'Facebook is taking everything': rising rents drive out Silicon Valley families
theguardian.com
theguardian.com
It seems one could argue that affordable housing is much more a public benefit than a for profit sports stadium.
As for Brooklyn, looks like the project was a bust.
https://reason.com/blog/2016/01/12/barclays-center-eminent-d...
edit: I hear Manhatten is an example in the US for an area where apartments!=poor people (except in sitcoms).
Other cities (like San Francisco) had some density but plenty of open land when cars became widespread, so the rich spread into the available land, and the poor stayed in (or immigrated to) the existing density. This is no longer the reality (it's basically rich people everywhere now) but the stigma of living in apartments remains and likely will until a generation or two has grown up in them.
The poor people largely live in North Fair Oaks (AKA Little Mexico), Redwood Oaks, or Roosevelt neighborhoods. These neighborhoods are almost unnavigable due to the cars parked on the streets from all the people crammed into single-family homes. There are a few apartment complexes, but these are almost all low-rises and rents even there are $1500 at the lowest. At minimum wage, that's about 50% of income for a fulltime worker for a shitty apartment in a shitty neighborhood.
It will be a long, long time with a lot of building before it becomes unprofitable to buy the expensive land and build multi-family homes on it here. And Redwood City is about as far as you can get from San Francisco and San Jose while still being on the peninsula. Cupertino is right next to San Jose and I imagine rents are at least comparable, if not higher.
But yesterday's upper middle class apartment complex plex is today's middle class complex, and tomorrow's affordable complex.
Also the well off people who live in the nice complex arent bidding up the prices of old multifamilies as much because of more housing stock.
It also seems odd that in a city where Apple could buy a massive plot of land for their HQ somewhat recently there's no free space left?
I grew up in Cupertino. There are still tons of empty lots everywhere. (Same in San Francisco.)
Note that when I say "empty lot" I don't mean "park". It's just un-owned plots with garbage and grass everywhere.
Three weeks ago. Once in a while, the lots fill in and houses are developed. But there are still tons of empty lots there, at least in Cupertino.
North of Bubb as you go up towards Regnart Road. (Many are odd-shaped due to Cupertino's history of altering streets to navigate around wealthy peoples' houses.)
City owns them and refuses to sell or develop it into a park. Or it's owned but undeveloped, either because the owner is convinced the city will authorize multistory development any day now or the city has put a restriction on developing the lot. Getting construction permits can be very expensive in the Bay Area's suburbs.
Simply not true. London, for example, has very few high rises for the number of people there. And the NIMBY battles are epic. Far more inflamed than even Silicon Valley or the Seattle suburbs.
That's not quite the same.
There is nothing that brings out peoples’ racist character like housing and schools (check out city-data or the various forums for folks with kids in D.C.-area public schools).
plenty of white people in the bay area that can't afford housing.
Landlords want to make money, and as the parent pointed out, low income housing is clearly not a priority in the area.
What's your explanation for that behavior, if not racism? You might argue it's because their white customers would retaliate by not patronizing their business. But that just proves that businesses will discriminate based on race, even if it's not due to the owner's racism but their white customers'.
For example, seeing a family of any race with obvious signs of poverty (large family size, rundown vehicle or none at all, shabby clothes, etc) and not wanting them to move in would be classist. But assuming a black family is poor because they don't have obvious signs of prosperity (very nice car of the right brand, very nice clothes that aren't loud, few and well-behaved children, etc) is racist if the same class heuristics aren't used to determine if an asian family isn't poor.
Although classism is its own problem, it's also very often just a more palatable presentation of racism. In particular, if your baseline class assumption about various races is different and you don't want to associate with people below a certain class, the effect will be racism.
I'm honestly baffled that anytime someone on HN brings up racism in the US it's immediately countered with: "It's about class, not race." There's ample history in Jim Crow laws that white Americans discriminated explicitly by race. Specific to the region mentioned by the grandparent, Washington, DC, like much of the South, had racial covenants that made it illegal for African Americans to live in much of the city.
Of course there has been, and continues to be, very real discrimination by class. But we know that legal discrimination by race in the US existed well into living memory. Why would we immediately assume that it has stopped?
https://wamu.org/story/14/01/17/how_racial_covenants_shaped_...
Reminds me of people in affluent VA and MD suburbs. They are super liberal and for diversity but they will do whatever they can do to not allow anybody that's not well off or different even near their neighborhoods or schools. SV is probably the same.
I don’t doubt that in the South such ideas were co-opted by advocates of the racial status-quo. But it’s not helpful to project that notion onto other places, even if they are in the US.
For example, suburbanization due to cars happened in the U.S. as well as Europe. But if you look at large Western European cities (London, Rome, Munich, Hamburg, Madrid, Paris), their populations have been stable or growing since 1950, despite suburbanization. But if you look at major U.S. cities (Chicago, Philadelphia, Washington D.C., Pittsburgh, Detroit, etc.) you see a very different pattern. They lost a quarter to a half of their population in just a few decades, even as the surrounding metro areas kept growing. That was the result of white flight--race-driven mass migration. Today, Philadelphia is majority black and low income, while the surrounding suburbs are predominantly white and much higher income. That's the exact opposite of say Paris, where lower-income folks live in the suburbs not the city.
It's hard to look at America's history of racism in housing and urban development policy and not think that it carries through to present day. For example, the U.S. has much stronger opposition to public transport than Europe. Might it be because public transport inherently allows integration and mixing, something that people in a racially-heterogeneous society find more threatening?
Likewise it’s counter-productive to view US history purely through the lens of racism, important as it may be. White flight occurred during a post-war boom of new housing, new roads, especially the new interstate highways, and newly wealthy post-WWII economy full of qualified GI-bill graduates. The baby boom still remains the highest rate of births the US has seen, and all those families needed housing. Developers built the suburbs in response to those factors. The modern family had their own house, their own garden, a clean, quiet street, fresh air. The modern man drove his own clean, personal, car to work in the city on one of the new highways. Meanwhile automobile/tire/gas companies were literally buying up city street car services and closing them down to force cities to replace them with busses (which they could sell them). Similar stories happened in cities all over the world during this period of post-war economic expansion. But the story you tell above gives racism the sole credit for what happened and that’s not even remotely accurate.
Was racism a factor? Absolutely. “Redlining” by banks prevented black families from buying a house in the suburbs. In some cases realtors engaged in “blockbusting” so that they could sell all of the houses in a neighbourhood.
Race is a huge and important factor in American history and politics but the narrative you give above is really not representative of what happened.
Likewise your description of Europe is misleading. Many European cities lost their industrial base and never recovered, one only needs to look at the North of England to find ample examples (Birmingham, the UK’s heavily industrial “second city” had its peak in 1951). Meanwhile the suburbs boomed.
Your list of major US cities excludes LA, the 2nd largest, which has boomed.
Your example proves it: cars enabled people to have "their own house, their own garden, a clean, quiet street" in Western Europe too. Western Europe had a baby boom too. But U.S. cities lost 25-50% of their population, while Western European cities continued to grow steadily that whole time. U.S. cities today remain inverted compared to European ones--many are low income and majority-minority even though the surrounding suburbs are prosperous.
You need something to explain that disparity. And it can't be things like automobiles or the desire to live on a quiet street, because that existed contemporaneously in Europe too.
The contemporary inversion of the core of European cities is a modern phenomenon because most European cities spent the latter half of the 20th century in a similarly impoverished situation to the US. It is gentrification and taxpayer-funded regeneration that has fixed this problem - Don’t make the mistake of thinking that the problem never occurred. So how did Europe fix it? Perhaps because Europe has better social programs and social housing and is able and willing to fund them.
As a European looking at the US I see a place that, despite its complex history, is really not so different in terms of the factors driving urban and suburban living. Its racism may be unique and distinguishing but it is not always the most important factor.
Where is the precedent in Western Europe for a city of 1.8 million people (bigger than Munich or Barcelona) losing 65% of its population? It doesn't exist.
And unlike Birmingham, whose decline was tied to specific economic problems, the metro areas of these U.S. cities continued to do well despite staggering population losses and ghettofication in the core cities. It's not like the suburbs of Birmingham were prospering while the core city was in decline.
Europeans really don't understand the scale of the race problem in the U.S. Many Americans don't understand it--it's hard to understand until you spend some time in Philadelphia, etc., and see a place that is majority minority and disproportionately low income, surrounded by prosperous mostly white suburbs. It's a demographic trend that happened literally because white people didn't want to live next to black people, and simply left.
Having seen the desolation of the boarded up industrial sites of Philadelia and of the UK, I can say that they look pretty similar (that is to say shocking - though far more so in my youth). The general pattern of cities in the UK's industrial north is exactly the same as that seen in the US - a small, regenerated downtown, surrounded by small, low-quality dwellings occupied by low income families, surrounded by increasingly nice suburbs where everybody else lives. I'm not sure why anybody thinks this problem is unique to the US.
In Cupertino I seriously doubt the residents of new construction apartments are going to be poor by any definition. A new 1-bedroom apartment would likely rent for 3600+, and a 1-bedroom condo would sell for north of a million. The new residents would likely be well educated and easily in the top 5% income bracket in the US.
Let's say they followed through with your ideas/criticism: They allow unlimited multi-story flats to get built, the area is now full of the things. Population density will increase further, but major infrastructure won't, so now you need bigger roads, more roads, maybe a subway, smog goes through the roof, activity areas (e.g. parks, recreation) disappears into building or more roads, and now suddenly Cupertino is downtown LA at rush hour and nobody wants to live there.
Or Cupertino can say "no" keep the atmosphere that has made it successful, including its medium density housing, keep population down, keep room for activities, keep road congestion at its current levels, and only have room for a small handful of large companies instead of infinite amounts.
Spinning this as "they just hate poor people" is definitely a great way of distracting from the core issues though.
Los Angeles is a case study in urban transportation failure. The sprawl encouraged by Silicon Valley's low-density preference is more of a contributor to the region's traffic and pollution problems.
> Or Cupertino can say "no" keep the atmosphere that has made it successful
To be clear, I'm not saying Cupertino should say "yes". Just that the natural consequence of "no" is higher housing prices and people being relocated as a function of income. (Also, the area becoming less attractive to startups vis-à-vis large companies.)
There are some that manage it better than others. Constraining sprawl is one requirement. But public transportation is another.
Silicon Valley has trapped itself at a density where it's high enough to produce traffic, pollution and all the downsides of an urban environment, but not high enough to merit lots of public transport.
As a result, I end up Ubering from Cupertino to Mountain View--and back--every day I'm in the Bay Area, along with thousands of other people with a virtually-identical commute.
But in my experience places like NYC (Manhattan in particular) have done a fairly successful job of allowing people to opt out from the traffic problem by using public transit, walking, or uber/taxi instead. A lot of other cities could play catch up there.
We overflow into Brooklyn, Queens and New Jersey quite easily. In any case, most of uptown is relatively low density. The density exists because of the demand in a few concentrated areas and because it's permitted.
Mass transportation! Oh, the humanity!
That being said, there are ways to can solve this to protect the 'natural charm' to an area. There's a middle ground between "free-for-all non-existent building regulations" and "say no to everything". Sydney, for example, has a gradient high limits imposed on the CBD to ensure there's a gradual rise, and limits to ensure natural light corridors still exist where they need to.
Literally nothing you listed there necessarily follows. Growing populations is often specifically the reason greater infrastructure is built. SF, regardless of it's construction boom has yet to remove a park/rec area that I've heard of and, in fact, is building a new one on top of it's new transbay terminal. NYC has a wikipedia page listing it's parks (hmmm, biggest city in the US, why haven't they just paved them all over to support more people?!) Smog... you're actually bringing this up? Smog is created when people have to commute 1-2 hours to GET to Cupertino, often sitting traffic, not when people can actually live sort of close to where they work (further, smog isn't currently a problem in the bay and is likely to decrease as people transition to electric vehicles over the coming 20 years, but I digress).
If Cupertino doesn't want to be downtown LA, the prescription is literally the opposite of everything you've suggested, as their focus on building more office space instead of housing is what will turn them into a by-day business center for bedroom communities on other side of the bay. (Or, they could stop incentivizing businesses and office space and maintain their look/feel by letting some other parts of the bay have a piece of the tech boom).
If you increase road capacity, demand just rises to meet it until it is congested again. The point is to find other solutions.
I would say that not building is short term thinking. Workers and companies will leave the area. I would also argue that housing had little to do with silicon valley's success. That was access to large amount of tech workers (universities in the area) and lots of government research money.
EPA and Menlo Park in that area are a bit like the land that time forgot. Historically high crime, heavily minority. East Palo Alto in particular has had much government corruption over the ages. The area has been an oasis of cheaper housing that many people virtually forget about unless reading about a shooting or going to Ikea. In many ways its been isolated from the rest of the housing market. I can only presume that when Sun Microsystems occupied the current FB campus, nobody wanted to live there. Now that Facebook is there, and vastly bigger than Sun ever was, building infrastructure, plus Amazon is there now by the Ikea, the area has become desirable to "rich" people. Whereas places like Cupertino have been relatively desirable for a long time, and the size of the employer doesn't dwarf the habitable units by such a great amount.
Source: I'm currently gentrifying a neighborhood <2mi from FBHQ.
- The rent increases are choices made by landlords, not Facebook.
- Even as quoted in the article, residents seem to believe that living in a place for a long time entitles them to continue living in that place longer at a price they find agreeable. I personally have been priced out of neighborhoods I loved living in twice in my life, once after living in the same place for 8 years and feeling a huge sense that it "was my home." It's sad and upsetting, but nobody is entitled to live in some place just because their family historically has lived there a long time or they personally have lived there a long time or theyhave some cultural identity to that place. It's not a nice part of reality, but that's just how it is. Playing on sympathies by hearing people say, "but we've lived here 10 years and Facebook doesn't care" is just an ineffective way to look at it, for all parties.
- As usual, the group of people most impacted (displaced tenants) is the group least capable of financially weathering the changing circumstances or politically lobbying for their preferences to be protected.
- If I were a Facebook employee, I would feel some measure of resentment towards the property groups doing this. One reason is because the property managers know the bad press will be flung at Facebook, not them. Another reason is that the property managers are essentially looking at the wages paid by Facebook as something they (the property managers) are entitled to (by raising rents to adjust for higher salaries). The landlords are not improving their value-add in any way, just raising prices to capture more of some other productive person's wages.
- And, of course as others have pointed out, it's largely driven by lack of new housing or high-rise housing.
When the neighborhood is working class and props up "stability" (in the form of not letting new people in unless they are 'like us'), it's a recipe for disaster.
This is an extremely hard problem to solve. I had a good family friend who lost her job as an elementary school teacher because a neighborhood rapidly gentrified and people moving in did not have children. Over about a 2 year period, rents rose and school enrollment dropped severely and the school had to cut staff.
But I also have a friend whose car was vandalized repeatedly in a neighborhood of Pittsburgh because he was associated with a tech company there that was popularly blamed for gentrification. He felt scared living there, which he should not have to feel no matter what the reason (i.e. he does not belong to any minority groups in terms of race, etc., but deserves to feel safe at his own home like anyone else does).
The idea of "stability in a neighborhood" is hard to pin down, because things can range from outright xenophobia to thoughtless gentrification, and market economics usually just acts like throwing gas on the fire no matter which end of the spectrum you're in.
I would note that this article mis-identified Jesshill Love, whom they call an “investor”. He may do some investing, but he is first and foremost a real estate lawyer at a small-ish law firm. I know this because his wife was a recruiter at a company I worked at for several years. This mistake doesn’t undermine the general thrust of the article, but it is a little weird to get this detail wrong. He’s the only person they identify by name, and a quick google search would show that he’s a real estate lawyer. Searching “Jesshill Love investor”, on the other hand, turns up nothing of the sort. Not the sign of a well-researched article — even if the gist of it is undeniably true.
For example where I live landlords can only raise rent by 10% every year for current tenants. The landlords can charge whatever they want for new tenants but they are limited for existing tenants.
The market works this way. Facebook is just paying the employees higher than some people in the area are earning. What's the matter?
I imagine that for those people this situation is annoying and frustrating, so they are just speaking out of these emotions. I can understand a newspaper publishing such a emotionally driven, nonsense Bolshevik article to get views (mission accomplished).
I hope that this article didn't reach the first page just because it contains the word "Facebook" and some complaining I guess. "Let's all look down on the new public enemy" If that's the case, we can do better!
PS: I don't work for Facebook and I don't particularly like the company
Maybe over time they move away and then how would lower income jobs be filled? Will wage hikes be necessary, which would then likely drive costs up?
Rent driving lower income people out of the area is possible, but these articles can paint an exaggerated picture of what’s happening. The areas where techies are moving in en masse are not everywhere; SF and Mountain View are neither the entirety nor representative of the SF Bay Area, they’re just what you’ll see articles on here about most often.
At some point maybe people give up on that and move out of the overall area?
Rising housing costs are a real problem for the kind of people we might meet at work or networking (assuming you’re also in the tech industry). But this is a very biased sample.
As soon as you go a little out of the peninsula there is farmland, for Pete’s sake.
If they were allowed to build let's say 10 20 story buildings there would be no need to evict current renters.
I'm sure it's been considered.
Generally speaking, if a fragmented group (e.g. Silicon Valley land owners) is behaving in a cohesive way, greed probably isn't to blame. In this case, it's supply and demand. If rents were capped, we'd instead be talking about housing queues and quotas.
Calling someone "greedy" works when it can shame them into submission. (For example, shaming a drug company's executives for dramatically raising a patented drug's price.) It doesn't work when the blame can be shared away.
The other difference between demand driving prices versus sellers "greedily" increasing them is the risk of shortages. If the drugmaker from my prior example reduces prices, it probably won't cause a shortage. Capping housing prices in the Bay Area, on the other hand, would result in queues and quotas.
Calling the Bay Area's landowners "greedy" isn't only ineffective, it's also inaccurate. If someone bought a house recently, they probably need to charge a high rent to cover their mortgage and property taxes.
If "housing shortage" sounds neutral or preferable to you, try to imagine the human-interest sob stories that would be written about how long-time residents are preventing anyone from moving in, or how unfair it is that this person got one of the underpriced slots ("a white male Facebook engineer from out east") and this other person ("disadvantaged resident whose family has been in the area for two hundred years") didn't. To the extent the problem is "Stop sob stories being written about Silicon Valley", trading high rents for a housing shortage didn't solve the problem, just moved it around.
Or how upset a lot of people would be if Facebook just leaves because they can't get enough housing.
Cutting prices would also reduce the motivation for others to figure out how to build more housing, because the higher the rents get the bigger the prize is for building more housing.
Trying to use price fixing to mask underlying problems has a long track record of failing to fix the underlying problem, and then creating problems of its own.
(To be honest, "Facebook leaving" or some equivalently sized employer is the only real solution that's ever going to work out. I think a good case can be made that Silicon Valley the business is now simply physically too big to fit into Silicon Valley the geography. Even if density was increased to the requisite levels, that would cause its own problems that people would be complaining about with air quality, even worse traffic, etc.)
The solution when market price is out-of-whack is to solve the cause of that, not politely ask suppliers to change their prices or consumers what they are willing to pay.
FB had obviously been growing for years. If you lived in an area for more than 5 years, you should probably stop renting.
If you moved there and dont have a tech job? Whhyyyyyyyy?
I cannot understand this issue, it seems everything was in place for this area to eliminate problems.
(no one really makes minimum wage)
Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years?
> Lets be real here, isnt the problem that many people didnt save money and havnt developed their career over the last 10 years?
For the sake of argument, let's say this is a possibility for everyone. Let's say, despite high rents, everyone can save a certain amount each month. Let's say that every elementary school teacher can advance to being superintendent, and every automotive technician can eventually own his own shop or become a district manager of a chain.
This wouldn't solve the problem. Then house prices would be even higher, and there would still not be enough housing.
I thought we were talking about people making 8$/hr.
An starting elementary teacher making 30k/yr or a tech making 40k/yr can save up for a downpayment.
If they didnt, we know they spent it on new cars, clothes, iphones, etc...
I have lived on 19k/yr for 2 people, its not only possible, but it seemed easy.