Tech giants such as Facebook, Apple, Google, and Microsoft have committed billions of dollars to help combat the housing affordability crisis in recent months. However, some critics have suggested that these companies are in fact one of the primary contributing causes behind that issue within the markets—especially on the West Coast—where they have a large footprint. New commentary from the the Salt Lake Tribune [1] pushes back on that assertion.
“The spiraling housing costs in West Coast tech hubs are the result of 40 years of tax and land use policy—a period that mirrored the explosive growth of the tax-averse tech industry. This was also a time of continued activism by homeowners against higher-density zoning,” the Tribune piece states. “Together, this has severely limited housing construction, particularly lower-cost houses and apartments. It is a chronic condition, inflamed by the current tech boom.”
Apple’s $2.5 billion plan [2] announced last month was broken down in the following categories:
- $1 billion in an affordable housing investment fund
- $1 billion in first-time homebuyer, mortgage assistance fund
- $300 million in Apple-owned and available land in San Jose for affordable housing
- $150 million Bay Area housing fund
- $50 million to support vulnerable populations
The report says California was forever changed by the passing of Proposition 13 in 1978, which cut property taxes.
“There has been a huge shift in the tax burden to young families from older homeowners and owners of businesses,” said the Los Angeles times in 1988, according to the Tribune. “Cash-hungry cities opted to zone for commercial uses, which would generate sales taxes, instead of affordable housing. When houses got built, steep ‘impact fees’ drove builders toward more expensive homes, whose buyers could absorb the costs.”
Proposition 13 has also meant that city government has few fiscal incentives to encourage private companies to build more housing.
Voters in San Francisco [3] approved a record $600 million affordable housing bond. Proposition A gathered 69.5% of voter support, according to the San Francisco Chronicle.
“This is something that almost every San Franciscan wanted us to address,” said Board of Supervisors President Norman Yee to the San Francisco Chronicle. “I’m thrilled that the message we sent out to the voters about the importance of this is being supported.”