The housing affordability crisis is one of the toughest challenges for philanthropy. Why? Because the scope of the problem is so huge, with tens of millions Americans squeezed by high rents and mortgages, while the solutions are dauntingly complex. Even if more funders did operate in this space, the obstacles to progress are formidable. Building more affordable housing not only requires lots of capital, it can also require legislation in the face of developer resistance, re-zoning in the face of community opposition, and, broadly speaking, the ability of various stakeholders to work together to move the ball forward.
In recent years, the crowded and expensive Bay Area has been become ground zero of the housing affordability crisis. And so were intrigued to see Facebook step forward recently to address this issue with a $20 million grant. The scope of its effort is strikingly narrow. The money will go toward expanding affordable housing and protecting low-income residents from displacement in communities around its Menlo Park headquarters. But Facebook's give is still notable, offering a possible example of how the region's tech giants—which have been criticized for fueling the housing crisis—could be part of addressing this issue.
The new grant comes on top of Facebook’s prior $7.8 million affordable housing commitment to Menlo Park. A number of players are involved in the effort. The social media company is working with East Palo Alto and Menlo Park city governments and nonprofits like Youth United for Community Action, Faith in Action Bay Area, Community Legal Services, and Comité de Vecinos del Lado Oeste.
Interestingly, the bulk of this grant isn’t going into construction efforts and building new apartments. Instead, most of Facebook’s money, $18.5 million, will create a fund to research and plan solutions to the housing problem. Right now, Facebook has about 15,000 employees around the world, but the bulk are in Menlo Park, and more are coming. If all goes as planned, Facebook will add another 1.1 million square feet to its offices. Part of that plan is to also to build 1,500 new housing units, with 15 percent of those units designated for low and middle-income residents.
The question of how Menlo Park can both accommodate more housing for techies and ensure housing for lower income people is front and center in the community. It's worth remembering that it's not just engineers and marketing professionals who work at large tech companies; it's also janitors, food workers, and other low-income support people. Right now, these folks are suffering the most from Silicon Valley's housing crunch. Finding solutions that work for everyone over the long term is complex, and you can see why Facebook's give is focused on research and planning.
More immediately, some $250,000 is going to an on-the-ground nonprofit working to renovate and repair homes for low-income and vulnerable residents. To round out the rest of the grant money, Facebook committed $625,000 for science and tech job training to help locals find good-paying jobs in the region and $500,00 for legal support for people who are at risk of displacement.
Facebook officials have expressed interest in expanding the company’s regional impact, especially in the area of affordable housing. Even with this latest grant, though, Facebook's contributions are paltry compared to its $3.69 billion in profits last year.
There's also the question of how much Facebook's $20 million grant is designed to help the larger community versus solving the housing problem its own employees face using philanthropic dollars.
The lack of reasonable rents and mortgages around Facebook's headquarters limits the company’s ability to recruit new employees and places lots of stress on existing ones, many of whom now commute significant distances to work.
“I don’t feel like we have a choice,” said Elliot Schrage, vice president for public policy and communications at Facebook. “All of these companies love being in Silicon Valley. All of them have experienced extraordinary growth in Silicon Valley. All recognize that it is becoming increasingly difficult to persuade talented people to move to the region.”
Regardless of the exact mix of motives, this is an intriguing example of a tech company really focusing on the housing crisis in the Bay Area and collaborating with city government and low-income-focused nonprofits to explore solutions.
“We haven’t seen a tech tycoon and a low-income community come together in this way before,” said Tameeka Bennett, executive director of Youth United for Community Action who had to give up her East Palo Alto home due to rising mortgage payments. “And we’re hoping it can be a model for other communities like ours that are facing this same issue.”
The announcement of this locally focused investment comes on the heels of news that Facebook processed $6.79 million in Giving Tuesday donations and that COO Sheryl Sandberg personally gave over $107 million to charity through her Fidelity Charitable donor-advised fund. Meanwhile, the philanthropic giving of Mark Zuckerberg and Priscilla Chan is powering ahead, as we often report.