Major tech firms are pouring money into addressing California’s housing crunch, but some lawmakers and advocates are skeptical the contributions will be enough to solve the growing crisis in the country’s most populous state.
Apple announced last week it would commit $2.5 billion toward helping solve the housing crisis, not long after Facebook and Google both pledged to invest $1 billion. The contributions from some of the region’s largest employers come as the homeless rate and the demand for housing have skyrocketed in the Golden State.
Between 2010 and 2018, a period that has coincided with massive growth for tech companies, the Bay Area added roughly 882,000 jobs, according to the state’s Employment Development Department. In that same period only 177,000 new residential units were created.
That uneven growth has pushed thousands out of their homes: An estimated 28,200 people in the region are currently experiencing homelessness, according to the Bay Area Economic Institute, and that figure is expected to increase further.
Prices for middle-income housing have similarly trended upward, forcing many to move farther and farther away from their places of work.
Apple’s $2 billion effort includes $1 billion allocated to an affordable housing investment fund, $1 billion toward a first-time homebuyer mortgage assistance fund, $150 million for a Bay Area housing fund and $50 million to support vulnerable populations.
Google’s contribution will allocate $250 million to a fund for developers to build affordable housing and $50 million for nonprofits focused on homelessness and displacement. The firm also pledged to rezone $750 million worth of its property for housing.
Facebook’s pledge focused on creating 20,000 new housing units for “teachers, nurses, first responders and other workers [to] live closer to the communities that need them.”
Several other tech companies, including Airbnb and Cisco, have also pledged money for the housing crisis.
California Gov. Gavin Newsom (D) lauded the effort last week, calling Apple’s pledge an “unparalleled financial commitment to affordable housing.”
Other lawmakers, however, are warning that the contributions, while welcome, won’t be enough.
California state Rep. David Chiu (D), who represents parts of San Francisco and has been active on housing issues, told The Hill that he appreciates “the recent decisions by major employers in the Bay Area to step up and lean into addressing the worst housing crisis in Bay Area history.”
But he added that “while some of these contributions sound significant, a billion dollars will go quickly.”
California state Sen. Scott Wiener (D), who represents San Francisco, also cautioned that the money would only go so far.
“It’s fantastic @Apple @Google & @facebook are contributing billions for housing. But tech companies don’t zone land or issue building permits,” Wiener wrote on Twitter last week, adding the money would have “limited impact” without housing policy reform.
The announcements also drew fire from Sen. Bernie Sanders (I-Vt.), a 2020 Democratic presidential contender who has been critical of Big Tech, calling Apple’s investment an “effort to distract from the fact that it has helped create California’s housing crisis.”
“We cannot rely on corporate tax evaders to solve California’s housing crisis,” Sanders said, calling for tax hikes on big companies to address the issue.
Local groups that are engaged with the issue have also raised concerns over Silicon Valley’s response, saying the contributions are a drop in the bucket compared to the scale of the crisis.
“I think the general feeling is great. We’re glad that these companies are getting in and trying to outdo each other,” Gloria Bruce, executive director at East Bay Housing Organizations, a group that organizes community campaigns to overhaul housing rules, told The Hill.
But Bruce said the industry needed to do more than throw money at the problem.
“They really need to continue talking to people because the terms of these dollars are going to be critically important,” she added. “Capital is not actually always the biggest challenge with building affordable housing.”
Ernest Brown, co-executive at East Bay for Everyone, which pushes legislation focused on inclusivity, also commended the companies for their pledge to contribute money. But he noted that “one-off corporate benevolence is not a sustainable strategy.”
“We need tech to partner with us, to lift up the work the community is doing and lift up the expertise of the community,” said Amy Fishman, executive director of the Non-Profit Housing Association of Northern California. But she also argued that the companies “have to work with the experts and the advocates who have been doing the hard work for decades.”
Others highlighted factors causing the housing crisis beyond a lack of funding, blaming some of the problem on poor land use and housing policies.
“California’s housing crisis is one rooted in generations of bad land use decisions and land use decisions that don’t result in California building enough housing for its residents and its future residents,” Kevin Swick, CEO of Housing Trust Silicon Valley, which raises money from large employers and transfers it to those in need of housing, told The Hill. “Everybody has made a series of mistakes to get us into this gap.”
“Yes, tech and an employment boom in general has really brought things to such a heightened degree that we’re seeing double-digit increases in homelessness over the last couple years,” Bruce explained. “But this is all the results of decades of uneven racist, exclusionary policy and building … It’s going to take a while to right the ship.”