Housing official in Silicon Valley resigns because she can't afford to live there

Once Kate Downing and her husband Steve did the math, it was obvious that if they wanted to raise a family, staying in Palo Alto, California, was not an option. Although Steve, 33, works as a software engineer at a nearby Silicon Valley technology company and Kate, 31, is a product attorney at another tech firm, the cost of owning a home near their jobs has simply become too steep for them.

If they wanted to purchase their current house – which they rent with another couple for $6,200 a month total – it would cost $2.7m plus monthly mortgage and tax payments of $12,177, adding up to more than $146,000 a year.

Instead, the couple will soon relocate 45 miles south to Santa Cruz, a city by the beach where they can afford to purchase a home and eventually raise children.

The Downings’ housing struggle in the northern California region that is home to many of the world’s wealthiest tech companies carries a special irony due to Kate’s second job: up until this week, she served as a planning and transportation commissioner for Palo Alto – a position in which she pushed city officials to build more housing and pass pro-development policies that could help solve the growing affordability crisis.

Kate vented her frustrations about the dangerous housing shortage in Silicon Valley in a Wednesday post on Medium announcing her formal resignation from the Palo Alto planning and transportation commission.

The letter, which has spread on social media, sheds light on a harsh reality of the intensifying housing crunch that the California tech boom has greatly exacerbated in recent years. That is, home prices have skyrocketed so dramatically that even high-paid tech workers benefiting from the thriving local economy are choosing to relocate to cities where they can comfortably raise children without pouring a huge percent of their income into housing.

“If even people like me can’t remain in the heart of Silicon Valley, it tells you just how awful the situation is for everyone else,” Kate said in a phone interview. “It gives us an indication of how much suffering there is out there.”

In Palo Alto, she said she was particularly worried about teachers, first responders and service workers being priced out of the city – and the entire region.

The fight over housing in Palo Alto, which is about 40 miles south of San Francisco, mirrors policy debates across Silicon Valley, which is home to the headquarters of Apple, Google, Facebook and other smaller tech startups that have attracted significant wealth and new jobs.

The housing supply, however, has not matched the resulting demand, and officials and researchers have increasingly recognized the dire consequences for low-wage residents. Some studies have shown that roughly 70,000 low-income workers in Silicon Valley now commute more than 50 miles to get to their jobs.

Between 2000 and 2013, the region lost 50% of units defined as affordable while the number of low-income households jumped by 10%, according to one study. Tech firms have worsened inequality, and in the shadow of the biggest companies, the region has seen mass evictions, expanding homeless encampments, and mobile home parks threatened with closure.

Analysts are now predicting that the housing crisis is going to have a serious impact on higher paid tech workers, potentially encouraging a sizable exodus.

While many housing advocates have pressured tech firms to contribute significant funds to help mitigate the crisis, others have argued that the blame lies with cities that promote a “not-in-my-back-yard” mentality and have blocked the rapid housing development that the region now needs.

“I have repeatedly made recommendations to the council to expand the housing supply in Palo Alto so that together with our neighboring cities who are already adding housing, we can start to make a dent in the jobs-housing imbalance that causes housing prices throughout the Bay Area to spiral out of control,” Kate wrote in her resignation letter.

The Downings and other tech workers who have recently left Palo Alto said the only homes they could afford would require them to live in areas far from their offices, forcing them to embark on hellish commute.

“We create jobs here, and we benefit from those jobs, but we outsource the housing burden to communities who can least afford it,” Kate said. She argues that the city and neighboring municipalities should loosen restrictions on new development and push for more dense housing.

Palo Alto mayor Patrick Burt, who has clashed with Kate on the commission, said the city was working to slow job growth and increase the rate of housing development, but added, “We’re not going to have a full catch-up [in housing] with the amount of jobs we have here.”

Andy Isaacson, a 35-year-old software engineer and friend of the Downings, recently moved from Palo Alto to Omaha, Nebraska, where he and his wife could afford to raise their daughter and newborn twins.

“Between paying rent and finding childcare … it was just basically, completely not sustainable,” he said.

Joe Snider, a 31-year-old information technology analyst, left Palo Alto for Colorado and now works remotely for his company. He said he also supports fewer regulations and unrestricted housing development.

Snider and his partner are both from northern California and wanted to remain, but they ultimately decided that the idea of an hour-long commute was too daunting.

“The ideal situation would’ve been us staying in Palo Alto and seeing a long-term future there,” he said.

“If things changed,” he added, “we would honestly consider moving back.”

 
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Fri, 08/12/2016 - 14:22