450K to build a single apartment in California but cheaper to build a comparable one in Texas? Could it be California's environmental regulations, local government regulations, zoning, taxes? Could it be local citizens with community groups holding development up in court making the process even more expensive? Government has to be the problem here. A democratic senator introduced a bill that would make it easier to build housing near transit lines. The senator citing California cities are making it harder to impossible to build housing. What about regulations that specifically making it expensive to build or even rehab. All of this needs to be looked into. I saw that another senator proposed statewide rent controls. If you believe this will help the problem then you are wrong. In fact, wherever rent control has been practiced, it made rent even higher and caused scarcity in the market.
7
Here 's an unpopular opinion: the Bay Area should just stop growing. It's already the world's fifth largest economy and doesn't need to grow more. We don't need more tech companies here, especially tech companies that don't address socially meaningful issues. We don't need the 85th company working on applying AI to self-driving cars or cloud storage. We don't need even more people becoming homeless and billionaires. Get out of the Bay Area. Try to grow in places where the growth will actually have an impact, where it will kickstart a flagging economy, where socially meaningful problems can actually be addressed.
10
Sounds like you should leave the Bay Area.
1
@Ashutosh Let's educate people in all parts of the country so that companies can actually hire folks who can read, write, spell, and do basic math. That's a start.
@Mary A Where do you think the people overfilling the Bay Area came from?
3
Time for the companies to become middle American rather than bicoastal.. Chicagoland is nice, so is Texas . OK the weather is more difficult in both places...than in CA but fewer forest fires, droughts. There's northern CA... and inland. Sacramento. Frankly, in many case people's activities have little to do with the place where they are living, so living in the SF or NYC area except that's there's public transit.. may end in a lower quality of life for many. I am much less in favor of masses of public housing in major cities than I used to be. There is plenty of empty real estate - houses with yards -- in all kinds of places -- smaller cities... and in the end people might be happier living in such places.. but how do we provide incentives for people go move out of the cities?? now that the jobs that used to provide employment in such places have been moved to China or Mexico? (no more Rustbelt) I mean 450k tbuild a barely average apt. in SF. This article does not break down the costs nor explain who profits from such ventures. One multi- millionaire I know made his fortune contracting for HU. Plenty of millionaire MDs made their fortunes from Medicaid/Medicare. Do we see a pattern here?? and real estate developers and tax laws-- unbelievable... Devil in the details??
5
Auntie, you have a very good point. My son lives in the Bay Area, and makes a mint from the tech industry, he is doing extremely well. I'm a blue collar machinist that lives in the Santa Barbara County area. We are doing well and living the American Dream, house, picket fence, 2 car garage and comfortable. My wife spoke of moving to the Bay Area to be closer to the kid. And.....I'm not willing to throttle back my lifestyle to live in the Bay Area. Where I'm at is where I want to be. We could sell the house and make $100k, but I couldn't afford to buy another anywhere near San Francisco/Oakland. Moving backwards is not acceptable to me.
1
Tech companies pay outstanding salaries and want to live close to work. Anytime you mix high salaries with limited houses prices escalate. Way more people want to buy than the supply allows and it is a doubtful there will ever be enough houses. There certainly won’t be in the next 5 years.
Add to that the fact that those who own homes have no interest in new housing being added to the market as it could greatly reduce the value of their homes. When they do sell the proceeds will be used to be buy a super nice house in a stare with lower taxes as the exodus from California continues. There is no reason to stay there.
2
Not that I agree, but no mention of Prop 13? Cities and towns can’t afford to lock in tax revenue for 20 years into the future.
4
Minor point of fact: Vallco Mall has been dying a slow death for well over a decade. In the past few years, luxury apartments with two bedrooms going for more than $3500 have gone up right across the street, parking extra. For that you don’t even get a pool.
“Below market” is a nebulous term. What I want to know is whether the working-poor residents of Cupertino and the adjacent slice of San Jose - the mechanics, cleaning ladies and fast-food workers, often Latino - who currently commute hours to get to this area - can afford it. That’s what we need.
We also need supervised housing for the long-term homeless as part of this development.
It is a pity that the cavernous Vallco lies dormant while people sleep in tents.
6
Wouldn't it be cheaper for them to build some alternate work locations in places in the midwest like Cleveland, Cincinnati, Buffalo, Pittsburgh or Detroit.
People will scream that no one wants to work there but $150 K in those locations buys you a comfortable lifestyle, a decent house in nice neighborhoods and there is enough leftover culture from the old industrial money there to entertain everyone.. If you offer it to people some might just take them up on it. If you do it quietly (not like Amazon) you can save yourself some money.
14
Yes it would,and the people moving there would enjoy a massive increase in their quality of life.
10
All of those cities you named are cold weather locations. Sunbelt cities would be a better bet to lure people away from Cali... except for the politics/culture/religion is so wildly different.
2
@Hugh G They are starting to do this. Facebook and Google recently broke ground on new sites in Central Ohio.
2
I spent a decade working in SIlicon Valley from the late 80s to the late 90s. Housing was expensive at the beginning and got more expensive. Traffic was very manageable when I first started and got worse; couldn't even plan on driving the 101 at certain times. Maybe some of these firms should consider moving out. Not too far away, but maybe south toward Gilroy? And connect them with a Hyperloop :) Just a thought.
3
Most people in the bay area do not want additional housing because their commutes are already a nightmare. Trying to add housing near people's jobs is a hit and miss endeavor. The transportation situation needs to be fixed first. It's probably time to add a steep tax to each new hire from out of the area, ie anyone moving in from more than fifty miles away. The tech companies have been driving this migration, and it's going to take more than a couple of billion to fix.
It also doesn't help that hedge funds were able to buy up huge numbers of foreclosed houses during the last economic implosion that they helped to create, and now sit on high enough percentages of the rental property market that they have outsized control over rental pricing. Now there's an industry that should be taxed until it is small enough to drown in a bathtub.
9
You mean NIMBY exists in the uber liberal state of California?
And why exactly does it cost 450K to build a house that doesn't need heating or east coast insulation?
6
@Jonny
Well, they need heating, and the insulation is standard. But you’re right about the cost.
Permits and “fees” more than double the cost of the construction
1
The person who says in this article that the problem isn't cost but availability is badly misinformed. In San Francisco, an EPI study found over half of households have less income than required to afford basic life requirements like housing, healthcare, daycare for working parents, utilities, transportation, phone service and an internet connection. That is a very serious cost problem, as reflected in the $3,700 rent for a 1 bedroom apartment.
This is not just a California problem, as you will be able to see here: https://reports.nlihc.org/oor
The 2019 report on the gap between wages and rents reveals there on only 5 states in America where a $15 minimum wage for 40 hours a week would be enough to afford rent. The 5 states in question have wages depressed even more than the rest of the country and the gap is still creating a lot of misery. The most affordable metro area in America is in Texas and it is unaffordable for over half our people.
For the US as a whole, to afford a 2br apartment in 2019 requires earning 22.96 an hour; the wage for a 1br is $18.65. Based on the most recent data from Social Security on combined income from work, 2 out of 3 Americans earn less than needed to afford the fair market rent on a 2 bedroom apartment, 54% earn less than needed to afford a 1 bedroom apartment and fully 40% earn less than $25,000 a year - not even close to the cost of independent living.
In California, to afford a 2br apartment you need to earn $34.69 an hour.
10
The cities around the big tech companies are a huge part of the problem. Cupertino, Mountainview and the surrounding area have seen home prices go off the charts. It costs $2Million+ for a typical starter home in these communities. The house would cost $200K or less in much of the country. What they are really against is diluting those astronomical property values even though most of those owners are just along for the ride. Those places need more density so employees could walk to work/shopping/entertainment or take shuttles. Spreading out more is not the answer.
8
Opponents of housing projects are often cast as unreasonable, and in some cases they may be. But a big aspect of the problem is that politicians such as Scott Wiener are focusing almost exclusively on building housing and the people in many of these communities see that traffic is already terrible, public transit is bad, schools are overcrowded, water is a marginal resource etc etc. Yes, homelessness is a major problem, but the apartments and condos being built are often far beyond what the people in the tents will ever be able to afford. The tech companies do need to find additional places to develop and house their talent.
8
The "Tech Companies" are not on point about housing in California.
One of the hidden factors which drives rent rates high and makes our roads clogged is the pervasive conduct of multiple families living in a single "unit" or a one bedroom apartment, and illegally housing more than 10 people, adults and children, throughout a single month. Children are used as weapons against being evicted for such.
It is not illegal to rent to undocumented persons in California. It is illegal to discriminate against them. My neighbors own three huge cars and have three families living in an open one bedroom apartment which technically is a studio.
I pay a regular rated rent and utilities. But my rent and those utilities are paying for the "guest" violations by my Mexicans or Moldavian, or two African American neighboring tenants who similarly are violating the lease agreement by housing multiple "guests" throughout a single rental month. Violating occupancy laws and the rental lease agreements is universal.
California has an illegal or undocumented population that is 10 million or more. My number is based on my feet on the ground experience and the 2017-2018 Yale Study which quantified the total number of illegal aliens in the US at 21 million not 11 million.
We can make more housing in California. But it will be like a sieve. More people will occupy the new housing and then abuse it by subletting to ten times the "lawful" number.
We have to move out of California.
7
Supply and demand. There is a limited amount of stock with higher bidders. This pushes the middle and lower middle out, leaving the poor who are probably public housed.
The bottom of the working poor fall off the last rung and end up sleeping rough, as the Brits say, and an American Favela springs up. This is upsetting if you've just spent 2.5 million dollars for a modest middle class 3-bed on a small lot-or in general for anyone rational who cares about the future.
Build more-zoning won't allow it, less so as the zoning raises the value of existing stock even more. This also brings up a requirement for mass transit once an area is built up that much....and they can't even build a fast train from LA to SF.
Public Housing ? - that narrative is poisoned even though public-private partnerships (Mitchell Llama) did work as intended for quite a while and should be revisited.
The tech giants are in the spotlight because they bring visible tech bros with big wallets who will live stupidly. This is 1% of the employees, but get the narrative. The overall economy is doing well, but a just society would provide in some way to those tossed off. Socialism !
3
In a liberal California city governments are anything but liberal in providing affordable housing. Many cities prohibit high rise building in spite of the land shortage. Liberal home owners don't like poor near their homes and resist all building projects that provide affordable housing as the suite against the project in this article.
6
It's a joke. You could take that kind of money and build endless housing units in a less populated place than CA. Why do people come to CA with no means of support? It is so simple. The weather is great; the liberal attitudes towards immigrants and the state aid that CA is famous for. If you offered these homeless people housing in ND, they would turn it down. Too cold. There is no such thing as affordable housing in CA. San Diego is unrecognizable now with the apartment building frenzy. Parking is nonexistent. Cheap highrise apartment buildings block the ocean cooling winds and emit heat. It is shameful that developers continue to con our Mayors and city councils with this "affordable" housing scheme.
2
I'm the Mayor of a Californian town with over 11,000 residents per square mile where the schools are full, the streets are clogged (93% of residents leave town to go to work), there is no public transit that works, water rationing every few years, and running a budget deficit because residential development cost more to maintain than it returns in property taxes (2:1).
State politicians like Scott Wiener who are carrying the water for the trade unions, building industry associations and all their PR consultants and lawyers that fund their campaigns have no idea what they're doing. Instead of partnering with us NIMBYs, they're exacerbating problems up and down the State by name calling and pandering to those that want only market rate housing - not affordable housing.
Different towns have different challenges, and to think Sacramento politicians are going to engineer one solution that works as well in Cupertino as it does in Newport Beach is the height of stupidity.
Here's a new acronym for everyone, WIMBYs - Wall Street in My Back Yard. They're successfully commoditizing and collateralizing California real estate by snapping-up these newly up-zoned properties to package to investors who will have no idea what they really own. Beware!
Stop the blame game Sacramento. Work with us fix the quality of life problems and affordability challenges people really care about instead of making it worse by greasing the skids for market-rate housing to explode.
8
Of course it won't.
1. You have to have a place to build with the assumption that the only places available are away from the most congested built-out areas.
2. To use these areas you need additional transportation and utilities.
3. You need to make the new land on which you intent to build affordable.
4. You need to rewrite the definition of affordable housing.
2
Its fashionable to hate on bigtech, so people get a pass for preventing housing because it "sticks it to the techies." Too bad the techies make enough money to get by just fine. The people who are hurt are policemen, firefighters, teachers, nurses, and sanitation workers.
Let's call this what it is. Pure, unadulterated greed on the part of the homeowners around here. They want their housing prices to stay astronomically high. Never mind that their own children can't afford to live in the area they grew up in and love. In a way, it's a microcosm of the generational divide that the entire country is dealing with.
9
Fantasies of unlimited growth ...
8
The high cost of housing is the #1 reasoning for the housing crisis.
The housing market is being driven by greedy investors, house flippers and real estate brokers.
A well-paid person cannot pay $3,000 a month in rent and save $200,000 for a down payment, in addition to their other expenses.
All across CA,one bedroom apartments are $2,000-$4,000 a month (more in SF and parts of LA).
People with good jobs, rent rooms, sleep in their cars, or share apartments/houses with complete strangers.
Here in Santa Barbara, 4 people often share a one bedroom apartment
People with lower paying jobs end up on the streets easily and THEN the problems start with poor health, mental health issues (how can a person stay sane living outside and being treated like a subhuman?).
People are assaulted, robbed, raped, discriminated against and the biggest problem, arrested and harassed by police. Once they are arrested and lose their belongings, it is a downward spiral of injustice.
The problem is greed.
3
SF native: Better paying jobs does not equal a better lifestyle in CA because of living costs, unless you're one of 100,000 start up million(billion)aires.
CA pop: 40mil. Simple Math: 39,900,000 people who are house poor.
Urban planning is the only answer, suburbia is stretched to death with commutes.
7
Housing in California’s Inland Empire east of LA is relatively cheap. Why don’t the tech companies expand in that region instead of the Bay Area?
1
@Stephen Improve your schools. Perhaps then they will.
@Stephen Because there aren't enough tech workers in SoCal.
1
In 1973 I lived in San Francisco (in Pacific Heights, no less) in a great flat with views of the Bay, easy walks to North Beach, Chinatown, and the Marina, all on the modest earnings of a medical house officer. Had someone told me that this sort of life would become available only to the 1%, I would not have believed it.
Today at the end of our careers, my wife (a university dean) and I could not begin to afford that flat. And of course all those less fortunate are pushed inexorably down the economic ladder.
The extraordinary income inequality produced by the tech industry, exacerbated by the hubris of its leaders, has taken a heavy toll indeed.
11
Tech companies should pick a city in the Midwest and build a new hub around it. They'd be surprised how attractive a Midwest location would be for a lot of people.
I'm from the Midwest and watched nearly all of my high school friends scatter to various major cities on the East and West Coasts in our 20s, searching out great careers and the glitz and glam of those cities. Now in our mid-30s with families, nearly all have either moved back or are trying to.
It's not just the cost of housing. It's that life is just simpler, esp when you have a family. In our city, you can be pretty much anywhere you need to be (work, school, doctor, store, shopping), in 15 minutes, 20 min tops. You don't have to search for parking or time your visit to the grocery store for less busy periods of the day in order to get a parking spot. Waitlists for daycares are maybe 3 months, not the 18 months I was quoted in San Francisco. There isn't pressure for hyperscheduling kids, or pressure to keep climbing climbing climbing the corporate ladder. I don't need to wake up at 5 to sign kids up for swimming lessons that are full by 5:01.
The amenities that attracted us to the Bay and other coastal cities in our 20s just don't matter as much once you have a family. Hunting down the happy hours with celebrity mixologists, pursuing some obscure hobby, or spending $40 on brunch just don't have the same appeal. I'm happy being home for dinner at 530 with my family every evening.
23
Big enough cities that have colleges with large and strong engineering departments. Pittsburg Carnegie Mellon. Madison univ of Wisconsin. Ann Arbor univ of Michigan. Etc
3
There is a huge unused chunk of available land in the San Francisco Bay Area: it just happens to be underwater.
The south end of the Bay is very shallow, and it is right next to the heart of Silicon Valley. Build on stilts, leave the water below: there is room for at least four square miles of towers (50 stories or more). Make it all walkable, bikeable, solar powered, and connected by tram into the heart of San Jose and Mountain View. By planning ahead for once, instead of sprawling at the edges of what already exists, this could be a beautiful, planned, liveable new three-dimensional city.
The problem, of course, will be California NIMBY attitudes. But this sort of project would not be environmentally harmful. Dense residential building right next to the jobs is what California needs, both from human and environmental perspectives.
1
@Looking-in The bigger problem there is earthquake risk. Reclaimed land tends to liquefy, as the residents of San Francisco's marina district discovered in 1989.
8
@Will I'm not talking about reclaiming the land, I'm talking about burying the stilts deep in the bay floor. Many earthquake-prone regions build upwards. But I admit I am not an engineer.
@Looking-in That would probably be prohibitively expensive.
3
Stop moving people to jobs. Start moving jobs to people. California has plenty of room and affordable housing outside the core population centers. But business wants a large and ready pool of workers crammed into a small area. This isn't sustainable, and long commutes are killing our workers, communities, and our environment.
7
The "problem" will work itself out if you just stop tampering with everything. More taxes and more regulations to "fix" liberty is a false strategy. Free markets price things correctly automatically. If/when the price is too high, they will come down or more housing will be built. People and companies will move to where they get an advantage, but that decision requires accurate pricing, not centrally planned pricing and product limitations.
1
There is always a subtext to any discussion of the "housing crisis," and it is the interests of builders/developers. These interests are always hidden behind a thick cloud of rhetoric and an attachment to the "homeless" crisis (which is a public-health/drug disaster that has almost nothing to do with the "affordability" of housing).
There is a behind-the-scenes grand alliance of progressives and developers(never announced, but discernible in progressives' policy utterances): builders wanna build and they wanna build big. They are not interested in dreaded (and suddenly evil) single-family housing: they want rental units which will give them a steady income-stream. They do NOT want too many housing units, for obvious reasons--thus the alliance.
Progressives do not like the idea of individual ownership; their instinct is to build collective solutions (always "solutions" to apocalyptic problems they have proclaimed ) that government can more easily control. California, having reached the limits of sprawl, now wants to infill and densify. Given that the progressive Democrats have created this crisis, the builders lobby will get its way. Look for an explosion of "small is beautiful" rhetoric (note Mr. Dougherty's sneer at "back yards"). Massive tear-downs and build-ups will result. Bet on it.
3
We retired out of the Bay Area. Consider this: there is no political will to simply build a new bridge across San Francisco Bay or continue BART around the Bay. The only new bridge is a replacement with the same capacity as a bridge from the 1930's. My woodworking business was in San Francisco and I was living in Berkeley. Those 17 miles took 90 minutes to drive, day or night. The last time that job creation and housing starts were in balance in the Bay Area was, I believe, 1975. then came Prop 13 and tech.
5
What's happened in California validates AOC's position on Amazon i New York City. Jobs for the few, gentrification, rent increases, more homelessness.
3
“For 50 years, California has been designed around the idea that everyone will have a single-family home with a yard...”.
These days you’ll regularly see quotes like this, implying that such homes are a wasteful extravagance. But the hard fact remains that 50 years ago, a home with a yard was the standard for American middle-class life.
But that America is now long gone, and no sea of red hats is going to bring it back, because the decline of home ownership is one of the strongest metrics around for showing just how far we’ve declined as a nation.
4
Why does this article not say the phrase “Proposition 13”?
You can’t talk about their extremely messed up housing market and local revenue issues without it.
5
@Lindsey Californians already have some of the highest tax bills in the country, Prop 13 is not the problem.
8
@Will but Prop 13 is why people don’t sell their homes. Better to rent them out than sell. Or pass that tax advantage down to your kids.
1
Simple tax the real estate property like texas and new jersey and the problem will solve itself .
2
@K Singh Prop 13 caps property tax rates at 2 percent and polls show Californians, for all their reputation for liberalism, do not want to repeal it.
1
To Innovator: Sorry .
People do not WANT to live in Stockton, Modesto, Merced, Fresno, and Bakersfield - farm communities in flat farm country
Too hot in the summer, to cold in the winter, and the schools are awful compared to Paly and Gunn Height
For a demonstrated alternative, read
"How Utah Became the Next Silicon Valley"
The New Yorker 2/2/2015
2
@Ex-Californian If I had a dime for every "next silicon valley" article, I could probably afford a decent home in the original Silicon Valley.
3
@Ex-Californian Plenty of us would. And the schools would improve as a result.
1
Apple, Facebook, Google et al aren't moving to Cleveland no matter how cheap real estate is out there.
Apple likely picked Austin for several reasons (1) Favorable tax climate (2) central location between the coasts and close to a massive port in Houston but without the flood issues (3) Land. There's lots of it.
There are the side amenities, too, like a several universities nearby (UT and A&M) and it's beautiful country out there with lots of rivers and hiking. That's why it's way more attractive than Cleveland or Biloxi. Yes, it's hotter n heck for 4 months out of the year but it beats 6 months of bone chilling weather like in Flint, MI.
And I write all this not as a fan of Austinites. But they're still more tolerable than Dallasites.
7
@Mich Facebook and Google recently broke ground on sites around Columbus. There are a lot of places with a favorable tax climate. Austin is not centrally located based on where people live. The population in a 500 mile radius of Austin would be drastically smaller than the population within a 500 mile radius of Cleveland. Cleveland is actually a port city on Lake Erie. Plenty of land there too.
3
We came, we saw, we wrecked it.
4
I propose a Homeless Tax in California. Build houses and apartments.
The jobs that keep reported labor figures up are minimum wage with few if any benefits. The gig economy is a an economy that relies on tax-payer financed services for health care. Meanwhile housing--new and not new--is unaffordable without public assistance for many people. New housing alone will not help raise standards of living for anyone but the developers of new housing.
3
Apple's 'investment' in housing is nothing more than a publicity stunt. If they want to solve the problem of homelessness they have to provide living wage jobs...like Henry Ford did in 1914 when he paid workers $5 a day, for eight hours of work - so they could afford a car. We keep hearing about a bustling U.S. economy, but that argument (and the Government statistics that 'prove it') are now tired and worn-out, given huge number of unemployable college graduates in this country.
3
@W Ford paid his workers $5 a day to reduce turnover. He employed a few hundred thousand people during the heyday of the Model T, a drop in the bucket compared to the 15 million that were sold.
Henry Ford also built a neighborhood of nice houses in Dearborn, Michigan for Ford employees. These homes were so well built with many nice features they are still sought after today. My niece and her husband live in one.
3
California went from 20 million residents to 40 million in a generation and is well on its way to 60 million by mid-century. Good luck having a decent quality of life when it’s that crowded.
14
Yes. New housing is being built but it just gets bought/rented up by newcomer tech and related workers, whether new to CA or new to the particular city. Many of the rich also buy up both houses and apartments and either keep them largely vacant, turn them into illegal hotels via Airbnb or similar often altering neighborhood character for the worse (see Orinda shootings), or find loopholes (or fraudulent ways) to jack rents and force out middle and working class longer term residents (and inhibiting their adult children from returning home to their city) in favor of wealthier renters or in order to flip condo-ize the apartment units and demand prices well beyond what current tenants or anyone making under $200,000-400,000-plus a year can afford.
6
Population projections for California are down from even 10 years ago. Recent reports show that California’s population growth is the slowest in the state’s recorded history. Only 186,807 people were added to California in 2018. At that rate, it would be 107 years before CA would reach 60 million, if ever.
4
Big companies purporting to solve the crisis they cause. What a joke!
1
The article early on pointed one of the core reasons for insufficient affordable housing in California - "intransigent local politics". Then the article proceeded to talk about everything else except local politics.
Well, at least say something about "needing political leadership" at the state, county and city levels ! Which, by the way, are all dominated by the Democrats up and down the state.
Perhaps, NYTimes considers Democrats dominated local politics is taboo subject ? Just wondering...
4
Company housing ... Is this the new company store?
I sit here in very liberal downtown Portland, Oregon. I like it here for many reasons, one of which is that I'm liberal too!! The negative side of being here? We are surrounded by tents, needles, feces, rotten clothing, half-eaten take away food containers and hundreds of people whose major activity seem to be sitting on the ground waiting.
There are services offered to the homeless: an indoor place to sleep, especially abundant when the temps dip, lots of food; I see half of it smeared on the streets. A couple of days a week we have a homeless buffet offered. free needles ( a must have, I think ) clothing, used by the recipients until too dirty to wear and then used in lieu of toilet paper before left on the sidewalk.
I don't know what the solution is to people living on the streets is. I do know with absolute certainty that no idea/program will be successful without a 'buy-in' from the parties being helped. As it seems to be, at least here in PDX, people in need act like limp rags that have a sorry past, a dismal present and no vision of a positive future. Who is in charge of, responsible for that individual sitting in a doorway if not that person him/herself?
8
I don’t blame them for opposing the housing of it looks anything like the units on the left of the Vallco pic. Off putting faux urban.
2
Every time i read about the cost of housing the same dumb things are talked about. In reality people already living in communities decided they like things the way and use zoning to limit building housing units. The price of the existing housing increases. The increase can be rapid if they happen to get lucky economically and a major industry booms. Lack of affordable housing is a choice made by the local residences. No amount of money is going to change that. If you can't afford to live there move somewhere else or get the local government to change the zoning laws to allow denser housing. Obama had a blue ribbon commission to figure out affordable housing. The answer change the zoning laws. This is not complicated. Just stop complaining about the choices the local residents have made.
4
1) If these companies have money they want to put into housing maybe they should be taxed adequately so we as society can decide how this money is used.
2) Building is Austin is not the solution, that city is a huge sprawl already. There should be some master planning to locate jobs where housing exists. Possibly distributed throughout the small/medium sized cities that are dying across the US.
4
@DRM,
While I agree that inequality of distribution of jobs is a real problem, a lot of the dying cities are not well equipped to relocate these jobs to.
A lot of these places lack reliable high-speed internet, which is a necessity in this day in age, especially for the kind of jobs you have in mind.
If you are in a rural area there is also the issue of having to drive long-distances for everything. If you need medical care, especially something beyond primary care, it could very well take most of your day given the distances involved.
It's also not terribly practical to have to spend a good portion of your day driving to the airport when you need travel somewhere, especially if it's only a regional airport that will require connecting somewhere.
These are just a few of the many issues that would be involved in relocating locating jobs to many of of the dying cities you mention.
@Louis
I appreciate there are issues and some cities and towns are not a good fit but that’s where master planning comes in.
1
You're analysis that a single BMR unit costs about $450,000 jibes with my empirical experience.
As you point out, the tech commitments would create about 10,000 "affordable" units. But, Facebook alone plans an expansion in Menlo Park that would add another 15,000 employees.
So you can see the issue. In fact, Redwood City recently built out its downtown plan, including 2500 new rental units. But these units never made it to the market. Instead they were snapped up, en masse , by the various tech companies who use them to house their employees.
2
And FB et al do NOT tend to hire long-time locals to fill those new positions.
3
@Calian Yes. For analytical purposes, since California is at full employment each new job created attracts one new out-of-state resident into the area. (Even if an employed existing resident takes a "new" job, an out-of-state resident must back-fill the abandoned job.)
The 15,000 FB jobs will create demand for 15,000 units, and its likely that the more highly paid future FB employees will crowd some existing lower-paid resident out of the market. Meaning, essentially that FB plans to displace another 15,000 existing residents.
We don't see it that bluntly because everyone wants to be hopeful, but that's the fact of it.
2
If it costs an average of $450,000 to build a small, basic apartment in high-demand housing areas in California, as the authors suggest, then somewhere something is wrong. I suggest those types of figures are either artificially inflated, or contractors and developers are fleecing property buyers with astronomical and unnecessary mark-ups on the sale price strictly designed to increase their profits. And that is simply unethical because they are supposed to be building affordable housing. This only compounds the issue of unaffordable housing.
3
Why won't $4.5 B solve housing crises? Because, as Abhijit Banerjee explains in work on the economics of poverty (a relative thing) and work for which she won this year's Nobel Prize in Economics, it's very complicated, with a great many small causes that need a great many small solutions.
Big, expensive, global solutions can never work. They just waste money (though they might make the benefactors feel good - for a while).
The "solution" will be a "basket" of lots of small steps that can be chosen and adapted to local situations and neighborhood constraints.
This is like the idea of professors Socolow (a physicist) and Pacala (an environmentalist) from Princeton, something they refer to as their "wedge game" which they applied to drivers of climate change.
Though the headlines are less splashy, big tech should find lots of local mechanisms through which to develop housing options.
4
I grew up a few miles from Vallco mall. Apple doesn't care about affordable housing. They want their employees to live as close to work as possible. Both of the Apple campuses are within a mile of their proposed housing development.
We need help from the government, not tech companies trying to fund luxury apartment complexes.
5
Why the writer avoids the single largest barrier to new housing in California—NIMBYism—is beyond me.
Not In My Backyard. And here’s why.
Overcrowded schools, traffic, increased services (law enforcement, fire) costs are Never mentioned in Local planning meetings—except by we citizens. Or the developers offer paltry solutions—one developer offered to “donate” land for the 2 new schools his enormous development would require, leaving the citizens to pay for building and staffing them.
It ain’t just building X number of units. Address the full burden of increased density.
And stop letting the Zuckerberg types buy a whole block of homes in already dense residential neighborhoods in Silicon Valley. They want privacy? Commute further.
7
Someone raised the point that for the tech behemoths, they should build campuses in underdeveloped communities. I say take it one step further: destination branch office like club Med.
For employees who like to ski how about an outlet on our northern border; like fishing, how about a gulf state; or if you like blueberries and moose how about Maine? I’m sure these creative techies can come up with some better ideas.
The days of the “flower districts” jewelry districts etc where like-kind businesses congregated are over and not necessary unless stealing secrets is the goal.
3
In 1959, the Army Corps of Engineers estimated that by 2020, the Bay Area would be home to 14.4 million people, in reality, it was 7 million. Part of it was they overestimated national population growth (420 million instead of 330) but even so, holding the Bay Area's population constant as a percentage of the national population, it could be home to 11 million, or 60% more. Many of the undershoots came from the North Bay, whose population has reached only a fraction of what was projected. They predicted that Marin County would have almost 800,000 people by now, who would be living on the Marin Headlands and along the coast all the way up to Point Reyes. That never happened, so instead we got just 250,000 people there. Napa County was to have 650,000 people instead of 140,000. Sonoma would have 1.1 million instead of 500,000. But the residents, obsessed with preserving the vineyards, said no. I frankly cannot think of any urban area in the world that has cordoned off so much valuable real estate to new development.
1
@Will And rightly so. Build condos and office buildings in the vineyards and you end up with Los Angeles
.
More than Amazon, Google or Apple I blame lax and complicit city governments for the crisis in affordable housing. Here in Seattle the city gave away the farm to Amazon, letting the company do whatever it wanted. Amazon rewrote the zoning regs. The result is lack of affordable housing, traffic congestion, etc.
6
Plenty of room in California. People can live and work elsewhere in the state, away from their company's main site, away from the super high prices and congestion. But those places don't appeal for various reasons; they've never attracted the hoards that invaded the coastal areas. There's always been a mentality among those migrating to California, they can't miss out, they've got to have it all.
2
The commute is too long in many cases. My husband and I both work in San Francisco and need to remain in these jobs. A few years ago we wanted to buy a new home in a distant suburb of San Francisco, Oakley. The market rates were affordable unlike homes in or close to SF. But first we tried the commute. Took 2 hours for him and 1.5 hours for me. One way. We gave up the idea of home ownership. Maybe after we retire and leave SF we will buy a house.
Having lived in the Bay Area for twenty years, but no longer, I’d say the problem is transportation infrastructure. Bay Area cities are linear in nature due to geography, and are in desperate need of connection via rapid transit not highways. There’s room for affordable housing on the other side of the mountains, but no way to get there quickly and cheaply.
4
Throwing money at a problem created by having too much money floating around is not going to make the problem much worse.
We need to take money out of the equation by getting rid of exorbitant building permit fees and ridiculous zoning laws. Enforce building codes, not zoning laws! California should waive all zoning laws and permit fees (but NOT building codes) till the housing emergency is over!
2
The real reasons why affordable housing is not being built, whether it be market rate or subsidized through density bonuses are: 1. NIMBYism; 2. over regulation enforced by deep state operatives at the state and local level in particular; 3. nonsensical environmental regulations, and; 4. office holders who do not have the political will to fix this abysmal situation.
3
Prop 13 ensures that rising home values are all benefit and no cost for existing homeowners. Real example for a modest 1100 square ft home on a small lot, in Sunnyvale, Ca: It climbed in value over the last 30 years from $180k (1989) to $500k (1999) to $1 million (2009) to 1.7 million (2019). Now imagine proposals to build high density housing nearby. You are pretty used to the idea that your home is worth nearly 2 million dollars. Your property taxes are based on your original purchase price - around $400/year. The new housing could cut into that value, significantly decreasing your personal net worth. Of course locals fight it. The status quo works for them, even as it makes the area all but unlivable for newcomers, pushing the teachers, restaurant workers, car mechanics, and home health aids so far out they can’t even afford to commute in. There will be no progress as long as decision makers are so heavily incentivized to block it.
10
Prop 13 also applies to all property. California should instead have a homestead law that allows lower taxes on a single residence per tax paying California resident. The single residence could also have a limit for the lower taxes; for instance, lower tax rate up to the median cost of a single residence in the same county. Then, California could add an additional tax on rental properties, empty properties, and other properties that are not being used by current residents.
Commercial property including apartments owned by corporations should not be covered by any homestead law or prop 13 style rule. Take some of the profit out of homes. Let the tax law encourage the owners of a home be the residents of that home.
If people complain that prop 13 allows elderly to stay at home, increase the homestead benefits for elderly who cannot afford taxes on the home they currently live in by letting the excess taxes not afforded be accumulated and paid at sale of the property. But any tax breaks should not go to land lords (in state or not) or people who own a vacation home in California.
2
Robber Baron mentality. Billions of dollars accumulated from information exchange systems redirected into rent collecting systems to retain that wealth harvesting model. The wealth that they accumulate being generated by activities which they do not do.
The housing will be directed at small and cheap places to live but demand will jack up the prices out of the affordability of most people, and the value of the property owned by these companies will appreciate. It’s like buying up salt marshes and developing marinas.
2
One small step that the mega-Tech behemoths in Silicon Gulch have avoided is to build high-rise housing near their campuses (walking distance) for as many of their employees as possible. This would reduce commute and parking problems, reduce traffic congestion, and acknowledge that with their mega-campuses they have exacerbated the problems. I know, I know people don't like high rises. But you can't have it both ways, and the costs of urban sprawl are just too great, something fundamental has to change. And they could use some of their green space for public parks and soccer fields, providing real benefits to their neighbors.
3
@Allan Lindh The reason they don't do it is zoning ordinances don't allow it.
2
Hey Liberals, if you really wanna to change the
political debate in this country, share some of your jobs with us here in Trump country! There is a lot of affordable housing in the vast tracts of America’s former manufacturing hubs of Ohio and Pennsylvania, or the former coal villages in Kentucky or Tennessee. Wanna really stick it to the Trumpers? Drop an Apple HQ in Memphis, TN, a Google R&D facility in Erie, PA, a Tesla plant in Cleveland, OH. This “affordable housing” canard is at the root of our current national political woes.
10
I couldn’t agree more. Why some of these tech companies aren’t looking to expand to places where there is already available affordable housing and a work force hungry for jobs is beyond me. You can’t stuff a bazillion people into San Francisco if they won’t have a place to live once they get there. Makes no sense and is clearly a completely unsustainable situation.
5
They don’t move there because they are tracking talent patterns. There aren’t enough machine learning PhDs concentrated in Oklahoma City to build a campus there. They need to be where the talent is concentrated.
9
While I don't doubt desirability is a role, another question is whether the cities have the infrastructure in place to handle technology companies.
Cities like Cleveland and Memphis may have sufficient high-speed internet, have major airports in close proximity, and other things associated with a major cities and could work (at least in theory).
However, smaller towns in rural areas are problematic for a lot of reasons. For one thing, they do not always have reliable high-speed internet.
Having to drive long distances to the nearest hospital or the nearest airport is also deal-breaker for most major companies and employees.
2
It’s a start.
1
People do not want more housing because traffic is unbearable already. More housing = more traffic.
8
@Wayne then build more freeways.
1
Many major United States cities have affordability issues, though San Francisco may be the most pronounced.
I currently live in a city that is having affordability issues, though perhaps not on the scale of San Francisco, it's a real issue, and if the NIMBY crowd gets their way, Denver could very well become San Fransisco.
Making housing off limits to anyone who isn't wealthy is not progressive, no matter how you try to spin it.
The larger problem is an economic one. The best job markets are increasingly concentrated in relatively small number cities, where affordability is a real issue, while the cheapest housing is found in areas that don't have great job prospects.
While there are still areas that are "in between" and have both affordable housing and a semblance of decent job prospects, they seem to be diminishing, so it is not always as simple as simply moving to a cheaper location--you have to weigh the cost of living against the job prospects.
5
The first reason it won’t solve much? In these cases, it is usually because money is thrown at the problem. Wrong.
Sustainability is more than just a feel good buzz word for earth friendliness. To be truthfully sustainable, the whole encompasses economic and social sustainability. That means more than slices of the production, supply chain, and end products as the harmful parts are outsourced with dubious oversights. Tesla, for example, is not a zero emissions buggy (although you can buy one with a license plate that says so).
To the point, if the problem of homelessness needs to be solved, then the wise will understand it can only happen by solving the problems of the homeless. And like all living, homeless or not, the problem doesn’t end with ”Done. Next?” It requires a different level of care, a different system, and it must “make a profit.” If the system does not do that, it is neither economically or socially sustainable, and the homeless problem will have to die with the homeless.
1
The Bay Area is already completely overpopulated. The freeways are choked as badly as Los Angeles freeways, and the air quality is in the yellow zone for most of fall.
Had the government of California really cared about turning the Bay Area into a fully functional city, they would have built the transportation and other infrastructure necessary to support a city.
The Bay Area in its current form does not need more people moving in—it needs more people moving out.
10
OK, let's play this out. We build high density housing units until the Bay Area looks like Toyko. Great. Where does the water come from to sustain these people? How do they get around? Where do their children go to school? The ugly truth is that developers are not required to make any showing when they submit their development proposals that life in their high density housing units is sustainable. And local governments are prohibited from asking. This is the law in CA. It's easy to label people who ask these hard quesitons as "NIMBYs", but I have yet to hear any rational answers for how we provide any kind of quality of life for all of the people we are proposing to house. California's infrastructure is already at the breaking point. I would be more impressed with the offers of Google, Apple, Facebook, etc. if they were proposing to build desalinization plants and public schools.
13
The best part of living in a tech-subsidized 'i-pad' will be all the little gadgets embedded into the units, always ready and listening and watching should one require assistance/services.
It will be just like living in an app store!
2
Myself and a few other volunteers canvassing San Diego neighborhoods for local politics, we were amazed at how many homes were vacation rentals. If the state imposed a 30 day min. on vac. rentals you would improve the rental market (and housing) in a flash. The other 800 lb gorilla in the room is the low interest rates (a.k.a."cheap money") pushed by Capt. Bonespures and Wall Street. The short term thinking has pushed the middle class hope of home ownership further out of reach. The inequality graph just keeps going up and up.Sad.
5
American neighborhoods need to go vertical. Vertical, multi-story neighborhoods, in addition to reducing urban sprawl, commuting times, and the cost of housing, have a lower environmental footprint.
2
@Neil Buildings get more expensive per square foot as they get bigger, because you need stronger supports plus more stairwells and elevator shafts. The solution is to build out.
1
@Neil welcome to earthquake country. It is not cheaper to build up.
Dirty word in CA - deregulate. Or specifically outlaw the nimby rules. Density will follow allowing more people live near work. Good for life, good for the environment. The problem is not available space as the mall of the story shows. The problem is us, as in those of us living comfortably who want others kept out.
1
More details on the suit against the proposed redevelopment of the Vallco mall would have helped shed light on the deeper reasons for the lack of affordable housing.
4
The first obligation of any company is the stock holder. The second is the customer. The company is not responsible for housing their employees or locals. If the town allows the company to do business in their borders and collects taxes from them... the infrastructure/housing problem are the towns to solve. The real problem is politicians incapable of seeing the ramifications of their decisions.
1
All well and good until those companies cannot recruit talent at any cost because of there is nowhere to live. Which is why this is just the tip of the iceberg and throwing $ at it from any angle is not a solution on its own.
And please tell me why when the very product these companies are producing makes it less necessary to conduct any social interaction in person are they insisting on growing their footprint in the one place that is clearly NOT sustainable.
3
@JerseyJon
We're a capitalist system. Cupertino knew what was going to happen and they did nothing accept take Apple's taxes. It's up to Cupertino and the housing industry to alleviate the problem. By making a company responsible for housing we are asking them to replace a function of government and that should be frightening to to a democracy.
@marrtyy Really? providing housing is a function of government? Nothing in the Constitution or CA State Constitution about housing.
Heck, CA can’t even get farmers to stop planting almond trees (1 gallon of water per almond) during a drought.
While often accused of being socialist, CA ain’t.
Do our elected officials have nothing to do this? When I pay my taxes and vote for elected officials, I don't expect them to improve the functionality of my internet browser...that's a Tech companies role. Similarly, ensuring clean drinking water and putting policies into place to solve a public housing crisis is the government's job. Why are we looking to Tech to solve these issues? CA has some of the highest taxes in the country, so our Gov certainly has the resources. And where is the mention of Prop 13? Excessive construction regulations that have increased 10x in the last 20 years? Local governments actively voting against housing complexes that 'ruin the small town feel'?
So what's the solution...kick Tech out of California? Banish them for creating so many jobs and making California the world's fifth largest economy?
When we continually make Tech the scapegoat for societies problems our elected officials loose the incentives to solve the tough public problems, like housing.
2
California currently has about 8.5 million residents who were born outside the US. Is the housing crisis only one of supply?
2
I hope you do a follow up story on Austin. The blowback from the California crisis has been landing in our laps for years and you could have written a similar article on the affordability crisis here that is in large part due to the same exact factors. Silicon Valley created Silicon Hills and thus Austin became the cheaper option.... fast forward and locals can’t afford to stay here. Plus Texas has the second highest property taxes in the country. We have been called little San Francisco for awhile but that was more of a cultural nod. Now it is with all the same crisis. This phenomenon is akin to city wide gentrification leaving locals and retirees in a lurch. Do an in depth article on Austin. Show the big picture. I’m sure the corporations aren’t considering putting funds to other cities that have suffered from the same thing. They are not seeing the big picture and the far reaching negative effects. The ripples run far from the stone.
2
Texas does have high property taxes, but along with Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, and Washington, Texas does not have a personal income tax. In fact Texas passed a constitutional amendment yesterday virtually guaranteeing Texas will never have a personal income tax.
We still have to pay for schools (grudgingly) and roads (well, except for Rick Perry’s toll roads). Hence high property and sales taxes are high.
This housing crisis is a direct cause of the homelessness crisis. As mentioned in a previous NY Times article, California has one of the four highest homeless rates not because of the warm weather, but because of the high housing costs that push people into homelessness.
Local governments and citizens can’t complain about the homeless in their sidewalks and parking lots, but then refuse affordable housing in their backyards.
Californians thought the Measure H tax would make homeless people magically disappear, but they need affordable housing. We owe it to our fellow citizens.
1
@NYLAkid
You’re mixing up two problems. Who starts living on the street because they can’t afford housing near their workplace? Homelessness is largely a mental health issue - housing affordability addresses commute times and labor force growth. We can’t address either properly when we mix them up.
3
Income inequality is at the basis of lots of our problems and as we move more into automation it will get worse. Distributing the wealth is going to be a key issue in our survival. This problem is world wide and as we move into automating many many jobs it will become a cancer.
Yes, housing costs are a big problem and the "not in my neighborhood" is a major cause.
Unfortunately its not just decent housing its redoing the way lower income people often live. I saw a very nice project in the Mission district of SF go ,in two years, from a well maintained, safe one to a junk filed sidewalks and drug dealing. The police threw up their hands and many neighbors moved as the neighborhood slid back to a slum.
2
Visited California last year.Body-surfed the Pacific. Saw El Capitan and the Giant sequoias. Three items off the Bucket List of an Old Man.
California is a Phenomenal place. It makes the East seem like a toy train set-up at Christmas.
Crazy traffic, however, and absolutely insane costs of housing in the coastal areas and their exurbs and suburbs. There are massive political and cultural differences between the Central Valley, the North and the coastal cities. Like many another place, California is under tremendous strain.
6
I would like to see two more things in this article:
1) a breakdown as to why it costs $450K per apartment unit. How much of that is building costs, land acquisition, and what are the other costs?
2) as someone who grew up in the New York area (Long Island) and now lives in northern California, I would like to see a comparison between northern CA Bay Area housing prices and New York area housing prices. Silicon Valley is essentially the Long Island of northern California if, say, Hicksville or Stony Brook had turned into a hub of global innovation.
4
If big tech really wants to help Californians and our country in general they will start instituting telecommuting on a massive scale and LEAD THE WAY! Housing and traffic problems would practically be solved if only employers allowed their people to telecommute. The paternalistic work model is what has not caught up with modern society. I have the kind of career amenable to telecommuting (cartographer), yet nearly every job I see in the Bay Area where I am looking, and where tech is master, requires being there in person. And that means working in a part of the city where even I could not afford to live - and I’m an educated techie! Spread those tech jobs throughout our country, even in red belt middle America. Invest in tech education broadly and not only will traffic and housing crises abate, well start seeing that nasty red belt turn blue. Seriously.
6
@Christine Feinholz We do work remotely, in ever larger numbers. Rent is just really high because supply is low.
How about we build hundreds of tree houses to give free homes to part-time forest rangers and fire fighting volunteers? ... two birds with one stone.
1
"... as Vallco illustrates...: how to get housing when local governments and homeowners do everything they can to prevent it.
The thesis is false.
The housing project was approved by the city. It's not evidence that cities reject housing. It's not "stuck" in court, it's moving through court. I can cite dozens of office projects that were sued, delayed, and built
Pipeline delays don't cause long-term housing shortages or office surpluses.
Redwood City's downtown plan called for 2500 new units, all built quickly.
In nearby Menlo Park, neighbors used an Initiative to reduce the office portion of its Downtown Plan not the housing. The City sent back a Stanford office/housing project because it lacked enough housing units. Meanwhile on remaining parcels zoned for office or housing, office is being built. Not housing.
Why does Stanford, which desperately needs housing, build office rather than housing until the City forces it to build more housing?
How do you explain any of this?
In fact, there is an insatiable world-wide demand for companies to herd in the Bay Area. Market returns on office are so much higher than those on housing that when available sites are zoned for both they are built as office, even Stanford sites.
Office crowds-out housing. Pure economics. Corporations demand office, individuals demand housing, there is no market parity .... until the corporations themselves demand housing.
And. Yes, those proposals are self-serving.
5
How ironic. These companies are the problem. The only solution is for them to stop insisting that tens of thousands of people who work for them absolutely have to have their jobs based in suburbs of 20, 30 or 40,000 people, on a strip of land that’s about 20 miles wide, with mountains on one side and water on the other. Everyone I know who works for Google, Facebook or Apple and moved here after 2012 doesn’t even want to be here. They can’t afford to buy houses, either. Move some of the jobs elsewhere, already. Just about everywhere in the U.S. needs them more than the Bay Area does.
I’m one of the many people who can’t afford to buy a home but companies paying for apartments to be built (mostly for their own employees) will not make a meaningful difference in the housing market. They need to move the jobs elsewhere. There are many lovely places an hour or two away from Silicon Valley.
8
One BIG thing missing in this article is the role of public mass transit in addressing situations like this. For decades, Californians failed to get serious about mass transit. Not only they didn't invest in public transit, they actively blocked them (see San Mateo county successful efforts to block BART extension to the South Bay, and more recently City of Sunnyvale blocking BRT lines in El Camino).
I don't know why residents of Cupertino sued Vallco Mall re-development. But I have heard residents questioning how new large housing projects may worsen the already nightmarish traffic.
Bay Area local governments need to come up with a comprehensive mass transit plan and get serious about implementing it.
8
@fari
The desire to block public transit comes from the same place as the desire to block housing. Ultimately, people who block these efforts don't want more neighbors. They've got theirs and will shut the door to the American dream behind them.
6
@fari voters approve mass transit expansions in the hope that other people will use it and reduce congestion. The Bay Area could definitely use more freeways, such as the oft proposed Southern Crossing and the Bayshore freeway to go along the coast of San Mateo County, to relieve the eternally congested 101. And frankly, SF's freeway revolt went too far, with the Golden Gate bridge dumping all its traffic onto surface streets.
@Will The Golden gate Bridge has been dumping cars onto City streets since it was built. There’s no land for a freeway there. ??
I just left CA after 47 years due to overcrowding on the southern coast and cost of living. The State is impossible with all the building restrictions to keep up with demand. As a result, housing is through the roof for purchase or rent. I sold my home for (5) times it’s purchase price 21 years ago within 12 hours of listing it after getting (4) over ask offers.
1
Occupancy density is increasing in many areas of California. We used to have two people living in our house and now we have four. The state has allowed homeowners to add additional housing units to their property as well. Some of this increased density has been offset by AirBNB style short term rentals but overall the market will respond to at least mitigate some of the problems.
It's not actually the costs (materials, labor) are so much higher here (apart from raw land), it's that builders and developers know they can charge overinflated prices for the finished product, purely due to demand.
A lack of regional planning allows companies to continue building commercial projects (municipal and County planning boards have never met a commercial development permit they didn't love and rubberstamp), worsening the job/housing imbalance, forcing people to drive two hours each way to and from work. What must/should be incentivized is for the tech companies to create tech hubs out in the Central Valley towns of Tracy, Manteca, Modesto, where hundreds of thousands of people commute from every day. Housing cost is lower. Commercial space is readily available. This would solve the commute problem, decrease greenhouse gas production, lead to better quality of life for the hundreds of thousands of people stuck in their cars every day.
But, in the continued insane and mindless rush to build build build make more and more money, the quality of life here in the Bay Area continues to go downhill due to overcrowding, congestion, traffic mayhem, and a general loss of community values.
4
The problems with housing stock in California are as follows: limited land space in urban areas, limited water supplies (California is a semi-arid climate and is afflicted with multi-year long droughts), and greedy developers. Thousands of housing units, both single family and apartments) have been erected over the past five years. They may have a few designated “affordable” units, but the vast majority are sold for $400,000 (at the very lowest price) on up into the millions. There are limited resources for life in the arid west and that will not change.
6
Move. When the jobs aren't being filled, salaries will increase to the point where housing is affordable. Salaries will never rise if the housing is subsidized.
5
Not true. And not easy.
2
@Andrew,
It's not quite that simple.
Salary increases, no matter how significant, aren't going to change the fact that there simply isn't enough housing to support the number of jobs out there. Unless that changes, affordability will remain an issue.
The best job opportunities are increasingly concentrated in a fairly small number of cities, so moving to some place more affordable might result in diminished job prospects.
3
Palo Alto and Cupertino, both towns with small geographic areas and a well entrenched population of rich folks, fight expansion. Meanwhile Oakland has allowed large scale dense development since around 2000. Here the skyline is crowded with new construction while the space under the freeways is jammed with tent cities of the homeless.
But we can't really talk about that can we. Forward with deregulation!
3
@Chris Martin It’s the public schools in those towns. Top 5 in CA. Cupertino public schools produced Steve Jobs, but his kids and Zuckerberg’s are in Palo Alto public schools.
Want to create incentives for companies to open new centers in red areas? Start with the schools
These large tech companies could announce that they will stop adding jobs in California and move them to other locations in the US. Preferably red states with sparse populations where progressive minded tech employees will turn the states purple, then blue. Some of those states have great skiing!
8
@Flipside maybe Houston and Dallas should make themselves prettier to draw away the people who want to live in the Bay Area.
To get affordable housing, abolish zoning (and connection and permit fees). Let builders build wherever and in whatever form they think they can sell or rent. Let the only restrictions be the fire, plumbing and electrical codes, for safety.
What they build won't be "affordable", but it will depress prices and rents across the market, making older and less desirable housing affordable.
2
@Jonathan Katz i believe Houston has lax zoning and the problems there are evident. Chemical plants in residential neighborhoods only leads to disaster such as flooding and contamination.
10
Oh, sure- just throw up any old thing that will fall down in a decade or less. Especially, a bad idea in earthquake and fire prone California. Plus, what will these home owners use for water??
3
Always about money. Housing is expensive. Homeowners are therefore cautious of land use changes that may affect values. Homeowners vote so politicians respond and try to strike a balance so as not to be voted out of office next election. Taxes are high because local governments pay well. In some instances too well — over $300,000 annually for top executives like police and fire chiefs, city managers, department directors, etc. It is hard demanding work. But do we need dozens of cities with dozens of executive staffs, each with their own set of development guidelines. Consolidation of local governments should be high on the priority for both the state and private business.
5
Fill in the Salt Flats, pave over the empty space on both sides of 280, put an expressway between San Mateo and Half Moon Bay, put skyscrapers on the Golf Courses around lake Merced (and fill in the lake with rubble from the San Bruno Mountain), and make sure every nook and cranny between Sausalito and Petaluma is covered with suburban sprawl. The Bay Area needs to think big and start accommodating the many people who want to live there.
1
The healthiest and fairest solution is not to pull the rug out from under existing homeowners in the state in order to cram thousands more in with grand urban development schemes; the answer is to build centers of industry in neglected areas of the country. The California environment needs that, and our politically and economically divided country needs that.
28
Back in the 50’s and 60’s, the U.K. built new cities outside of London because there was no room and housing costs high etc.
One solution is to build new towns/cities in relatively undeveloped areas in California and incentivize companies to relocate there. There is a lot of room between SanJose and Santa Barbara. The experiment has worked well in the crowded U.K. It makes no sense just keep building up the same metropolitan areas.
9
There is no additional water to be found between Santa Barbara and San Jose as every drop is already spoken for, allocated, and used. Unless you get rid of agricultural land and reallocate that water to housing.
5
@MV In 1965, a developer proposed building a suburb for 30000 residents in the Marin Headlands called Marincello. It would've probably become the most desirable town in the Bay Area had it been built due to the incredible views and the short commute to San Francisco. NIMBYs forced its cancellation in 1970 and the area was cordoned off permanently as a national park. 2 years later, the town of Bolinas stopped installing new water meters. This idea of planned cities is not going to work with these sort of attitudes.
1
@MV suburbanization, you just thought of suburbanization. The problem is the people of Marin County really don't want more people. Bolinas stopped hooking up new water meters in 1972!
The Bay Area isn't remotely full, not by a long shot. It only feels packed because the so-called "progressives," the spiritual equivalent of people who shout "build that wall" at a red-hat rally, want so dearly to keep out people not like them that they've ginned up both the tax and zoning codes to their exclusive benefit. What needs to happen is: the entire Bay Area should incorporate under a single authority, and California should pass a constitutional amendment to develop by-right. Then, economies of scale could push down the insane costs to build housing and public transportation infrastructure. The thing gained will be: affordable market rate housing for everyone. The only thing lost will be: millionaire ex-hippies dreams that they can preserve in in formaldehyde the city as it looked the last time they were happy.
8
I support historic preservation so I have issues with beautiful old homes that give a place aesthetics and character torn down by greedy real estate developers. Especially when they turn around and build expensive luxury apartments in their place that do nothing to help with the housing crisis. That being said - I don't get opposing redeveloping a defunct mall. That's exactly the type of project preservationists, homeowners and housing advocates should be able to get behind.
6
Higher density housing in existing urban areas is the way to go. End CEQA abuse (California Environmental Quality Act, a law that sounds good but is abused by NIMBY opponents to nix construction that creates a shadow on existing single family homes).
Simplify zoning, allow for higher density use of existing lands. Existing home/landowners benefit (if a developer can build 1 $700k home on a 1-acre lot or 8 $250K condo on the same lot, they will pay more for existing 1-acre lots while also delivering a $2M development instead of $700K development) and future residents benefit too.
The collapse of retail space will create a lot of opportunities to build high density homes in existing urban areas, if politicians are willing to take flak and support the project.
1
It's not the job of Tech companies to build houses. What's next? Tech companies building hospitals and schools?
Let them pay a fair amount of taxes, money that could be used by the State and cities to plan accordingly and build affordable houses to satisfy the community needs. A society where private companies take over the role of elected leaders is not a democratic society. As week intentioned as these companies are, this is not their job.
Second, voters have to begin electing officials with visions instead of the more famous or we'll connected ones. Politicians in both parties have failed to respond to the need of the people. The only thing they care about is money for their reelection and a cushy job for them and their friends when they return to private life.
11
What I see us too many companies over concentrating in just a select few places that in turn drive up/concentrate populations in unsustainable ways.
Particularly in California where water availability is scarce. It also drives housing development into natural areas prone to wildfires which only add to the crises when folks lose their homes.
Now layer Climate Warming on top of that and you have a recipe for disaster. All due to a short-term profit and planning narrscistic mindset.
9
Every single effort to reduce the cost of housing via subsidies ends up *increasing* the overall cost of housing by pouring more money into buyers hands (demand) without changing the supply curve. All the money does is raise overall prices and change who wins and who loses.
The tech companies could do far better by geographically diversifying - i.e. reducing the demand in the comparatively small Bay Area and increasing demand in the rest of the country.
Apple is the strangest of all of the tech companies. They are the most concentrated with just about all R&D employees in one town and yet these employees are strictly forbidden to discuss their projects outside of well-defined team boundaries. What is the point of having everyone in one place if they can't share ideas? This policy is left over from Steve Jobs who insisted that he be able to oversee every employee at any time.
10
California is a victim of its own success. It's like a beach town that used to be cool but now is just crowded and expensive. The beach is still there but it's expensive, hard to get to, and the water is polluted. The old timers grouse about the good old days, and the newcomers are split between "it's great to be here" and "is this all there is?"
The world is filling up, and people are swarming to places that are cool, like the proverbial beach town mentioned above.
The cost of housing is the proximate cause, but overpopulation is the underlying problem.
29
That is correct
Corporations cannot be trusted with public works. If they retain ownership, what guarantees are there they won't change their mind about keeping the housing affordable? That happens even with non-profit organizations that do housing. Wouldn't it make more sense to house all the employees in such a building, in one location, and get them out of the housing market at large?
1
I wonder if it would be cheaper just to pay people to move out of state.
10
If so many people are leaving California why is housing so expensive? If people can't afford those prices who is buying these expensive houses? Why can't the less expensive areas of our country attract these tech companies? Just asking for a friend.
4
Oh for Goodness sake, let’s start at the beginning. Corporations must stop avoiding taxes by offshoring their revenue (eg to Ireland) and having the middle class subsidize their profits (don’t even start with competitiveness and shareholder value nonsense - if a company cannot survive without having waitresses subsidizing their taxes for them, those companies should fold and make room for companies who pay their fair share).
The utter nonsense of tech companies riding to the rescue of affordable housing (aside from not addressing the real issues involved as the article discusses), is a blatant joke.
Apple, Google, Facebook and all the rest can start by not avoiding their taxes. Their extract funds from our collective coffers for their own profit - and then they can decide how those funds are allocated.
CA government is disfunctional - but it is ours and we do have recourse (at least on paper). Apple taking the extra profits it garners from avoiding its share of taxes (ie making us subsidize its profits to itself and its shareholders) make Apple’s building “affordable” housing a farce.
12
Apple plans to steal money from poor people as the banks did which caused the crash in 2008. Pure and simple. And they stash it off shore. Gee doesn't Apple make enough money as it is? Now they branch out to predatory lending? I guess they hope for the icing on the cake, a huge bail out reward as our dear friends the bankers got when they were rewarded for crashing the market. Oh that they could have gone to jail where they would have gotten the reward they deserve. Don't you just love the two tiered justice system. Only us, not rich people have to follow the law.
12
This article hits the nail on the head: The 60s California lifestyle of cars and traffic and endless sprawling suburbs just isn't attractive to many folks now (not to mention that it's an environmental disaster). Crazy rents for walkable, urban homes are the utterly predictable result.
Until we push the old timers aside and start building the housing that people demand, nothing will change. Even big tech's billions are, to be polite, urinating in the ocean. The money would be better spent on lobbying for change in Sacramento.
3
Why not just use the empty box-cars that are being moth-balled all over this nation?
They no longer carry goods, so put them to good use.
1
My years in the Bay Area indicated that rich NIMBY neighborhood groups (pretending to be progressives) were a huge part of the problem.
28
U.S. government decision-making is both Balkanized and corrupted by big-money lobbying. Government in every state, not only in California, is a set of Russian nesting dolls, with city governments inside of county governments inside state governments. Because large metropolitan areas, think New York or San Francisco, are puzzles of competing governmental units, sane decision-making, regarding issues such as development or street maintenance across broad swaths encompassing rich spots in one locality and less well off spots elsewhere, is nearly impossible. So progressives in California decided to bump up such concerns to the state level. Unfortunately, this is where developer lobbying comes into play. Developers would love to buy "cheap" single family houses, replacing them with high-rise rentals having ever increasing rent. Not to "help" anyone, but to enrich themselves. Sadly, progressives have not figured out that they have been taken for a ride by state lobbyists. At least the tech companies are not aligned with developers in that tech companies would prefer not to have to constantly increase employee pay just so it can be turned into ever increasing rent dollars paid to developers.
4
The SF - SJC Metro, like many cities in the US, is reaping the problems of not in my backyard-ism. Massive homeowner and neighborhood resistance to densification and a widespread belief that transportation means one person - one car created this mess.
The only way to housing affordability re-zoning and therefore large increases in housing supply. But with a house being most peoples' largest investment, homeowners don't want housing affordability -- since that means they would lose money on their own investment.
A simple graphic of housing units and jobs over time will clearly illustrate this. Jobs are growing in metros; housing units are not.
5
It's easy to criticize what the tech companies are doing, but their proposals are largely modeled after industry best practice for subsidizing housing development. Perhaps some credit is due there.
It's also easy to dismiss the housing crisis as having resulted from decades of political decisions; economics is also clearly a factor. A high concentration of tech workers creates a market for luxury housing and more expensive goods at the expense of lower-cost alternatives.
Why not proffer some ideas and put all of this in context of what's possible, rather than taking such a pessimistic angle?
2
I am now glad that I sold my Apple stock recently, despite its run up since. Corporations should not be in the practice of giving away investor money to build subsidized housing for anyone. They are in business to make money and to return profits to their investors, not to act as another quasi-government welfare agency for people who cannot pay their own way.
3
@paul
To me, NO company on earth has its eye on shareholder value more than Apple. (Whether or not they strike a good balance between those obligations and things like morality and being a good employer, good corporate citizen, etc. ... I suspect we might not agree on all that.)
Those high up @AAPL know they need to take a long view - who will be their customers in a few years and what will they want? Ditto, who will be their most productive employees, and will those employees have to worry about things like an adequate supply of nannies?
There are 101 NON-CHARITABLE (i.e., just being attentive to their very own bottom line 2-10 years out) reasons why Apple might throw some money at this problem. I'm sure you've heard - sounds like your instincts would make you scornful of it - "doing well by doing good." THAT is what's happening here. If it gets them some goodwill from people younger than I'll guess you are - people who feel a little guilty railing about the 1% when they've earmarked many thousands of dollars to Apple by virtue of buying and operating some "cool things" - that's just gravy.
Apple most certainly is NOT doing this because they're bleeding heart liberals.
And I think the author overlooks a corollary to this. Apple spends almost every penny wisely. They may even "move the needle."
2
Why does the starting point of the discussion assume that everyone who wants to should be able to live in the most expensive city.. ..state in the USA ?
When something is expensive it is a signal that it is scarce and it is time to economize and substitute .
There are thousands of affordable communities all over the USA.
You might protest, but what about job opportunities ?
When mid-level productive workers are priced out of an area then by definition their mid-level productive employer is also priced out and needs to find a new home in a second tier city .
Just because you and your employer are producing a low tech product or service in a city when it was not so valuable are you entitled to be there forever .
11
Why does any company stay in CA anymore? They provide hundreds of thousands high paying jobs and bring billions of dollars to the state and despite that, it’s still their fault for brining too many jobs that pay too much money that causes house prices to go up. Swimming in their liberal guilt, they attempt to repent by investing billions of more dollars into the region and it’s still not good enough.
The obvious solution the state wants is for them to leave, to take all their money and people so that the entire region can fall back to poverty together. But at least they will all be equally impoverished, which is inevitable result of all this.
5
The vast majority of homeless people are medical/mental cases and often elect to be homeless or at least accept it as their lot in life. Typical of all out political solutions is the distortion of the real problem to one that has a solution. More housing will not solve the homeless problem. it will help with those who are actively working or looking for work but it will have no effect on the medical/mental/behavioral problems.
12
Tech companies are hypocrites. Just look at Apple’s corporate campus — low slung, set in an open space oasis, with no housing, far from transit, only accessible by car. Why couldn’t Apple build its office on half the land and housing on the other half to house 10,000 people?
46
@RSSF And it doesn't have a day center!
3
really all they need to do is build super high rise residential building like NYC does, One for every city and Voila !! end of housing crises. save money by building only one design everywhere, 1000 ,1000 ft tal spires and you'll be all caught up with affordable housing, i swear its true.
Or you could get rid of cities, and have only County-Cities statewide, save a lot of money unlapping goverment services, and ending small idiotic control
1
There’s more to it than just building a high rise. What does this high rise do to the traffic around it. Public transportation, parking, road access, stores, supply routes, etc etc.
1
These new gilded age robber baron malefactors of great wealth need to be busted up, fined and regulated down and locked up.
8
No one writes about quality of life. A comparison is the DC area during the Reagan years; residents were choked by the expansion. Who wants that?
Why don't companies move to lower cost areas. We aren't like cities, like Pittsburgh in the last century, where raw materials and rivers forced companies, like steel producers, to be there. All tech needs are office buildings and they are everywhere around the country or easily constructed. I am proud that the laws in California are contributing to quality of life for residence. The homelessness and high costs are due to the companies that don't really have to be in California cites. Let the tech companies and all that infrastructure find a more affordable place to locate.
8
@Jack You hit on a lot of things that I have wondered for awhile. What is the QoL of a software engineer in the Bay Area vs a mid-size city elsewhere in the country? You can either live in a big house and have a 15 minute commute or you can pay almost all of your income to live in a small apartment with a brutal commute. I've always found it ironic that all of these companies that have made remote work possible have most of their employees work in the most expensive part of the world. It also begs to question, when things hit the fan, how much easier will it be for companies to leave for greener pastures? Moving a steel-mill or an auto-factory to a new place is cost prohibitive while moving people and computers to a new place is relatively simple and inexpensive.
13
Comprehensive, integrated commuter rail connecting California's major urban centers with its outer suburbs -- preferably underground and with enough rails to offer express and local service -- would do much to alleviate the housing costs. Dramatically reduce the friction and cost associated with commuting within the urban-to-suburban zone, and housing costs will adjust downward across the entire area.
The initial costs will be sunk costs (one-time), and it would be nice to see the tech companies foot the bill, since they have already benefited by exploiting the current infrastructure to build their businesses.
2
Regarding your title:
They (or their overly-entitled employees, many of whom became landlords or home owners who vote for their pocketbooks and against measures that would ease the crunch) had lots to do with creating the affordable housing problems in CA. In part this is because for years they failed to intervene, despite locals begging them to do so.
Your title improperly exonerates them.
4
Build high density apartments near the actual Caltrain stops. Think Brooklyn or Paris. Currently commuters who opt for Caltrain have to exit train and then take shuttle to office 5 miles away adding another 20 minutes to an already long slow train commute. Get rid of NIMBY. The wealthy and elite in San Francisco cannot hold the land hostage just because they don’t want a barista living next door and so they can have a grand front lawn that serves no purpose other than it’s pretty. Also visit Tokyo. It is amazing how the rest of the world has figured out high speed trains. Caltrain is a rotted falling apart painfully slow system that serves the highest tech community in the world. Instead of paying millions for affordable housing maybe Apple and google should donate money to building a real public transportation system for the region. Times have changed and everyone living in their own single family ranch style home with a garage for two cars are long gone. All the problems California is facing are tied together. Infrastructure, reliance on cars, no public transportation, wild fires , horrible commutes. The list goes on forever.
11
We need action on the federal level. The federal government should be subsidizing the construction of affordable housing units where: a) median rent is higher than 40% of median income, b) a city/township/county revises its zoning to allow higher densities. Only by increasing the supply of affordable units, will the problem be addressed. Only the federal government has the wherewithal to make it happen.
Why would any American over the age of 30 who is not a millionaire want to move to or stay in any coastal California city?
17
For many reasons: weather, ocean, environmental rules, minimum wages laws, universities, access to smart people, great healthcare, equal treatment and laws for all no matter your sexual orientation, separation of church and state, gun control, outside physical activities all year round, culture, and the reason I moved caring people who didn’t have to be related to you.
1
@Rebecca if all of those things are true why is a much better QoL more attainable in other places?
@Jake fo a higher paying job or starting a business
The only to solve many problems is for people to have zero, one or two kids.
15
@Keith Dow Do you want to be on the committee to decide which people get to have children?
1
Apple, Facebook and Google should be forced to move their corporate operations to one of the 10 poorest states.
6
Or maybe tech companies could invest in — quel horreur! — flyover country where housing is inexpensive.
14
@EGD They are starting to do so more and more. As they become more mature corporations there will be accelerating pressure to reduce costs and moving jobs to locations where they can be performed for a fraction of the price is one of the corporate world's favorite plays to run.
1
@EGD You are already doing that. To the point that the flyover country I live in is a mini nightmare version of California.
1
@Kohl not true here. Maybe for the corporation low cost operations when compared to California... but the newly minted employees still make salaries far beyond the local average and if they just sold a tiny dump in California they have enough to snap up every house here and cause another area’s housing crisis. It’s all relative.
1
I am curious: why is the per unit cost of housing so high? the article doesn’t really spell that out - is it the land cost? materials cost? higher labor cost? presumably this is before the market value of the unit itself is decided? or is this related to the eventual market rate? (it needs to be this high due to other home values?)
4
Greed. That's what.
@Jane
Perhaps the three rules of real estate explain the high per-unit cost of housing: Location. Location. Location.
1
I’ve heard labor costs are high due to contractors being in high demand to rebuild wildfire burned areas. Costs spiked a few years ago.
But in general, yes, all costs above are high.
Developers and investment groups buying properties, jacking the rent, and then driving out their tenants hasn't helped either.
4
" At the moment it costs about $450,000, and considerably more in high-cost areas like the Bay Area and Los Angeles, to build a single unit of subsidized affordable housing in California, according to the Terner Center."-------Why is this so high? I'm guessing a lot goes into various pockets, but I'd love to know more if any readers have insight.
6
One little insight: we recently took a bid for a new heater for our home. The cost of the unit is $2500. The cost of permits and inspection fees by San Luis Obispo county is $3500. This is a red county btw.
2
Building a so called “affordable” unit of housing in an area already blighted with every other exorbitant cost of living is like throwing a helpless mouse into a tank of piranhas. Sure it will swim for about one second before being devoured by everything else. If Big Tech does have a soul this paltry gesture will hardly come close to redeeming it.
9
Greed is the root of the housing shortage. Big Tech can help by opening new offices outside of already overcrowded, unsustainable, and climates destroying California.
There are millions of smart people across the country.
11
The problem is zoning and how the lucky few that own property refuse at the city level any up zoning. I'm not sure it's much more complicated than that. Same story is playing out in Seattle.
5
Great artucle but you don't go into why homeowners and municipal goverments want to stop new development. While traffic and other issues all contribute, an often overlooked factor is existing homeowners depend almost exclusively on home equity to fund retirement and college for their children. So it is in their interest to keep housing prices high and rising.
7
Apartment buildings are being built left and right in Berkeley, but rents aren’t going down significantly at all. A one bedroom apartment still costs around $2500 to 3000 a month, which is not something regular people can pay. I feel there’s definitely a caste system of tech workers and the rest of us. Maybe if all of us got paid the way tech workers do, some of the homelessness would go away?
7
Every major tech company is
Migrating jobs/functions out of the state. The problem will solve itself.
3
It is time for business to vacate the State of California just as many residents have. The cost of living for employees combined with the traffic, the lack of police protection, drugs, homeless, and high taxation make it a poor choice to live and develop a business. There is little accountability among California politicians. Therefore, things will get worse.
11
Of course sea level rise due to global heating is going to inundate much of Florida, so moving there is not a solution. But moving from California to middle country red states will put businesses in competition with corn and soybean corporations for land use and turn them from ruby red to blue due to well paying high education type jobs, so I support that idea.
4
Big Technology needs to relocate more of it’s offices and workspaces out of a California and into areas like the iron belt that desperately need employers. It doesn’t make sense to further crowd both our coasts and ignore the middle of the country. If there are employment opportunities, people will move there. Piling more people into California does not make sense economically or environmentally.
29
I know I got one would never move to TX and leave this liberal area.
@Maureen not where the brain synergy and cross pollination is. And non-compete clauses in employment contracts not enforced. It ain’t just proximity to Stanford and the sunshine.
Why do tech workers need to live where they work? I work for a large tech company that’s based in Palo Alto, but I live in Portland, Oregon. I relocated to Oregon seven years ago, after living and working in the Bay Area for my entire life, and I haven’t been back since. Most of the software developers that I work with (I’m a technical writer) live and work in China or India. If you work in tech, it’s totally unnecessary to work onsite.
16
Apparently the homeless encampments downtown and along the 84 has been resolved. But moving from California to Portland has caused the price of housing there to skyrocket. We decided to go back to California after watching Portland deteriorate and become choked with traffic. 26 and 217 are hopelessly snarled. Washington County planned for a 50 percent increase in population by 2030 and it is building out but without enough supportive infrastructure. That said I am already thinking of going back to Oregon. Or the Pilbara. California has become insane.
4
I really wish I could live in California, it's one of my dreams. But if a tech guy with a huge salary can't seem to find a place out there, I don't stand much of a chance.
I do like the steps companies are taking to solve the issue, but it really is high-powered residents of the area suing their local governments to protect their assets and adopted homes from additional supply that could tank their equity. There is no other solution than to build more. You can't simultaneously complain about both homelessness and building housing. Then you're just saying you don't want anyone to live near you, on some protective hipster cliquishness when I highly doubt they lived in California for more than 10 years.
8
We must rethink all these outdated ideas we have about housing—ASAP. There are too many perverse incentives built into the way we do this now.
America’s great cities are generating jobs but you can’t live there. In my city I see only really expensive homes being built—for who? Young people can’t buy them, old people can’t either.
Homes are for living. Not investment. Builders need to make money but it’s gotten way out of hand.
19
In our area all that are built are mansions which sell quickly and are left vacant 90 percent of the time because they are second or third homes for the tech babies. Oh, and dentists (one house just sold to a Bay Area dentist for $1.2 MM and he and his wife use it one weekend out of six. No wonder they want to pull your teeth and put in implants). The older, more modest middle class homes are held as short term vacation rental stock. It’s not like we don’t have an oversupply of hotel rooms but when the daily food budget is $150 per person for a hotel stay and with unhealthy mediocre food I understand why you’d rather cook it yourself. But still..
9
I'm aware of rich Bay Area residents who have moved to Nashville. And yes, they bought a huge newly built house. They were attracted by your tax policies and sensing much less age discrimination than in CA's big metro areas.
4
@Subscriber
no tax = no services. outsiders are often shocked by this when they move here. but if you're rich, I guess you can just hire servants.
Tech companies should know, better than others, that their employees don't need to be colocated to be productive. These companies could be hiring people who live and then remain anywhere in the country. They don't even need an HQ2, since employees can work out of their homes and connect virtually using all manner of tech. Working from home also eliminates commuting which saves energy, time, and frees up road space for those who truly need to commute.
6
It's also good for the environment given you avoid gas guzzling commutes.
2
You omitted a critical point about the Vallco controversy. The developers also want to create room for 10,000 workers on that property, dwarfing the amount of housing proposed. These need to be in balance before future developments are approved!
7
I went to Cupertino High School and graduated in 1982. Vallco was our lunchtime hangout senior year.
As some readers have mentioned, the missing link in this story is Proposition 13, which essentially froze property taxes in time for many longtime residents.
The greater impact of Proposition 13, however, was on the California public school systems. Originally conceived to provide equitable funding to all public schools regardless of tax base, it had the opposite effect, leaving many school districts vastly underfunded, a situation that continues to this day.
From a recent KQED article “The California Budget & Policy Center ranked California 41st in the nation in per pupil spending, when taking into account cost of living in each state. During the 2015-2016 school year, California schools spent $10,291 per student, about $1,900 lower than the national average, according to the center.”
22
@native Californian
VERY salient point. Prop 13, which also allows businesses and high-end country clubs to freeze their property taxes in time (as in they never go up, despite property values skyrocketing) is a major scourge with multiple, overlapping and interacting impacts. It may also be one reason tech companies, with their sprawling campuses, base themselves in CA. It is certainly one reason older adult Californians aren't moving and switching out of their empty-nest properties for more modest homes, and thus opening up options for growing families who now live in the over-priced houses once called "starter homes" or can't afford to leave their pre-children one or two bedroom apartments.
4
My kids feel the impact daily. For example, in a school of about 600 kids under age 12, there is only 2 hours per week (you read that right) of a school nurse. The nurse works from a backpack checking and doing paperwork, not serving children. The district, which serves a major city where property values have absolutely skyrocketed in the past several years, has only 25 nurses to serve many thousands of children. One result: if a child needs medication during the school day, a parent must drive to the school to personally administer the medication. Particularly in an area where housing costs demand that for most families both parents work full time, that's nearly impossible for all but the rich to do while still keeping a job or maintaining their much needed income level steady.
Oh, and the state penalizes schools when kids are out sick by cutting funding.
4
@Subscriber Freeze? Incorrect. Prop 13 dictates a 2% rise in property tax annually. There isn’t a limit on “fees” and those fees are rising constantly.
The only way this housing improves anything is if it is built adjacent to the jobs or to transit such that no one else gets on our freeways. It’s not just housing. Anyone who lives here will tell you that our freeways and even our surface roads are far beyond their intended capacities. Parking anywhere is a nightmare. I would love to ride my bike and there are bike lanes on many streets. But I’ve done it. Unless you have a death wish, it’s just not something any sane person would do. I live five miles from Vallco. The idea that 2400 homes are going to be built there sounds great on paper. I know that section of Highway 280 very intimately. Based on current traffic conditions, the gridlock will extend to nearly all daylight hours. Welcome to Silicon Valley. Have a nice day.
34
Closely linked to the housing crisis is a transportation crisis. The traffic in the area is terrible and must be addressed alongside any effort to increase housing. In addition to money for housing, we also need money for better public transit systems.
41
@Karl exactly! Why the transportation crisis is never taken into consideration before the development process is beyond me. Cities or counties or states should charge a transportation tax to corporations as part of their commitment to the area they decide to be in. Austin is now one of the worst in the country and gridlock is a new way of life here. No real public transportation no rail system old roads and neighborhoods literally locked in place by traffic. But always friendly to businesses coming here. Ugh.
3
@Karl The tech companies agree with you. They just want us to pay for it. They backed an initiative raising taxes throughout the Bay Area to pay for road improvements. Roads which they have overwhelmed.
1
I agree with many of the people expressing opinions here that two of the major drivers behind finding affordable housing are the long-term effects of Proposition 13 and the terrible lack of vision around planning effective public transportation to relieve the ever-increasing commute times. I used to live in Southern California decades ago and was happy to leave because I could see where the state was headed. The long commutes, the constant droughts and wildfires, the poor air quality, the materialism and obsession with the so-called good life. Well, Paradise literally burned up recently, and is neighbors are following suit. Government and business need to work together like they did in WWII and come up with solutions that benefit the majority, not the few.
19
Housing is not an issue in itself - INFRASTRUCTURE must go together. If these companies really want to solve the matter - move to greenfield development AWAY from urban centers.
8
So, the tech industry is “starting to take a more active role in addressing the chronic regional housing shortage that makes their expansion difficult — not just for their employees, but for the public at large.”
Two thoughts on that. First, a corporation acting altruistically to the tune of billions of dollars would be unprecedented- and completely contrary to corporate behavior generally. These companies mostly hire lower paid employees and contract workers* who can no longer afford the Bay Area, so the altruism of their actions is dubious.
Second, if tech was taxed appropriately, the municipalities would have more revenue with which to deal with the housing crisis democratically and in a coordinated manner.
* The highly paid employees with access to massages, catered meals and ping pong represent a small portion of their workforce.
16
There are a lot of unused office buildings in the Bay Area. Just drive along the freeways and you’ll see large, unleased office space that has been unused and ignored for years.
The community should think outside the box and re-zone this space for what is really needed - more housing.
11
If Tech is a new Gold Rush for California, the housing crisis is the equivalent of the polluted waterways the gold miners left behind.
Most people who live in the Bay Area already feel like there are too many people here already. Our state doesn't build new freeways or new public transit when new houses are built, and the roads are already jammed.
But mostly, we lack visionary leaders who are able to herd the cats -- the elected and appointed government officials and numerous independent, unaccountable state boards to accomplish anything on a statewide level. Tech companies and their money are not a substitute for leadership, and they are genuinely resented by the majority of the populace who doesn't benefit directly from their 21st century gold-rush.
205
@Paul There is open land nearby, build a Tent city for immediate housing as many other countries do. Help tent-housed people to get job training, language training and earn their way out (Childcare as a job for those that can't work, simple clothing made onsite, food prep by onsite people, etc. needs to be thought thru but COULD work... it's working around the Globe!! Aim to make it vacant someday.
10
@Paul How can increasing values of homes be compared to polluting rivers and the land with poisonous heavy metals?
At least you are right that your central planners are failing CA because ALL central planning fails. Do you really want Soviet style housing to solve your crisis?
8
@Ken Bunzel
If you think that tent housing is the answer you have never been to the Bay Area. There is tent housing everywhere!
8
It doesn’t matter how much housing it built, it is still unaffordable in cities like LA and San Francisco. And it ignores the worst problem particularly in Los Angeles that public transport might as well not exist. The reliance on freeways for the workers commutes is a disaster. Los Angeles is split in two like Cold War Berlin. Culver City is check point Charlie and if you live in the East and have friends in the West good luck getting them to visit your side of town and vice versa.
Building in my neighborhood is flourishing but now there are lines to get onto the freeway where once there were none or they were marginal. To get from Silverlake to CulverCity in the rush hour takes a good hour and longer on the way back. It will get even worse as Google is moving there, Apple is moving there and Amazon is there. It takes a solid half hour at rush hour to get to the freeway headed east from Sony a distance of one mile.
The train stops a good ten minute walk from the closest one these companies and you have to get to the middle of downtown to get on it. It is above ground and stops for traffic sometimes so a solid 45 minutes to get to Santa Monica, once you are on it
One could go on and on.
178
@Sarah Caplan there are simply too many people there. los angeles county was a very nice place to live between about 1920 and about 1970..it is a terrible place to live today, even if you're extremely wealthy, quite frankly. homes near vermont and manchester cost 500k, the armpit of the county..move to dallas or atlanta like everyone else..
16
@Andrew Edge it’s actually not that terrible. Traffic is bad all over the country, including in Atlanta.
13
@Sarah Caplan - a ten-minute walk to a train then a 45-minute ride? That is luxurious to those of us train-riders going from CT to NYC. And the monthly pass, not including the subway, is $391. I always hear about CA's stunning weather - walking more should be seen as a privilege. We walk through all weather, including the difficult Nor'Easters.
65
Jez, why do they want ‘more growth’? One eighth of the country’s population already lives in California and obviously it’s not sustainable. I believe it was a famous urban planner who said ‘growth for growth’s sake is the ideology of the cancer cell.” If the billionaires really wanted to help us rather than themselves, they’d build housing and create jobs elsewhere in the country.
330
@Maggie Well said! There are communities all over the country that want and need these jobs.
52
@Maggie
Review the hq2 process. The biggest factor is attracting talent. Are they going to find it (or will it move to them) in Dayton or Macon or Rochester?
21
@Maggie that's exactly what they're doing. Apple is building more campuses in Austin, Amazon is building in Virginia and so on.
17
Solutions to all these problems are readily available though: don't concentrate, disperse. For the Bay Area, why try to cram another 10k units in San Jose or Cupertino, when the Google's and Apple's of the world can revitalize Stockton, Modesto, Merced, Fresno, and Bakersfield. In this day and age of telecommunication options, there is absolutely no need to be on top of each other and artificially destroy purchasing power with out-of-reach housing costs.
360
Yes, absolutely the perfect solution. We’re also building High Speed Rail right now through many of those cities in the Central Valley. I’ve lived in the same place for 60 plus years and have seen it all. We’re completely built up, full, no more land. But just outside the Bay Area, there is plenty of land and cities that need jobs. None of this is going to work without High Speed Rail connecting us all together. The arguments against the train system are the same one’s used against Bart, more than 60 years ago and lack merit. Building just outside of the Bay Area is the right solution if we get the balance right.
137
@Innovator
To the contrary, we should make dense housing in concentrated areas. The enormous suburban sprawl is part of the reason we can't manage all the infrastructure and contain wildfires across the state.
115
@Innovator yeah, let’s have a endless suburb across the country with car packed highways. That has worked so well in the past.
64
What has changed in my lifetime is that everyone thinks they must have their own place. When I was a child it was common for three generations to live together in a large old home. The parents found a baby sitter in the Grandmother who lived in a bedroom there at home. The twenty something saved money for marriage and a home of their own by living in the basement, etc. Now the 20 year old has an apartment that takes 40% of her/his income and the Grandparent lives in a condo in Florida and the middle age couple has an empty nest. Now one family expects to live in three separate homes and none are really better off for it.
12
@Mr. Jones
Yo, there's no way I'm sharing a home with my mother in law.
9
Keep turning off the power for weeks at a time while the Wall Street owned utilities companies’ power lines start devastating fires causing millions to flee because of their refusal to even minimally maintain the lines, much less improve them, and the population / housing problem in California will resolve itself.
5
If you want to know why we're never going to solve either the housing crisis or global warming, go to a community meeting in Berkeley and listen to the public comments from former hippies confronting the prospect of a six-unit apartment building next door or a bike lane on their street. Don't get me wrong, they're huge environmentalists, and they've got a "refugees are welcome here" sign in their yard! It's just that it's inappropriate to add anything right here, where they *need* to park their SUVs.
127
Why didn’t the reporter address the politics of zoning and the themes contained in lawsuits by home owners as contributing factors to the housing crisis?
4
The real question seems to be why did these people choose to be poor? /s
3
@Mons, which people choose to be poor?
1
Does population growth factor into this? Hasn’t the World/US population doubled in past 50 years?
11
@Barb yes! It has. And we tend to cluster together and create these overstretched areas to live in and leave giant vast areas that could be evened out. Don’t understand why new cities aren’t created.
1
Wiener is correct - the geometry of single family homes reached by single occupant cars does not work anymore in coastal CA.
Apple’s HQ should be demolished and replaced with a 20 story HQ and 4000 units of housing. That campus, while beautiful, is embarrassing given the problem described here.
4
I see space for a monolith of a building at apple hq. in the center of the buildings “playground/courtyard.
1
How many of these office jobs actually require a physical presence in a office building? Besides the actual packing and shipping of goods, which are already not in densely populated areas why do people need to sit in a cubical?
Before any office building is permitted the need for it should be justified. I suspect most are just corporate symbols like that stupid round one in the photograph. Telecommuting should be the rule, not the exception.
6
If only every tax payer in the US could decide where their tax money would be spent. We'd have a whole lot of money going to gun safety measures, and almost nothing going to quagmire wars halfway around the planet.
But only powerful corporations like Apple get to choose. And their $2.5 billion is peanuts compared to the taxes they should be paying for all the benefits and advantages the US has given them. It's a well publicized gesture to try to head off a hike in their corporate taxes.
How much of Apple's $2.5 billion tax deductible donation will be carefully directed to mostly benefit--surprise--Apple employees? How much groveling will government officials do to get some of that money, and how many more politicians will Apple etc have in their pockets as a result?
9
This is not just a Silicon Valley problem. Southern California, with not much of a tech footprint, has a high homeless rate. Seattle, with Amazon, has a growing homeless problem. NYC has a big homeless problem. Might it be worthwhile to look at the growing income inequality that is escalating across the country?
36
There is only one politician I know of who has been proposing policies for years to address the national housing crisis.
https://berniesanders.com/issues/housing-all/
4
Apple’s $2.5B pledge is nothing more than a PR stunt. The issue isn’t as simple as land for new housing or higher density housing. The issue is an imbalance between the amount of “industry”, available space, and necessary resources (water, sewage, electricity, roads, schools, public transportation, ...) to accommodate an greater number of residents. Simply filling open space with apartment complexes only exacerbates the real issues of urban growth. Perhaps planners in cities like Cupertino, Santa Clara and Mountain View should not have approved so much office space in the first place. Their decisions were driven by greed (high tax revenue, low impact on the city’s resources) and a selfish willingness to push the expensive business of housing people of on San Jose. BTW - this is exactly what Apple is trying now with their $2.5B offer: an offer to convert property zoned for office or light industrial to housing. Isn’t it San Jose’s job to set the zoning rules for its city? If I were SJ, I’d tell Apple to go scratch. You want a solution to the problem? Quit approving new office buildings in the region.
10
It is mathematically impossible to solve the California housing problem. Period. Why?
Because if we built enough housing to being the supply up to meet demand and therefore lower the price then most mortgages in the state would become under water.
The bundles of mortgages only work as an investment for various actors in that the raising value of the homes pays for the deadbeat loans in the bundle. The people holding the bundles of the loans will not sit by and watch their investments do way down in value and their “insurance” of increasing value go away.
The common wisdom that it is NIMBY that is killing housing in California is only half the story. The other half has not yet had to rear it’s ugly head as the NIMBY has done it for them. But make no mistake, if the Scott Walker’s of this state get their way and start to do something that increases supply enough to drop costs...the investment folks will then stop the whole thing to protect their investments.
18
@JD
NYC is much more built up than San Francisco and I don’t see how it hurt investors or homeowners. I’d rather see cities like San Francisco and San Jose grow than have urban sprawl, subject to wildfires and long commute times (adding to pollution, etc.).
1
We DONT need corporate philanthropy. We NEED corporate interests to stop buying off policymakers so GOVT can work and make appropriate investments like this. We've lost sight that governments are in gridlock b/c of the failure of both sides to compromise and find the middle. Neither Bernie's all-out socialism or Reagan/Trump fascism is going to work; that just leads to the gridlock we've seen these last 40 years. We need to reclaim the middle where all compromise, all benefit, to differing degrees with every decision.
6
The irony of the tech companies choosing to concentrate their employees in to physical beehives when what they all sell are the tools to communicate and work virtually and remotely.
Why can't google find answers to the problems of its own employees. Why can't Apple use those great cameras to hold employee meetings from rural areas. Perhaps Amazon should be developing its drones to move employees rather than packages.
The tech products we are buying must not be up to the task of solving real problems if the companies that produce these products insist on concentrating their workforce in to one or two corporate campuses.
26
@Billy Well said. It seems like the tech companies do not drink their own CoolAid. In this case... why should we?
4
Wasn't the new future to be working from home? Especially in the tech field? My son does it as an information systems architect here in Jacksonville. Well, some times he has to go in which aggrieves him no end. Of course, I would have loved to do that with teaching geography to 7th graders. They could do all that misbehaving at home.
33
Conor Dougherty: this is not a single-variate equation. The housing crunch is also driven by illegal immigration (California has the highest population in the nation, by some estimates nearly 7 million. 7 million.), and limp and inefficient planning by the state and municipalities. Take a drive to Sacramento or the Foothills--thousands of acres of virgin land has been cleared for new developments of single-family homes. Californians are frustrated by the boom-and-bust cycles--as soon as the economy crashes, your Times story will be "Why is there so much sprawl in California?" At some level, these processes have to be driven by long-term planning, and by law and order.
12
So the problem is that the government refuses to govern.
2
Has the Times rediscovered market economics? At least this piece by Dougherty recognizes that home prices are a function of demand and supply, and that both natural (land area in a given location has geographic limits) and artificial (zoning and NIMBYism to name two) factors constrain supply.
So how about using market strategies further? Want to change zoning in a single-family home neighborhood, or impede the views from existing low-rise apartments? How about paying the existing owners for their diminished value?
6
California has insufficient water resources for its current population. Climate change is making this worse, as the Sierra snowpack trends smaller and melts off earlier in the dry season.
Trying to fit more people into the state makes no sense. Build housing in parts of the country with sufficient water resources.
102
@Polaris
California will need desalinization plants on the ocean.
They’ll have to be nuclear powered.
1
The largest desalination plant in the world is in Jubail, Sauid Arabia. It produces less that 0.7% of California's annual water use. It uses 2.4 gigawatts of electric power, equivalent to around 5% of historic peak demand for electricity in California statewide. It cost $2.4 billion to construct.
So 20 of those plants would require the equivalent of a doubling of California peak power demand. To produce the equivalent of 14% of its annual water use. I think that extrapolating the total construction cost from the Jubail example would be optimistic, but the nuts and bolts would require a minimum of $50 billion.
The largest desalination plant currently operating in CA is Carlsbad, in San Diego. It produces around 5% of the water produced by the desal plant in Jubail, KSA. It cost $1 billion, and construction took nearly four years. It requires around 40Mw of power.
5
@Polaris This is partly correct. California's development is unsustainable, and, even if it could build enough housing it would hit other roadblocks, one of which would be water.
Climate change (eg: Global Warming) will make California slightly wetter not drier. The nearby Pacific will evaporate more causing more frequent, extreme winter rain events, "atmospheric rivers". And, yes, the slightly larger Sierra snowpack will melt earlier. In the Bay Area this is benefits city folks whose water company, SFPUC, has legal rights to runoff earlier in the season, and ample storage to hold it, at the expense of farmers, whose river rights are later in the season.
Trying to fit more people into the state makes no sense. Build [TECH OFFICES and] housing in part of the country with sufficient water resources [and LOWER EMPLOYMENT RATES.]
4
A trip to Dubai in the UAE is instructive, perhaps prophetic. Ride the municipal buses from downtown. Beyond the grand towers one passes districts designated "Work Camps," housing towers where the city's notoriously badly paid guest construction workers live in bleak apartment towers, wash hanging out on line in the sun. More such towers under construction. In Dubai those on the lowest income strata are housed, there is not a homeless person to be seen, nor fair wages.
6
Any article that talks about California's housing costs and does not mention Prop 13 and zoning laws is, frankly, journalistic malpractice.
Proposition 13 (1978) put a straightjacket on California's ability to tax property. As a result, people sit on their property investments knowing that they will appreciate much, much faster than the taxes they will have to pay for it.
Then homeowners in communities across California voted for stringent zoning laws preventing anything but single family detached houses in many of the most in-demand housing markets in the state, further increasing the value and protection of their housing investments, and yanking up the ladder for newcomers.
Unless Prop 13 is repealed and low density residential zoning laws are slashed by the state, nothing will change, no matter how many corporate billions are invested.
283
@Nikko Nice attempt at distraction. Prop 13 was prescient. California is already near the very top as far as taxation, and if Prop 13 wasn’t a law the situation would be much worse. Try focusing on the black hole of state revenue... the obscene pensions paid to state/county/city & district employees. Unsustainable. Prop 13 retains roughly 65% support from the populace. Unfortunately, Sacramento legislature is an unmitigated disaster, not any source of solutions.
19
@Nikko
Repealing Prop 13 would be a bonanza for corporate ownership of residential properties. Ordinary people who own homes would find the taxes unaffordable,and would be forced out of their homes to become tenants.
Corporations would make out bigly. No thanks.
29
@Nikko
Prop 13 allowed people to keep their homes in the face of ever-higher taxation to fund ever-larger government.
Local governments like mine assess ‘fees’ now but keep the taxes at Prop 13 level.
If Prop 13 is repealed, there’ll be no check on Democrat spenders.
12
These companies are importing so much labor from abroad that any housing built in our area (San Jose) is occupied upon completion by people who weren't even in the country when the development broke ground. The net effect is that it does zip zilch nada to ease the housing crisis, it only clogs the streets and contributes to a jobs picture in which 63% of the people in the tech industry are now foreign born -- there is no housing going up for Americans and there are no jobs being created for Americans.
The tech companies for all intents and purposes are foreign companies, with most of their manufacturing and supply chains abroad, with their money held abroad any time there are taxes to pay and with their $200K+ starting jobs going to people from somewhere else.
Google pledged to ease housing? What a joke. Google is displacing half the downtown in San Jose to build a "campus" where the apartments will be available only to Google employees. They are building it there because Mountain View told them any apartments would have to be open to all by fair housing laws.
These corporations ceased to be any good to society a long time ago, they're just uber-capitalist behemoths now.
64
@ondelette Yes, and in fact, when it comes down to it, Trump is really their candidate. They'll never admit it, but a real Democratic Party is something they can never support.
3
The big tech companies need space to stack into apartments their armies of underpaid contractors hired on H1Bs and fraudulent EB1C "outstanding managers and executive" green cards.
4
Sorry, I didn't find in the article why municipalities and their citizens are actually opposed to add new housing. Please explain to an extra-terrestrial.
3
@Marc I don't recommend you do this, but, at some point you could venture out from Quebec and try taking a drive in Cupertino (near the former Vallco Mall and the Apple campus) between, say, 7 am and 7 pm. You'll spend most of your time sitting in one place in your car. The congestion is insane. Residents of Cupertino no doubt love that the value of their homes have quintupled, but the quality of life has also nose-dived. Adding thousands of high-density apartments with a guaranteed "low-income" element is a non-starter for people who are sitting on multi-million dollar real estate investments, and who need to drive in the area every day. I'm not defending that behavior--just explaining it...
23
Traffic, over-crowded and under-funded schools...qualify of life has plummeted because there are too many people, and many of them are people without a strong commitment to building community because they are just there for jobs and education and then will move back to country of origin.
FYI, I grew up in Sunnyvale and worked at Vallco in high school. Before it was Silicon Valley, the Bay Area was a great place to live and grow up. Now it’s a nightmare.
21
Spend it all but do nothing to stop the influx what good will it do. You have to build faster than the new population is arriving or you continue to lose ground. Taxpayers are leaving as fast as non-citizens and unemployable are arriving.
5
Allowing companies to move into cities while offering them deep tax exceptions is the problem. These companies make obscene profits yet rely on corporate socialism to build? Like they say to home buyers, if you can’t afford the taxes you can’t afford to live there. Stop with the corporate welfare!
9
Whenever I visit the South Bay, the target of tech company funds, so many issues are obvious. Doing anything is just impossible without a car. You need to drive, drive, drive for any task as the area is spread out so far and coated in parking lots. Other commenters claim that the area is packed to the brim and the jobs should go elsewhere. Palo Alto, sitting on more than 20 square miles, is only home to 66,000 residents. But really they want to have their cake and eat it too: good jobs for themselves, and no new neighbors.
46
@John
It's rational to want to preserve one's quality of life. Reading some of the comments here, apparently we're all supposed to live like rat's in a box.
3
@spyglass Travel to europe much? Quality of life is greatly improved by efficient and low cost public transportation, fewer cars and shorter commute times, dense living with lots of walking and bicycling to places that are not spread out everywhere, and because of dense construction and fewer parking lots and highways, there is more space for parks and neighborhood recreational facilities.
4
@Haveheart
Yes, I have traveled to Europe enough to know that even an old-world city like Prague has vastly superior public transit infrastructure compared to anything currently in the Bay Area. The infrastructure ship has sailed in the Bay Area: It’s all about driving and will be for the foreseeable future (barring some solution that’s still mostly in the realm of sci-fi such as viable autonomous passenger drones). In the meantime, adding housing with utterly inadequate mass transit infrastructure just destroys QOL for everyone.
1
They will be able to shelter more profits from taxation, and get tons of free advertising from the media. That is what this is about.
5
One thing to consider, the bill introduced by Scott Weiner would have drastic implications for some cities in the Bay Area. Take Berkeley. Weiner’s zoning changes would have covered around 50% of the city, according to one analysis I read. That is because Berkeley has worked for effective mass transit for it’s residents, especially low income residents. Those same residents would more likely be forced out of their houses and apartments to make way for denser housing that would cost far more. This would displace these people to commute much farther to their low paying jobs, raising their costs even more.
And Weiner’s bill would not hit the larger homes that the tech workers have bought and built. They are not that close to mass transit corridors. His bill needed a lot more consideration for the low income residents, and a lot more effects on the people driving up costs of housing.
4
@AS Pruyn Agreed. So much developer and tech money supporting Wiener et al. Not a high level of popular or local support, despite the push polls. Vast majority of cities are against the SB50 bill proposed by Wiener, aka the “SF mafia”, and the movement to -force- high density zoning. The higher numbers of homebuilding in previous decades..? That was before the government drew dotted lines around metro areas, and said all development needs to occur inside these artificial boundaries. Wiener wants to make all new home building happen in the absolutely, most expensive form conceivable. So sad.
1
I might have read through the article too quickly and missed it, but Proposition 13 (enacted in 1978) may have something or even a lot to do with this. The history and consequences are discussed in the KQED article below (copy/paste title in google to get link):
"Too Few Homes: Is Proposition 13 to Blame for California's Housing Shortage?"
begin quote:
After Proposition 13, all California properties — even vacant ones — are taxed based on the original purchase price, not their current value. That makes it relatively inexpensive to hold onto land, even when the market is hot.
end quote
It looks link land banking coupled with conservation easement would be good business for some. Maybe big-time real estate developers know more about this.
3
Interesting piece, but would like to know more about what is causing housing to be so expensive in CA. Perhaps do an in depth analysis or provide references to some already done?
5
@Alan G
Three things:
Low-interest rates, lack of supply, and tech stock options. That is all you need to know from boots on the ground. I guess climate is another factor.
4
And what drives the lack of supply? I.e., what are the zoning and other restrictions alluded to? How does the limit on property taxes fit into the picture? Seems to me the demand side can’t account for what sounds like out of whack development costs compared to other areas with lots of money chasing housing.
State legislation to force localities to permit large scale development along transit lines was the last best shot to solve what is clearly a supply crisis. The obstructionism by localities (and not the taxes) is the reason developers can’t even afford to build apartments that will rent for $4k/mo.
Someone sue one of these localities over their obstructionism and take it to the Supreme Court. Actually that would only work if the political brain trust in California passed the transit-line development requirement.
21
The irony of this is that it's the tech companies that have destroyed the housing market in the Bay Area. In the past 10 years there are more and more millionaire employees from Google, Facebook, Apple and the rest, with the same narcissistic corporate mentality as their employers, pouring into the area and paying anything anyone asks for homes or land with no regard for anyone but themselves. For the rest of the residents, it's created a nightmare market where no one can afford to buy or even rent. It's spilled into the east bay now where prices have gone through the roof and the median home price is close to $700,000.00. Looks like they should give the money to anybody who doesn't work for any of the 'geek' factories.
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@Ron's Son As the article says, the main cause is the fact that current homeowners resist any effort to re-zone or update zoning regulations. The xenophobic NIMBYism in these supposedly 'progressive' cities that prevents newer housing stock (for tech folk and others) from growing at a reasonable rate to match the regions economic output.
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@Ron's Son
Exactly what has happened in Austin Texas. This problem in the Bay Area has been landing here and now we have the same affordability and lack of housing options.
4
I lived in a one-story single family house in San Francisco for 30 years. I assure you that my objections to an apartment building going up next door had nothing to do with xenophobia.
People choose single family houses because they want yards with sunshine, privacy, quiet and less traffic. Stop trying to make these reasonable desires into something evil.
4
Supply and Demand is defiantly the problem in CA along with the unfair tax structure of prop 13. If you purchased a tract house during the 1970s near San Jose you are a millionaire and pay nothing in property taxes today. The biggest problem is the towns that these tech companies reside were originally developed and zoned as a suburb, not a city. Today these millionaire homeowners overwhelmingly use their wealth to block (not in my backyard) or pressure their elected officials to not change zoning laws and urbanize. The proof can be found in the number of high density zoning permits that are not issued by these towns. State and federal programs setup to address these issues (redevelopment agencies) were axed during the Great Recession.
53
The neo-liberal Rs having been wrecking our social safety net since the 1970's. Poverty is an expensive social cost. It has tentacles that grip souls in order to destroy them. Tech is stepping up to the plate by recognizing that the wages they pay drive up costs and real estate values wherever they locate. Gentrification leads to homelessness. One-time billionaire infusions of capital will not heal the scourge of homelessness. It would be far better for these companies to be taxed per emplyee in order to fund long-term solutions. Either tech is a member of the community--or it is not. Acceptance of their role and impact on community means that they contribute like any citizen--and not extort huge financial concessions from cash strapped governments.
33
Apple, Microsoft and other large corporations should contribute to public goods by paying their fair share of taxes. Corporate mega scale philanthropy like the Gates into health sounds wonderful until you see that their interests may not be the best for the countries, states for cities they are "helping". It opens the door to unfettered power of the corporate interests. Pay taxes and let citizens support expenditure according to public priorities. Lets look at the real issue of housing which is its commodification. Blaming older citizens for staying in their homes like Chris below says is nonsense and ageist. Support that and next they be will after your guest bedroom.
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@Lizi
A lot of older people I know would like to move—but they can’t afford the new places, as rents and home values have skyrocketed.
2
Actually these companies do pay their “fair” share of taxes. What the tax law changes of 2017 did was to implement “territoriality” for foreign earnings, which been the law for years in all other industrialized countries. This means US companies no longer get taxed at US rates for foreign earnings.
Do you think if a company loses money one year, they should be able to carry forward that loss and apply that loss to earnings in future years? When Amazon didn’t pay taxes on profits in one year, it is because they lost the equivalent or more in previous years.
1
No, it won’t. The donations will simply move the market price for housing higher.
The only way to fix housing costs is by removing zoning regulations. That is the real blocker to housing supply.
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@Amir
Reform zoning regs.
I’ve lived in places with no zoning—the results are really bad.
9
@Amir Not true. Land is limited here. If office (job) demand in a limited land supply area is a pre-requisite for housing demand, and if the global demand is severe enough and prolonged enough then building offices on the limited land crowds out housing on the same land, which is actually what is happening, and is, apparently too subtle for journalists to research and write about.
A big part of the housing costs are BUILDING costs not ZONING costs. The building codes are regulated by Sacramento and deal with everything from fire retardant materials to earthquake readiness. The State makes us meet seismic standards. Cal Fire made us put in a sprinkler system, and use fireproof cement siding. The County made us rebuild the sewer connection, use low water flow toilets, etc. This has nothing to do with zoning.
BTW. The resulting quality is first-rate, and everything-proof, but it's expensive, and no retail worker is every gonna be able to afford it.
Finally, San Mateo County on the very small and limited SF Peninsula directs some of it vast sales tax to the Open Space District which uses it to acquire land also on the Peninsula, thereby making land even scarcer. Worse, buildable land on the Bay Side is probably at risk to storm surge from rising sea levels, though no-one seems to care right now.
4
Authors hasn’t given any practical solution except take potshot at tech firms. Increasing taxes mindlessly while spending on freebies aren’t strategy. Tiring.
7
@Dave Nobody's suggesting raising taxes, but rather collecting them from scamming tax-avoiding corporations that are hoarding their money overseas.
These companies pay little or nothing while driving extreme growth, and leaving the resulting increased costs to budget-strapped towns.
110
@hooper - they are paying nothing? Why don’t you really study what Apple, Intel, Walmart, etc are paying in taxes? You want to criticize financial firms like hedge funds, I agree. But just perpetuating a narrative that tech firms don’t pay taxes is Trump lie. I would love to know how much NYTimes pay.
5
You argue that Apple should pay for housing in Cupertino because it’s income is taxed at a low rate in Ireland. It’s European income is taxed at a low rate. Why should that have any bearing on Cupertino’s housing market? Silicon Valley has a housing shortage because of intransigent voters, too-strong preferences for existing single family homes, and NIMBYism.
11
However much we depend on this new technocracy, it has made the cost of living impossibly hard, especially in housing. Who said that moving out, while essential for the functioning of the city, won't make things more expensive by transportation costs...and time wasted in the process?
1
As someone who lives in a New York City suburb with similar problems. Nothing will change until enough homeowners want buyouts. Old people opposed to development have to die off or move. Finally local governments have to accept development or more likely be replaced by those that do whether by consolidation or electing different people..
44
@Chris Exactly. I find it surprising that the progressive residents of many of these cities are all up in arms against (rightly - not saying they shouldnt be) any perceived injustice. But, the same residents resist changes to zoning laws that perpetuate the housing shortage and increase homelessness.
17
@Chris Two factors interfere with older Bay Area homeowners scaling down: 1) For those who want to stay in CA, unless they move within their county or move to a select few counties, their property tax will increase due to proposition 13, even if they move to a cheaper house; 2) their home’s fair market value is so high that they’d have to pay a huge amount in capital gains tax to sell. Homeowners do consider these factors. This contributes to homes suitable for families being occupied by only 1-2 occupants. Mostly they don’t consider selling until they need assisted living or they want to move out of state to be near their adult kids (those who could not afford to settle in the Bay Area).
70
@Chris The seniors upstate have given themselves significant property tax exemptions. Blight results, as they won't use the savings to keep up the home. Then add in the reverse mortgage, and what's going to happen is the home is razed when the senior dies. There is the opportunity for the bank to sell to someone who will develop denser housing.