Internet Archive addresses housing crisis with “Foundation Housing” project | Hacker News Reader

Internet Archive addresses housing crisis with “Foundation Housing” project

richmondsfblog.com

49 pointsedward28 comments

I don't understand this, I guess. Is it more cost-effective for the IA to buy a house and rent it to its employees at low rates, than it would be for the IA to increase its workers' salaries who would then pay market rates for housing?

If it is more cost-effective this way, why don't all companies do it?

As an employee, I'd be wary of this -- does leaving/losing your job mean losing your home at the same time? 100-150 years ago, corporations used to do this a lot, and along with the "company store" there's a reason they got a bad reputation.

As long as it has COBRA-esq provisions, where you can pay the same rate for 3-6 months after your employment is terminated or you quit, and as an employee you know of this lease provision, I don't believe it poses a problem.

I'm sure it'll all be in the contract. It's not like people wouldn't know what they're getting into?

It also reduces choice. I'd rather have higher pay and select my housing than have lower pay and be forced into this limited selection of subsidized housing.

It also reduces choice. I'd rather have higher pay...

This is the part of your comment where you're already choosing not to work for a non-profit. Non-profits are nearly always unable to compete on salary -- they offer increased benefits, often with positive tax implications, as incentive.

Instead of subsidized housing the money could be used to increase salaries.

The employer may be expecting that employees can treat the housing subsidy as non-taxable.

I am not a tax lawyer, but here's what I imagine are the benefits to the IA over increasing salary.

By owning property, a foundation benefits by having an asset that increases over time, as well as collecting rent (below-market, but enough to cover expenses).

- Paying more to employees sends your money elsewhere.

- Buying property and renting it to your employees sends your money back to yourself, covers the expenses associated with that asset, all while enjoying the increase in value of that asset

I see, thanks. That makes sense.

Why don't all companies do this, then, I wonder? It seems like companies offering people an opportunity to work in SF, plus affordable housing, would be a huge attraction?

I once worked for a startup that happened to have owned some property in downtown SF right at about the cusp of things really taking off in the latest bubble. We didn't use the space and ended up renting it out to a couple other companies.

The rent we charged was a couple times what our payments on the property were -- and quickly going up. At one point the rent we were receiving was greater than our own revenue. We joked about taking our investment dollars and buying up commercial property around the Valley instead of doing our main business.

I believe our board forced us to sell it in order to liquidate the cash rather than go in for another round...I can only imagine what it's worth today.

Distracts from core business, lock in with employees could be an issue, risk if housing market drops away, etc.

Same reason many big businesses contract out cleaning and similar services rather than have dedicated staff performing those functions.

Sure, but then why does it make sense for IA to do this?

My question is, why is IA doing this and no one else - what makes them different? Or are other companies doing it and I haven't heard about it?

Then why rent only to employees? Just buy some real estate and rent it out.

Make money that way in general and use it to fund the foundation.

> sends your money back to yourself

There is no such thing. Money is fungible, it has no label saying where it came from. If you rent the same property to other people (for more money) and then use that extra money to pay higher salary to the employees the end result is exactly the same.

I can't shake the feeling that this is a micro-optimization at the expense of making the larger problems worse by taking even more housing off the market.

You have to start somewhere.

It only takes housing off the market if those employees would have otherwise commuted or not accepted the job offers.

It's "permanently affordable" housing. These units won't be on the general market again any time soon.

Neither would the residents

I'm not sure what will happen with this particular attempt at bringing affordable housing in SF to within reach of people. But I am grateful to organizations out there such as the Internet Archive that are trying different experiments.

with less than 20m depth ocean going for like 10 miles into the ocean, somebody should just build a Millenium Gate few miles off the Ocean beach and end the crisis (or may it will fuel it even more?)

There is no LAND crisis. There is a crisis of failure to build adequate number of multi-family multi-story structures. Replace all the decrepit almost dead 2 story apartments in SF with 10 story apartments and there would be no crisis whatsoever.

>Replace all the decrepit almost dead 2 story apartments in SF with ...

that's was doable back in the USSR and doable today in China. In US it may be easier to build right in the ocean :) For building huge structures 10-20m depth is almost like land and you get added benefit of being able to plan and build all the infrastructure from scratch instead of trying to upgrade and be constricted by the limits of the old. You can build another San Francisco sized city near by just at the cost of the steel and concrete it takes. Smaller number of square miles with 100+ stories high interconnected structure(s) - of any shape/form one can come up with as without historic parcelization you wouldn't be limited to the narrow tall buildings of the standard cities.

>10 story apartments and there would be no crisis whatsoever.

how about infrastructure? water/sewer/electricity/roads?

NIMBYs won't allow building in the bay anyway since it would block their view.

i meant out in the ocean, not in the Bay. Of course many people would oppose it while i'm sure that many would like a view of a Millenium Gate style tower or some other tall structure(s) rising majestically from ocean several miles off the coast. Anyway, it would require state and federal political will to deal with the opposition. Of course it isn't realistic, i was just talking about it as a benchmark to compare other efforts against.

Replace all the decrepit almost dead 2 story apartments in SF with 10 story apartments and there would be no crisis whatsoever.

Well, you'd get a different sort of crisis, where plunging rents would make landlords unable to cover the cost of the new construction. I agree that we need more housing, though.

I wish there were more details on the project. Do employees sign a lease? Do they have normal SF tenant rights?

Do they have normal SF tenant rights?

This part's a definite yes ... even a squatter can get tenant rights by staying somewhere long enough.

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