We may have reached a turning point in American History. A major corporation has taken on a task which is typically reserved for the government to handle, to provide housing communities. In America, the government has provided or incentivized housing in a variety of ways over the years. From the early 1900s directly creating housing to the mid-century encouraging private investors to own the asset with subsidies from the government, to the end of the century low-income housing tax credit/tax-exempt bond structure.
As successful as the tax credit structure has been, the affordable housing crisis in America is still very real. The cost of living is growing faster than the average household income. The tech industry has been one of the beneficiaries of the new world. Many American cities were built on the market force of the industrial revolution. That economic engine is no longer a sustained source.
Enter Facebook, an American online social media and social media networking service company based in Menlo Park, California. The company was created just 15 years ago and is now one of the biggest and most powerful companies in the world. Facebook now has more than 2.2 billion users. It is important to note that large tech conglomerates have received mounting pressure from the federal government as to if they are becoming monopolies.
As we all know, it is hard to pursue aspirations without shelter. This has an impact on the greater community. The tech industry is putting its money behind an effort the government is currently struggling to deal with. The overall consensus is something has to be done. They have begun to work with faith-based organizations and community organizers to develop solutions. The goal is to reach a partnership which is inclusive of all shareholders. This will produce affordable housing, stabilize housing, and preserve existing affordable housing.
Facebook is banding together with other corporations a sum of $500 million to invest in affordable housing efforts in the Bay Area of California. This partnership titled ” Participate for Bay’s Future”, will include San Francisco Foundation, Ford Foundation, Genentech, and many others. They’ve raised $280 million to date. The fund will be managed by a nonprofit which will use public and private funds to finance development projects. The aim is to achieve 8,000 units of affordable housing in the next 5 to 10 years.
Slated to use the funds initially is the East Bay Asian Local Development Corp which will use the funds as a revolving line of credit toward 6 projects.
Tech companies are now taking an active role in addressing the income inequality and resulting housing crisis which has occurred as a result of their tremendous success. “I would say two or three years ago nobody (in tech) would say the word ‘housing,’” said Priscilla Chan, who co-founded the Chan Zuckerberg Initiative with her husband. “Nobody wanted to talk about it. It was just not our problem. Now, we’re in a moment where Microsoft is standing up and saying we want to contribute and Facebook and Genentech are part of this partnership. The amazing part is their capital but also their voices. They are important constituents of the Bay Area that have been driving a lot of the Bay Area economy and now wanting to be a part of the solution for a problem that is age-old.” The Chan Zuckerberg Initiative contributed $40 million toward this fund and $10 million toward grant funding.
