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July 10, 2017; HousingWire

NPQ writes often about affordable housing, addressing advocacy and policy, city and state (and here) issues, typically in the context of how this type of housing benefits low-income households, such as struggling artists. NPQ also writes about homeless residents in San Francisco. This is a story about a different candidate for “affordable housing.”

In 2011, before its IPO in 2012, Facebook moved its headquarters to Menlo Park, a city at the eastern edge of San Mateo County, in the San Francisco Bay Area of California. Menlo Park has some 32,026 residents. By 2014, Facebook employed 6,818 people worldwide; by 2017, that number rose to 18,770. Last May, Facebook said it was hiring 3,000 additional employees just to monitor content. Facebook and Menlo Park have a gigantic affordable housing problem. Here is a five-minute video explaining Facebook’s newest vision to help address this community and company need for housing.

According to the Rental Affordability Index, which tracks the costs of renting, the world’s highest rents are in and around San Francisco. SmartAsset.com reports that the Council for Community and Economic Research estimates that “the total cost of living in San Francisco is 62.6 percent higher than the U.S. average—and housing is nearly three times more expensive than in other U.S. cities.” The average cost of renting a two-bedroom apartment in San Francisco is $4,650, $1,000 more than the number two US city (New York City) and $2,000 more than any of the other largest cities in the country. Last year, SmartAsset.com estimated that an annual household income of at least $216,129 would be required to afford the rent for a two-bedroom apartment. However, the median household income in San Francisco is only $78,378. To rent an apartment close to work, Bay Area professionals can expect to pay 40 to 50 percent of their salary. Commuting is not necessarily the answer, as just a 20-mile distance at the wrong time and in the wrong direction can often take more than two hours to traverse.

The Guardian interviewed a number of tech industry professionals earlier this year about their housing challenges.

One Apple employee was recently living in a Santa Cruz garage, using a compost bucket as a toilet. Another tech worker, enrolled in a coding bootcamp, described how he lived with 12 other engineers in a two-bedroom apartment rented via Airbnb. “It was $1,100 for a fucking bunk bed and five people in the same room. One guy was living in a closet, paying $1,400 for a ‘private room’.” “We make over $1m between us, but we can’t afford a house,” said a woman in her 50s who works in digital marketing for a major telecoms corporation, while her partner works as an engineer at a digital media company. “This is part of where the American dream is not working out here.”

In a blog post last Friday, Facebook declared its intention to create a new “Willow Campus” on the former 56-acre Menlo Science & Technology Park property it now owns. The new Willow Campus will be located adjacent to Facebook’s headquarters and will be designed by OMA. It will include apartments, a grocery store, a pharmacy, a shopping center, and much more. Facebook will file its plan with the city of Menlo Park later this month, to be followed by at least two years of “formal conversations” with local government authorities and community organizations. Facebook expects the first phases of Willow Campus (retail space and 1,500 units of housing, of which 15 percent will be priced below the market rate) to be completed by 2021. Facebook plans to open this planned community to both its employees and the wider population.

Working with the community, our goal for the Willow Campus is to create an integrated, mixed-use village that will provide much needed services, housing and transit solutions as well as office space. Part of our vision is to create a neighborhood center that provides long-needed community services.

Last December, Facebook invested $20 million to help create a coalition of local partners to help address the pressing issues of affordable housing, economic opportunity, and legal support. Youth United for Community Action, Faith in Action Bay Area, Community Legal Services in East Palo Alto, Comité de Vecinos del Lado Oeste—East Palo Alto, and the cities of East Palo Alto and Menlo Park were the first to join. Of that initial investment, $18.5 million created the Catalyst Housing Fund to specifically pursue the production of affordable housing. According to this memo, only 2,148 new housing units were created in San Mateo County over the past six years to meet housing needs created by 54,000 new jobs. Facebook’s announcement about the creation of the Willow Campus is meant to complement the work set forth by the Catalyst Housing Fund. To address traffic congestions, Facebook will invest “tens of millions of dollars to improve US101.”

Googleplex, headquarters for Google and its parent company Alphabet, is located in Mountain View, population 74,066, bordering Palo Alto and the San Francisco Bay Area. In separate recent news, Alphabet announced plans to spend $30 million on temporary, prefab housing for 300 of its employees. Alphabet did not yet make clear whether it will follow Facebook’s lead in setting aside a percentage of units at below-market rates.—James Schaffer