The first time Tameeka Bennett had to drive two hours in traffic to get to her job in East Palo Alto, she broke down in tears in her car. It was October 2014, and Bennett, 29, had never imagined she would have to move away from the Silicon Valley city where she grew up, which is one of the least affluent communities in the region.
But her family had lost their home to foreclosure, and they couldn’t find an affordable house to buy in East Palo Alto. So they were forced to move to Oakland, which is 40 miles north and a nightmarish commute away from Bennett’s job as executive director of Youth United for Community Action, an East Palo Alto not-for-profit group that fights displacement.
While Bennett recognizes that there are multiple factors driving the region’s housing crisis, it’s hard for her to ignore the most obvious force less than three miles north of her organization: the Facebook headquarters.
This week, Bennett and other northern California advocates are pressuring Facebook to make substantial investments in affordable housing as the powerful social networking company pushes forward with a major expansion that experts say will drive up housing prices and exacerbate income inequality in the center of the booming tech economy.
The brewing dispute over Facebook’s expansion in Menlo Park – which is adjacent to East Palo Alto and not far from the headquarters of Apple and Google – has exposed what many critics of the industry see as a glaring contradiction in the tech sector. That is, these hugely profitable companies cast themselves as do-gooder innovators creating transformative technology, but in their own backyard, they’re contributing to a crisis that has grave consequences for disadvantaged communities – and they’re doing little to “disrupt” the poverty plaguing their neighbors.
Menlo Park officials and residents debated Facebook’s growth plans during a lengthy city council meeting that dragged on past midnight on Tuesday evening. The public discussion came one day after reports that founder Mark Zuckerberg and his wife, Priscilla Chan, are exploring ways that their new philanthropic organization could help alleviate the high cost of housing in the region.
Facebook – which set up its huge campus in Menlo Park in 2011 – has proposed two new office buildings that would add roughly 126,000 sq ft to its campus, along with a 200-room hotel. The project is expected to bring more than 6,500 new employees to Facebook and the hotel, which would increase the entire Menlo Park workforce by more than 20%.
As part of the expansion, Facebook is required to contribute $6.3m to below-market-rate housing.
The company further agreed to provide $350,000 for a “study” of housing conditions; $1.5m for a “housing innovation fund” for various initiatives; $1m for for a “preservation fund” to buy and protect units housing “at-risk populations”; and $2.15m for reduced rents in 22 units of “workforce housing”, with priority given to teachers.
But critics say those are relatively inconsequential benefits given the size of the project and scale and urgency of the housing crisis – and considering that Facebook is now worth about $350bn, making it the sixth-most valuable company in the US.
Research has repeatedly suggested that Silicon Valley tech firms have worsened inequality, and data shows the area has lost affordable units at alarming rates. Recently, there have been numerous mass evictions and threats of widespread displacement near tech corporations.
With a surge in tech jobs at Facebook, the project will probably attract tens of thousands of additional workers in lower-paying jobs that support the industry, said Sam Tepperman-Gelfant, senior staff attorney at Public Advocates, a not-for-profit group that has, along with the ACLU, raised formal objections to Facebook’s project.
It is those workers and other poorer residents who will suffer the most from a jump in the regional housing demand, he said, pointing out that roughly 70,000 low-income workers in Silicon Valley already commute more than 50 miles to their jobs, which also has environmental consequences.
“It’s fundamentally not fair to ask low-wage workers in Silicon Valley to be bearing the personal costs for global corporate production,” he said. “Facebook could have a substantial role in correcting those deficiencies.”
In East Palo Alto, officials have also gathered compelling evidence suggesting that Facebook’s presence has had tangible consequences for low-income renters.
From 2011 to 2015, the average asking rent for a one-bedroom apartment in East Palo Alto increased by 89%, according to records.
One property owner acquired roughly 40% of the city’s entire rental housing stock in December 2011 after Facebook moved to Menlo Park – and the new landlord subsequently issued a significant number of eviction notices, officials have noted in city records.
That real estate company has specifically advertised new housing to Facebook workers, writing on its website: “Now is the time to consider affordable East Palo Alto apartments … before the rest of the Facebook and Google employees do!”
In a recent letter criticizing Facebook’s project, East Palo Alto’s mayor, Donna Rutherford, included that quote and pointed to research showing that in 67% of all recent house sales and rental units in East Palo Alto, the marketing materials have mentioned Facebook.
“It’s not that we’re against Facebook, but we want to make sure that when the expansion happens, it benefits not only a group of people, but the wider community,” said Carlos Martinez, East Palo Alto city manager.
Caprice Powell, 24, who grew up in East Palo Alto, said she is moving to Atlanta, Georgia, this summer in part because she can’t afford to rent here any more.
“Facebook is coming in and bringing along all these rich folks … They’re able to afford our housing, because it’s nothing to them.”
Powell said her sister and mother had both been priced out of East Palo Alto and that she was temporarily living in a small room in her godfather’s house – one of five people crammed into a two-bedroom. After she relocates to Georgia, she hopes to eventually return to East Palo Alto, but she’s not confident it will be financially feasible.
“It feels like East Palo Alto is not our home any more,” she said.
Bennett, who said she knew at least five local families who had been pushed out, also pointed out that Facebook had offered its employees generous bonuses to live closer to campus, which has accelerated gentrification.
“You are directly displacing families,” she said, adding that Facebook should look beyond its impact on Menlo Park and commit to funding housing in surrounding cities.
One resident at the council hearing also pointed out that black employees account for only 3% of Facebook’s senior leadership in the US, but others praised the company for bringing jobs and supporting local not-for-profit groups.
Facebook declined an interview request, but said in a statement: “We understand that our growth affects the everyday lives of our neighbors, and we want to be respectful and thoughtful about how we approach our expansion. The future of Menlo Park is extremely important to us, which is why we work with city and community leaders to tackle local priorities, including transportation, housing and the environment.”
The statement did not mention East Palo Alto.
At the council meeting, John Tenanes, Facebook’s vice-president of global facilities and real estate, did not address criticisms over housing, but said: “You have my commitment that Facebook will continue to be very active above and beyond what we’ve negotiated.”
A spokesman for the Chan Zuckerberg Initiative declined to comment on the rumors about potential housing initiatives, saying in a statement: “We are in the process of examining a number of potential issue areas for future work.”