What a New Give for Housing Tells Us About the Future of Chan Zuckerberg Philanthropy

The poverty rate in East Palo Alto is three times that of the surrounding area.

Thanks to yet another bump up in Facebook's stock value, Mark Zuckerberg is now worth $56 billion, and that pile could get even bigger still. Because he and Priscilla Chan plan to give away nearly all that money, there's a good reason why we've been obsessed with the early moves of the Chan Zuckerberg Initiative. What's this operation going to be all about?

Well, one thing is clear: Even as CZI takes on lofty challenges like taming all disease by the end of this century, it's also going to work on the front lines of tough socioeconomic issues. That commitment hasn't yet come through so strongly in CZI's public profile, but it's core to Priscilla Chan's own background and interests. She's worked her entire adult life, even before she became a pediatrician, as a practitioner serving vulnerable populations. And now, with billions to give, she and Zuck are looking for ways to address the needs of these groups. 

New clues as to what this might look like emerged earlier this week, when CZI announced that it was moving into the daunting terrain of affordable housing. It will begin supporting the Community Legal Services in East Palo Alto (CLSEPA), an organization providing legal services to area residents affected by soaring housing costs, as well as the Terner Center for Housing Innovation at UC Berkeley, a research and policy outfit. 

“In the Bay Area, few challenges are greater than the need for affordable housing," said David Plouffe, Facebook’s president of policy and advocacy, in a Facebook post. "It’s an issue affecting many of the local schools we work with, where too many students and their families are struggling to stay in their homes and neighborhoods, and recruiting and retaining top teachers is a challenge." 

Plouffe noted that many people in the Bay Area were "experiencing displacement, where housing costs and conditions are forcing many residents to move." In the communities of East Palo Alto and Belle Haven, he said, half of the long-term residents have left over the past five years. Plouffe explained that what CLSEPA does is provide legal services to help residents stay in their homes. 

Over 90 percent of residents of East Palo Alto are Latino, African-American, and/or Pacific Islander, with many immigrants, and these people haven't shared in the soaring prosperity of Silicon Valley. Quite the contrary. They've struggled to hold on as housing prices have soared. East Palo Alto has a poverty rate three times higher than the rest of surrounding Mateo County. 

Priscilla Chan knows these problems well. Not long ago, she founded a primary school in East Palo Alto that serves vulnerable children with a model that gives attention to the broader socioeconomic challenges they and their families face. With this new initiative, CZI is supporting work that directly addresses those challenges—and possibly in controversial ways, since housing affordability gets at underlying equity issues of who holds power and property in society. Legal efforts to stop displacement can entail clashes with landlords, banks and mortgage servicers, and developers. Efforts to expand the supply of affordable housing, meanwhile, can mean conflicts with wealthy communities that want to keep such housing out. 

Is CZI going to find itself in the middle of some big fights down the line? It's quite possible, which could explain why Chan and Zuck hired a veteran political operative like David Plouffe to run their policy arm. 

We should add that housing is also very much on the agenda of Facebook as a company. As Inside Philanthropy previously reported, Facebook recently put up $20 million toward the goal of expanding affordable housing in the areas directly abutting its Menlo Park headquarters.  

Housing is a particularly fiendish issue in the once-sleepy California enclaves that have become the center of Silicon Valley. On the one hand, companies like Facebook and Google have generated untold wealth, but on the other, their massive growth and expansion has put immense upward pressure on housing prices and the general area's cost of living.

Mirroring many of the larger trends the United States now confronts, the results have been a boon for Facebook’s programmers and technologists and less so for the company’s janitors and food service workers.

While it's laudable that both Facebook and CZI are taking on the housing crisis, it's unclear just how much success philanthropy can have in this space—given the scale and complexity of the affordability problem. 

Even Facebook's sizeable recent gift in a narrow locale might not make much of a dent. “If you’re talking about developing new units that are affordable and keeping them affordable, there’s a price tag there that will be far more than $20 million to compensate for the affordable housing units that are lost,” Tom Angotti, a professor of urban affairs and planning at Hunter College, told Inside Philanthropy. “It’s not how much new affordable housing is created, it's 'how much are we losing today?'”

According to Angotti, market forces would invariably favor unaffordable housing, thus limiting even the best-faith efforts of altruistic tech titans like Zuckerberg. Today, a typical one-bedroom apartment in San Mateo County rents for roughly $2,200 a month.

“The problem is that private philanthropy won't go very far,” said Angotti. “I think the solution is to put a lid on land value increases. That means government action.”

The knotty policy issues at play here explain why CZI is also supporting the Terner Center for Housing Innovation at UC Berkeley. As Plouffe explained, CZI wants "to help fill research gaps and test new ideas to develop long-term solutions. The Terner Center is a national leader in creating strategies to help families live in sustainable and affordable homes and communities. Our gift will support their work to continue their strong research to help guide our region towards evidence-based solutions."

The pairing of CLSEPA and Terner in this new give by CZI is another hint of how it might operate going forward, looking to empower both front-line practitioners and policy wonks when it comes to tackling tough issues.