By Laura Kusisto
Facebook Inc. is extending a sizable olive branch to neighbors rankled by its plans to expand its campus and bring 6,500 new employees to the area, a move some locals fear will exacerbate a growing housing shortage.
The tech giant announced Friday it will spend about $20 million in Menlo Park and East Palo Alto, Calif., two cities that surround its campus, to create a fund to build new housing, support job-training programs and provide legal assistance to tenants in danger of eviction.
Some $18.5 million will go to a fund to build new housing, primarily targeted at low- and moderate-income families, with consultation from community groups.
Government officials and community groups in San Francisco and Silicon Valley have tried to engage tech behemoths in their backyards for help in solving the housing crunch. Costs have skyrocketed due to tight zoning restrictions that make it difficult to build and an influx of highly paid workers who are pushing out long-term residents with their ability and willingness to pay more to rent or buy.
Facebook's decision to begin funneling tens of millions of dollars to create housing in local communities underscores the growing pressure on these companies to help tackle housing affordability, an issue that also is beginning to make it difficult to recruit employees. Companies such as Google parent Alphabet Inc. and Apple Inc. are facing similar pressures.
While about 500,000 new jobs have been created since 2010, Silicon Valley built just 26% of the new homes it needed for lower-income households between 2007 and 2014, a shortfall of nearly 22,000 homes, according to local government statistics.
"We saw that we were growing and that we were putting pressure on the market. We wanted to make sure that there were opportunities for people to stay," said Elliot Schrage, vice president for public policy and communications at Facebook.
Facebook is planning to add 1.1 million square feet to its current office complex. In the coming years as part of another planned campus expansion, the company said it was planning to design 1,500 housing units, of which 15% would be set aside for low- and middle-income residents.
"Those numbers didn't add up for us," said Tameeka Bennett, executive director of Youth United for Community Action, a local nonprofit group.
The coalition of community groups that are participating in the fund have agreed not to sue Facebook over its campus expansion, company officials said, lifting a significant threat to the company's plans although groups not involved with the agreement could still sue.
"We had our attorneys ready and ramped. We were still filing all of our paperwork to be able to sue them should things take a turn for the worse, " Ms. Bennett said.
Ultimately she said the group was convinced of Facebook's sincere commitment to easing the problem. The company met with her group and others several times a week often for a couple of hours at a time.
"What we really wanted out of this was a partnership. Checkbook diplomacy hasn't worked for a long time," she said.
Solving an affordable-housing crisis doesn't lend itself to the kind of disruption that many technology companies favor. Mr. Schrage said Facebook is hoping to attract investment from other companies and philanthropic organizations to bolster its efforts and to address the 22,000-unit shortfall.
"I don't feel like we have a choice," he said. "All of these companies love being in Silicon Valley. All of them have experienced extraordinary growth in Silicon Valley. All recognize that it is becoming increasingly difficult to persuade talented people to move to the region."
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