Facebook Teams With Foundations To Launch $500 Million Affordable Housing Initiative
Organizers Seek to Address Rising Rents That Have Priced Out Many Across Silicon Valley
Businesses and foundations are seeking to create a $500 million fund to address housing issues in Silicon Valley and California’s Bay Area. Photo: CoStar
A nonprofit organization backed by Facebook founder Mark Zuckerberg is leading a $500 million fundraising effort to help address a shortage of affordable housing across California’s Silicon Valley, a problem some blame on the world’s largest technology companies.
Tech companies such as search engine giant Google and social media platform Facebook now employ thousands of high-wage workers who over the years have driven up average market rents and priced out local residents in areas where housing supply has not kept up with demand.
The effort aims to preserve and create more affordable units in San Francisco, San Mateo, Santa Clara, Alameda and Contra Costa counties. It is backed by Zuckerberg and his wife, pediatrician Priscilla Chan’s foundation, the Chan Zuckerberg Initiative. Other backers include Facebook itself, the Ford Foundation, the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, and local entities such as the San Francisco Foundation and the Silicon Valley Community Foundation.
“What has always made the Bay Area so special is its entrepreneurial spirit and its orientation towards progress and justice,” Chan said in a statement. “Those same qualities can help us build collaborative, thoughtful, new solutions to make housing affordable and accessible for all people who call the Bay Area home.”
The new partnership’s announcement comes just months after voters in San Francisco approved Proposition C, a ballot measure that taxes the largest corporations in the city to generate more funding for services benefiting people dealing with homelessness. The measure is championed by Marc Benioff, chief executive of customer relationship management software company Salesforce, and opposed by others, such as Jack Dorsey, chief executive of online payment company Square and social media platform Twitter.
The partnership said it has secured $260 million of its $500 million goal. Investment bank Morgan Stanley is an investor in the fund, which will be managed by the Local Initiatives Support Corp. The Partnership for the Bay Area’s Future intends to create two funds, an investment fund and a policy fund, to expand and preserve affordable housing for up to 175,000 households in the area over the next five years while producing 8,000 affordable housing units in the next five to 10 years.
The fund has already completed its first transaction: A revolving line of credit for community development organization East Bay Asian Local Development Corp., which intends to put the line of credit to use on projects over the next five years.
“The scope of the housing crisis requires bold action,” said California Gov. Gavin Newsom in a statement. “And it also requires that all sectors come to the table to drive new solutions – the government, the private sector, philanthropies, advocates and faith leaders. This multi-sector approach reflects just that, and will help move our state forward on one of the biggest issues we face.”
Cities in California’s Silicon Valley that are home to major tech companies are trying different ways to mitigate the impact they’ve had on the communities they call home. In Google’s hometown of Mountain View, California, the company has tentative plans to build 10,000 housing units.
Facebook is in the midst of expanding its headquarters campus in Menlo Park, California, but in the meantime is planning a mixed-use development called Willow Park that is expected to include 1,500 housing units.
“We want to make sure that we are a responsible neighbor and that our growth in Menlo Park really is a benefit to the community and that we’re able to sort of leverage our position in the region to help move some of the challenges that the community faces along to solutions,” Facebook’s Strategic Initiatives Manager Ryan Patterson told CoStar News in an interview about the company’s growth.