All across the nation, affordable housing has become harder to find. With the average condo sales price in Manhattan hitting $1.9 million in 2017, it’s no surprise that nearly 44 million Americans were burdened by housing costs a year prior. Moreover, a survey conducted in 2018 revealed that more than one-third of those renting homes were not able to embrace homeownership because they couldn’t afford to. And since millennials are already putting half of their incomes towards monthly rent, owning a home seems completely infeasible for many.
California, in particular, has seen its fair share of affordable housing issues. The state’s poverty rate is the worst in the U.S., when adjusted for the cost of living. Although roughly 12% of the country’s population lives there, a staggering one-fourth of the nation’s homeless population is located in the Golden State. The median house price in California is twice the national rate, coming in at $600,000 — and four of the five most expensive residential real estate markets are located here. So despite the fact that there were an expected 809,000 construction machines sold on a global scale in 2017, it’s clear that this equipment isn’t often used to construct new budget-friendly builds.
That could change, though. For one thing, a new affordable housing bill was just passed by the state, which would exempt land trusts from paying property taxes on affordable housing. This could potentially lead to an affordable housing boon statewide. So while some people might currently find that the 2.3 billion square feet of ready-to-rent storage space is currently easier and cheaper to find, it’s possible that homeownership could become a reality for California residents who never imagined they could afford to go that route.
And then there’s the financial commitment that the biggest tech corporations have made to affordable housing development. Apple recently announced that they’ll pledge $2.5 billion for affordable housing projects in California, following in the footsteps of Facebook, Google, Amazon, and Microsoft — all of which have pledged substantial amounts to promoting affordable housing starts. Part of this substantial contribution includes $300 million worth of company-owned land, as well as $50 million earmarked to address homelessness and $150 million to create an affordable housing fund with Housing Trust Silicon Valley.
In an official blog post, Apple CEO Tim Cook explained: “Before the world knew the name Silicon Valley, and long before we carried technology in our pockets, Apple called this region home, and we feel a profound civic responsibility to ensure it remains a vibrant place where people can live, have a family and contribute to the community… Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
Up until now, Apple has largely declined to publicly proclaim its ties to the Silicon Valley (and Cupertino, in particular), despite the fact that the company is the largest employer in the area. And while the pledge is certainly a sizable one, experts are skeptical that it will be enough. According to the California Housing Partnership, the state requires 1.4 million below-market homes to satisfy the current demand for affordable housing. And while interior designers recommend updating a room’s decor every five to 10 years, many residents in the Bay Area and Silicon Valley — who have been pushed out of their homes completely — no longer have rooms to call their own.
Tech companies have taken quite a bit of heat for not getting involved earlier, as the rapid expansion of these enterprises has had noticeable effects on surrounding communities. There are other factors at play, as well, including zoning regulations and local laws, protests against housing starts, and more. And since many residents can’t even afford to live in the cities in which they work, it’s no wonder Bay Area homeownership is now at a seven-year low. So although the contributions from tech companies may sound like a solution, there are other considerations that may get in the way of creating housing that Californians can afford.
Moreover, as the New York Times points out, these commitments are not all philanthropic. In providing corporate land to this cause, Apple and others are actually making housing investments, which will allow them to profit off of housing development. It’s certainly a good PR move, but it might not be as altruistic as it seems.
Californians will have to wait and see whether these contributions will really make it possible for them to buy homes they can afford in the future. Until then, many might still have to make do with long commutes or with paying monthly rent — neither of which will come cheap.