Companies and philanthropists in the San Francisco Bay Area, including Facebook Inc. Chief Executive Mark Zuckerberg, said they plan to raise $500 million for affordable housing, weeks after California Gov. Gavin Newsom called on the private sector to do more to address the region’s critical shortage of homes.
The investment fund, which has raised $260 million so far, aims to help build at least 8,000 homes in five Bay Area counties within the next 10 years, according to its leaders. It also will work to preserve homes at risk of being redeveloped into more expensive properties.
The fund is part of a larger project led by Mr. Zuckerberg’s philanthropy arm with his wife, Priscilla Chan, called the Chan Zuckerberg Initiative; the San Francisco Foundation, a major community donor; and other philanthropy groups. They aim to coordinate solutions to the housing shortage. The fund’s early contributors include Morgan Stanley and biotech firm Genentech Inc.
The first budget proposed by Mr. Newsom, the state’s new Democratic governor, earmarks $500 million for middle-income housing. He has called on “corporate California” and Silicon Valley in particular to at least match the state’s contributions.
The San Francisco-area initiative follows a similar announcement last week in Seattle, where Microsoft Corp. pledged nearly $500 million to support affordable housing in the area, the company’s largest financial commitment to a single community issue.
The new fund will target housing in Silicon Valley and surrounding areas, where a population boom driven by highly paid tech workers has left housing prices out of reach for many lower-paid employees, including teachers, restaurant staff and nurses.
Since 2010, the region gained over 700,000 jobs but built just over 100,000 housing units, according to regional agencies. The area’s transportation commission projects 1.3 million new jobs and 820,000 new households by 2040. A recent study involving local governments projects the region needs to build 35,000 units a year to keep up with population growth.
Judith Bell, the San Francisco Foundation’s vice president of programs, said the initiative was born from “the unbelievable daily pressure that almost every resident here feels in the context of housing, particularly low-income families, and how much it is impacting employers in the tech, nonprofit, health and service sectors.”
She and other nonprofit leaders said the effort has been in the works for two years, but it has taken time to hold talks with local communities and identify housing needs.
Affordable housing has been a hot-button issue in tech hubs. Soaring home prices have led communities including Seattle and Silicon Valley towns to consider imposing a per-employee levy on big companies to raise funds. Such a tax passed in Seattle but it was later repealed. In Cupertino, Calif., where Apple Inc. has its headquarters, local lawmakers backed down from a similar tax after business opposition.
In San Francisco, Salesforce.com Inc. Chief Executive Marc Benioff backed a tax measure that won approval in November’s election to boost a gross-receipts tax on the city’s businesses to fund homelessness programs.
The new Bay Area fund involving Mr. Zuckerberg will offer flexible loans and other types of financing not usually available to affordable-housing developers and community groups, said executives from Local Initiatives Support Corporation, the nonprofit administering the fund.
A separate $40 million fund will give grants to cities and localities to get the resources and expertise they need to boost affordable-home building. That fund has raised $20 million so far, including $10 million from the Chan Zuckerberg Initiative and $1 million from Facebook.
Nonprofit and local government leaders said there was a long way to go in generating broad political support to build more housing, especially for lower-income residents, in communities traditionally resistant to neighborhood changes.
“Our housing crisis requires all hands on deck,” said California Assembly member David Chiu, who represents a district encompassing eastern San Francisco and leads the state assembly’s housing committee. “Everyone would agree that the success of our economy has exacerbated our housing crisis,” Mr. Chiu said.
Write to Nour Malas at [email protected]
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