Facebook on Tuesday committed $1 billion to tackle affordable housing shortages in the Bay Area and California — a surprise move that lands the social media company among the handful of corporate giants offering massive amounts of cash to ease the crisis wracking the state.
Over the next 10 years, that $1 billion — in both money and land — will help create up to 20,000 homes where teachers, nurses and other essential workers can live closer to the communities they serve, according to Facebook. The Menlo Park-based company also unveiled a new partnership with Gov. Gavin Newsom’s administration to build homes on excess state-owned land.
The move comes four months after Google’s $1 billion pledge to bolster the Bay Area’s housing supply. Those two massive contributions reflect a growing push among local companies to help, as they increasingly are blamed for the punishingly high rent and housing prices caused by an imbalance between the flood of jobs created by the region’s booming tech industry, and the trickle of housing units built to hold those workers.
“What this commitment today is saying is that where we grow, we want to support local communities,” said Menka Sethi, Facebook’s director of location strategy and site optimization, who oversees the company’s housing efforts. “We’re going to help partner with local communities to make sure we contribute and do our part.”
The majority of the Facebook money will go toward building housing in the Bay Area and around the state, while a portion may fund homes outside California. The tech company has pledged:
— $250 million to develop housing on state-owned land throughout California.
— $150 million to produce affordable housing and housing for the homeless in the Bay Area, through a fund launched in January by the Chan Zuckerberg Initiative, the San Francisco Foundation, Facebook, Genentech and others.
— $350 million to be deployed in the future as needed, including to support affordable housing outside California in communities where Facebook has offices.
— $25 million to help build up to 120 apartments for teachers in Palo Alto, a donation Facebook previously announced five days earlier.
— $225 million in Facebook-owned land in Menlo Park, which the social networking giant has set aside to develop more than 1,500 units of housing as it expands its campus. Facebook is planning a development dubbed Willow Village — complete with office space, housing, retail, hotel rooms and a town square — on Willow Road between Ivy Drive and Bayfront Expressway, south of the company’s main campus.
“It’s exciting to see that major employers are stepping up in a big way to support affordable housing,” said Kevin Zwick, CEO of Housing Trust Silicon Valley. “We hope this provides more momentum for other major employers to come out with their own billion-dollar housing plans. We all recognize that more resources are needed to address our affordable housing crisis, so announcements like today’s are really welcomed.”
Facebook’s pledge also answers two calls to action the governor posed when shaping his housing-focused agenda. When unveiling his budget in January, Newsom called on California companies to contribute $500 million to help build workforce housing in the state. He also launched an initiative to develop affordable housing on state-owned land throughout California, including in Oakland, San Francisco and Sacramento.
“State government cannot solve housing affordability alone,” Newsom wrote in a Facebook news release, “we need others to join Facebook in stepping up – progress requires partnership with the private sector and philanthropy to change the status quo and address the cost crisis our state is facing.”
Last year, families making $100,000 could afford median rents in just 28 percent of Bay Area neighborhoods, according to a recent data analysis by this news organization in partnership with Zillow. Buying a home isn’t any easier. In Menlo Park last month, homes sold for a median price of $1.86 million, according to Zillow.
In response, large companies, particularly in the Bay Area, increasingly are getting involved. The momentum started building in 2017, when Housing Trust Silicon Valley launched its TECH Fund as a way for tech companies and other organizations to invest in local affordable housing. To date, the fund has raked in $112 million from companies including Google, Cisco, LinkedIn, NetApp and Pure Storage — money that has been used to help build 2,255 homes.
Last month, Airbnb announced it will invest $25 million in projects that support affordable rental housing, home ownership and small businesses in the San Francisco and Los Angeles areas. Google in June pledged $1 billion to address the housing crisis — including setting aside $750 million of its land for housing development — with the goal of adding about 20,000 homes to the region. In January, Microsoft committed $500 million to housing efforts in the Seattle area.
“The need for bold affordable housing solutions has become too urgent for major companies like Facebook to ignore,” said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California. “Their commitment is an important step in the right direction.”
San Jose Mayor Sam Liccardo also cheered the move.
“I applaud Facebook for stepping up to make this extraordinary $1 billion commitment toward our collective work to combat this housing crisis,” he wrote in an emailed statement. “As a company that serves billions of customers with thousands of employees throughout the world, it’s uplifting to see Facebook recognize the need in their own back yard.”
