Apple wants affordable housing in California—but laws stand in the way
Apple has pledged $2.5 billion to help address California's affordable-housing crisis, the company announced on Monday. In recent years, the San Francisco Bay Area has become the most expensive housing market in America. Los Angeles also suffers from housing costs far above the national average.
Apple's $2.5 billion package includes several different initiatives. Apple will offer a $1 billion line of credit to organizations building housing for low-income people.
[...] Apple's commitment follows on the heels of similar announcements by other technology giants:
- In January, Microsoft said it would provide $500 million in grants and loans to promote affordable housing in the Seattle area and aid the homeless.
- In June, Google announced a $1 billion initiative, including $750 million worth of Google-owned land, to support the development of at least 20,000 new housing units "at all income levels" in the San Francisco Bay Area.
- In October, Facebook unveiled its own initiative to offer $1 billion in grants and loans to support the construction of 20,000 housing units in the region.
Apple's initiative is larger than the other programs and appears to be more focused on low-income housing.
But there are some problems that can't be immediately solved with money:
These efforts to promote affordable housing are laudable, but corporate initiatives alone are unlikely to solve California's housing crisis. The Golden State's fundamental housing problem is that state and local laws simply don't allow developers to build enough housing to accommodate rising demand.
In the 20th century, cities could accommodate growing demand for housing by pushing suburbs outwards. But in major metropolitan areas like San Francisco and Los Angeles, that process has largely run its course. Most of the land within a reasonable driving distance of job centers has been developed. Which means that the only way to accommodate further growth is by increasing density: replacing single-family homes with duplexes, townhouses, and apartment buildings.
The problem is that the law doesn't allow this in most areas. A Los Angeles Times analysis found that 62% of land in Los Angeles is zoned for single-family homes only. In San Francisco, 75% of the land is zoned not to allow anything denser than a duplex. Laws in suburban Silicon Valley are even stricter.
Previously: Google Pledges to Build 15,000+ Homes in San Francisco
Related: Soaring Rents in Portland, Oregon Cause Homelessness Crisis
"It's a Perfect Storm": Homeless Spike in Rural California Linked to Silicon Valley
Silicon Valley Charter Buses Vandalized by Pellet/BB Guns or Rocks
In San Francisco, Making a Living from Your Billionaire Neighbor's Trash
SF Facebook Office Worth More Than $1 Billion in Sale - City Gets $0 in Taxes
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It's hard out there for a Portlander:
With no laws mandating caps on yearly rent increases in Oregon, which for three years has been US's top moving destination, homelessness is increasing.
A city of bridges, Portland is full of places where people who are homeless can find dry, covered shelter from the Pacific North-west downpour. But lately, Portland is facing a housing crisis of a different sort as shelter for the homeless has become anything but discreet. New communities of vinyl pop tents and makeshift camps have been popping up everywhere, with many spilling out into city parks.
As a quick fix to address the prevalence of homelessness, Mayor Charlie Hales announced a plan this week to manage "camping" throughout the city for safe sleeping. Homeless will now be allowed to sleep overnight on sidewalks, with a sleeping bag and a tarp, while tents will be acceptable in certain areas from 9pm to 7am. Up to 10 city-sanctioned campsites with a couple hundred disaster-relief pods will be established through nonprofit service providers. Cars and RVs for homeless to camp in will be permitted in designated areas, such as church parking lots, and at least three or four spaces for more temporary shelter are being located. Though largely experimental, the plan has been given a six month trial run. But as a strategy, it's markedly different from other west coast cities, who have been adopting a strategy of clearing out visible homeless camps in recent years.
[...] Portland saw rents appreciate nearly 15% in 2015 – the highest increase in the nation – with an average rent of $1,689 per month, according to real estate company Zillow. Five years ago, it was around $980. And rents are only trending upwards. Zillow is forecasting that Portland will be among the nation's top six rental appreciations. Apart from Denver and Buffalo, the other cities are all on the west coast: San Francisco, Seattle, and San Jose. The forces driving Portland's rents are far from few. The city has a less than 3% vacancy rate. Meanwhile, the Portland Housing Bureau said 85% of all rental units currently being built are luxury.
California's Central Valley is best known for supplying nearly 25% of the country's food, including 40% of the fruit and nuts consumed each year. Yet today, backcountry places such as Patterson, population 22,000, are experiencing an increase in homelessness that can be traced, in part, to an unlikely sounding source: Silicon Valley.
The million-dollar home prices about 85 miles west, in San Francisco and San Jose, have pushed aspiring homeowners to look inland. Patterson's population has doubled since the 2000 census. Average monthly rents have climbed from about $900 in 2014 to nearly $1,600 in recent months, according to the apartment database Rent Jungle, compounding the hardships of the foreclosure crisis, the shuttering of several local agricultural businesses and surging substance abuse rates.
"The rents in Patterson are crazy," said Romelia Wiley, program manager of the local not-for-profit organization Community Housing & Shelter Services. "Why? I-5."
The freeway offers commuters access to high-paying job centers near the coast, and the number of people commuting to the Bay Area from the portion of the Central Valley that includes Patterson more than doubled between 1990 and 2013, to about 65,000 people, or at least 15% of the local workforce, according to an analysis by the University of the Pacific.
Why don't they build up instead of out?
5 shuttle buses chartered by Google, Apple apparently vandalized on I-280, possibly with pellet gun
Shuttle buses carrying Apple and Google employees were apparently vandalized Tuesday while traveling to and from the South Bay, officials said. No injuries were reported.
Five buses driving in the northbound and southbound directions of Interstate 280 between Highway 84 and Highway 85 were damaged during the Tuesday morning and evening commute, said California Highway Patrol Officer Art Montiel. Four buses were chartered by Apple and one by Google, the officer said. The Apple campus is located off I-280 in Cupertino. Google headquarters is in Mountain View off Highway 101.
According to Montiel, several bus windows were damaged and cracked, possibly by pellet guns, BB guns or rocks.
According to an article on TechCrunch
In response, we've learned that Apple has rerouted the bus routes for employees living in San Francisco, adding 30-45 minutes of commute time each way, as the company works with authorities to see what exactly is going on.
Also at The Guardian.
In San Francisco, Making a Living From Your Billionaire Neighbor's Trash
Three blocks from Mark Zuckerberg's $10 million Tudor home in San Francisco, Jake Orta lives in a small, single-window studio apartment filled with trash.
There's a child's pink bicycle helmet that Mr. Orta dug out from the garbage bin across the street from Mr. Zuckerberg's house. And a vacuum cleaner, a hair dryer, a coffee machine — all in working condition — and a pile of clothes that he carried home in a Whole Foods paper bag retrieved from Mr. Zuckerberg's bin.
A military veteran who fell into homelessness and now lives in government subsidized housing, Mr. Orta is a full-time trash picker, part of an underground economy in San Francisco of people who work the sidewalks in front of multimillion-dollar homes, rummaging for things they can sell.
One Zuck's trash is another man's "like new".
From SFChronicle
A pending deal to sell almost half of Park Tower, one of San Francisco's tallest office buildings, could lead to $539 million changing hands and set the new skyscraper's value at more than a billion dollars — an almost unprecedented sum.
But the city will get nothing from the deal, at least in the form of the transfer taxes it collects on most sales of real estate.
That's because owners MetLife, John Buck Co. and Golub plan to sell a 49% stake in the property at 250 Howard St., where the office space is fully leased to Facebook.
Since less than half of the property is trading, the deal won't count as a change in ownership, exempting it from San Francisco's 3% transfer tax on deals over $25 million, said Jeffry Bernstein, a partner and tax expert at law firm Coblentz Patch Duffy & Bass. If it was subject to the tax, the city would receive more than $16 million.
[...] San Francisco voters increased the transfer tax on property sales over $5 million in a 2016 ballot measure, in an effort to make City College free for residents. While voters can change transfer tax rates, Bernstein said any efforts to make sales of partial ownership stakes subject to the tax would "have to come out of Sacramento."
Google announces $1B, 10-year plan to add thousands of homes to Bay Area
The housing crisis in the Bay Area, particularly in San Francisco, is a complex and controversial topic with no one-size-fits-all solution — but a check for a billion dollars is about as close as you're going to get, and Google has just announced it's writing one. In a blog post, CEO Sundar Pichai explained that in order to "build a more helpful Google," the company would be making this major investment in what it believes is the most important social issue in the area: housing.
San Francisco is famously among the most expensive places in the world to live now, and many residents of the city, or perhaps I should say former residents, have expressed a deep and bitter hatred for the tech industry they believe converted the area to a playground for the rich while leaving the poor and disadvantaged to fend for themselves.
Google itself has been the subject of many a protest, and no doubt it is aware that its reputation as a friendly and progressive company is in danger from this and numerous other issues, from AI ethics to advertising policies. To remedy this, and perhaps even partly as an act of conscience, Google has embarked on a billion-dollar charm offensive that will add thousands of new homes to the Bay Area over the next ten years.
$750 million of that comes in the form of repurposing its own commercial real estate for residential purposes. This will allow for 15,000 new homes "at all income levels," and while Pichai said that they hope this will help address the "chronic shortage of affordable housing options," the blog post did not specify how many of these new homes would actually be affordable, and where they might be.
Another $250 million will be invested to "provide incentives to enable developers to build at least 5,000 affordable housing units across the market".
They should build an arcology or giant pod hotel.
Also at NPR.
Previously: "It's a Perfect Storm": Homeless Spike in Rural California Linked to Silicon Valley
Silicon Valley Charter Buses Vandalized by Pellet/BB Guns or Rocks
Related: Soaring Rents in Portland, Oregon Cause Homelessness Crisis
City of San Francisco Says It's Illegal to Live in a Box
San Francisco Restaurants Can't Afford Waiters, so they Put Diners to Work
In San Francisco, Making a Living from Your Billionaire Neighbor's Trash
A Rogue Coder Turned a Parking Spot Into a Coworking Space
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @08:07PM
The surface streets are already fucked, and I doubt BART will make it to SJ downtown or the Airport in my lifetime.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @08:26PM (19 children)
This will make real estate even more expensive in the bay area*.
* If you pump billions of dollars earmarked for real estate into a small region what do you think will happen?
It is like everything these people do has the exact opposite effect as the stated goals.
(Score: 3, Interesting) by ikanreed on Tuesday November 05 2019, @08:43PM (15 children)
Much as I hate Apple as both a corporation and their technology, I'm forced to disagree.
Funneling money specifically into high density construction can abet lower overall housing prices by increasing supply. But it also: gentrifies, displaces, and temporarily raises prices locally, as that construction usually destroys homes. And often politics and profit motives can disfigure such projects to actually decrease density. A socialist youtuber engineer going by donoteat made a couple [youtube.com] videos [youtube.com] going into ways public housing projects have failed and succeeded in history.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @08:52PM (14 children)
They are artificially increasing the supply of money, which will pump up real estate prices. Anyone who wants to build will have to pay more for that property and then charge more for it to make a profit. This isn't hard to understand.
(Score: 3, Insightful) by ikanreed on Tuesday November 05 2019, @09:15PM (12 children)
While there are ways to mitigate that scenario, such as rent control and occupancy minimums, I want to quote your post adding an essential word you omitted that flips the math upside down.
In this world of grossly simplified supply-demand economics, you forgot something kind of critical. They're building with the money. It doesn't matter how steep the supply curve for land is if 100% of your investment is going into building homes at maximum density, there's literally no scenario where more homes get built without that intercession. No one else is going to buy that land at that price and build more. It's not possible. It's not hard to understand, but it's wrong when you omit a core variable like that.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @09:29PM (11 children)
Mitigate... Rent control, etc is what caused this problem. More of it is not going to mitigate anything.
You'll see, absent a housing crash real estate prices will go up in the Bay Area. If you don't think people will front run free money to pump real estate... No wonder this shit keeps happening. There is some type of common person who seems incapable of accurately predicting the consequences of their actions. I don't think it is stupidity, just some deeply ingrained false premise.
(Score: 2) by ikanreed on Tuesday November 05 2019, @09:33PM (7 children)
That's weird, your core point was totally and completely wrong on it's own merits, but I'm not hearing an admission of being wrong.
Instead I'm hearing more garbage stated with absolutely certainty.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @09:42PM (6 children)
My core point is not wrong, you just assumed it was wrong.
More money chasing real estate -> higher real estate prices. That is the core point, and it is what always happens. If they wanted more affordable housing they should get rid of the zoning laws that prevent it from being profitable to build. Very simple.
(Score: 2) by ikanreed on Tuesday November 05 2019, @09:46PM (1 child)
It was totally and completely wrong. Holy Shit.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @10:06PM
It was? Interesting because this hasn't happened yet so that would be impossible for you to know.
We will see who had the right assumptions once this construction is built. I predict the exact same thing that always happens like a law of nature will occur, and this will drive real estate upwards.
You have some elaborate theory as to why not, ok. Watch, real estate will continue rising there, not become more affordable... until there is a big crash.
(Score: 2) by hendrikboom on Tuesday November 05 2019, @11:28PM (3 children)
Provide money without increasing supply -> higher prices indeed, but
Increase supply -> lower prices.
(Score: 4, Insightful) by hendrikboom on Tuesday November 05 2019, @11:39PM (1 child)
But looking at the article, and the links from it, it appears that Apple is providing loans to promote housebuilding (loans that presumably will have to be paid back, so it's not really a subsidy) and also loans to help people buy houses (thereby increasing the money that's chasing houses).
If they were indeed to spend two billion dollars building houses, it would help.
But that is *not* what they are doing.
-- hendrik
(Score: 1) by khallow on Wednesday November 06 2019, @12:44PM
"Presumably". Why would the loans not be provided in the absence of Apple's efforts? That's where the subsidy is.
(Score: 0) by Anonymous Coward on Wednesday November 06 2019, @12:11AM
There is no increase in real estate supply.
(Score: 2) by c0lo on Wednesday November 06 2019, @12:38AM (2 children)
Are you sure they wouldn't go up anyway, even in the absence of new "human docking space" being build?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Wednesday November 06 2019, @02:26PM (1 child)
I am certain that they would continue rising without this new forcing.
(Score: 2) by c0lo on Wednesday November 06 2019, @08:36PM
Then raising house prices cannot be cited as a proof for the hypothesis of "money injection into new houses will increase house prices."
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by khallow on Wednesday November 06 2019, @12:42PM
In other words, they are naturally increasing the demand for land area. But with high density housing, there would be more real estate per unit area and hence, even if they "charge more", they can charge less per rental unit.
(Score: 2) by fliptop on Tuesday November 05 2019, @10:14PM (2 children)
Looks like Quinn's First Law [warroom.com], established in 1993, has been right along.
Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @11:11PM
Nice law. I wouldn't limit it to liberals though. War on terror/drugs/etc is the same.
(Score: 2) by c0lo on Wednesday November 06 2019, @12:44AM
I want back my 3 minutes of wasted time reading the linked.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 5, Insightful) by anotherblackhat on Tuesday November 05 2019, @08:39PM (2 children)
The fundamental problem is that people do not want housing prices to go down.
We saw this in 2007, when the housing bubble popped.
People didn't call that a "correction" or say "housing prices are almost back to normal" ... they called it a crash and took action to "correct" the "problem".
(Score: 2) by JoeMerchant on Tuesday November 05 2019, @09:01PM
And, "the system" backed them up on that through 2008. When we sold our home in 2013 we expected to "take a loss" from our 2006 purchase price, but... we had willing buyers bidding at our asking price, comparables around the neighborhood backing up that price, but the "impartial appraiser" managed to dig up three comps that knocked our appraisal down 10% from what the buyers were bidding. One of those comps was a year old, a friend of ours sold their home a year earlier and had the same situation: willing buyers but an appraiser who wouldn't extend the recent uptrends in the market to our neighborhood and so knocked their appraisal down 10% and our appraiser was using their sale price - depressed by their appraiser, as a comp for our appraisal a year later. The only mumbled comment I could get from the man was something to the effect of "the banks don't like it if I let these things get too high..."
🌻🌻 [google.com]
(Score: 3, Insightful) by darkfeline on Wednesday November 06 2019, @04:38AM
The people who own houses do not want housing prices to go down. The people who don't own houses want housing prices to go down, until they buy a house, after which they want the prices to go back up.
Join the SDF Public Access UNIX System today!
(Score: 1, Informative) by Anonymous Coward on Tuesday November 05 2019, @09:03PM
A problem caused by the tech giants finally Gets big enough to cause them pain.
https://www.vox.com/recode/2019/11/4/20948553/bernie-sanders-apple-housing-2-billion-plan [vox.com]
(Score: 4, Touché) by Gaaark on Tuesday November 05 2019, @10:49PM (2 children)
Apple pledges to pay its share of taxes.
--- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @10:55PM
Did you ever wonder if the warning in the Bible about apples was about this type of apple instead of the literal fruit?
(Score: 2) by c0lo on Wednesday November 06 2019, @01:51AM
There's no profit to be made from doing that, on the contrary.
However, offering "a $1 billion line of credit" sounds like a profitable business plan.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Tuesday November 05 2019, @11:23PM (1 child)
is anything under $100k.
(Score: 0) by Anonymous Coward on Wednesday November 06 2019, @01:03AM
Actually, it's $70,000
http://meetingthetwain.blogspot.com/2019/05/irvine-co-housing-development-in.html [blogspot.com]
(Score: 2, Insightful) by Anonymous Coward on Wednesday November 06 2019, @07:50AM
Branch out to other cities/states, tech companies or California residents...
There is a whole country outside your little navel.