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Bay Area housing gets $500 million boost, with launch of region’s largest fund
Investment expected to build, preserve 8,000 homes
Bay Area power brokers fired a major shot in the fight against the housing shortage Thursday, as tech leaders, elected officials and philanthropists came together to launch what is poised to become the region’s largest investment fund for affordable housing.
With backing by the Chan Zuckerberg Initiative, the San Francisco Foundation, Facebook, Genentech and others, the new $500 million fund promises to build or preserve more than 8,000 homes in the five-county Bay Area over the next 5 to 10 years.
“I think it really has come to a point where we all need to get together and really think about that complex, comprehensive solution that we need in the Bay Area for everyone to thrive, especially the most vulnerable,” Priscilla Chan, co-founder of the Chan Zuckerberg Initiative, said from the stage of the Commonwealth Club in San Francisco.
Thursday’s announcement comes as Bay Area tech companies are facing mounting pressure to help ease the housing crisis. Gov. Gavin Newsom, who has made housing one of his top priorities, earlier this month urged California corporations to match the $500 million he intends to set aside for middle-income housing. The announcement also comes on the heels of Microsoft’s $500 million pledge for Seattle-area housing.
Each move is an attempt to ease the housing shortage driving up prices throughout the Bay Area and forcing low and middle-income workers to flee to cheaper communities, often hours away from their jobs.
Chan’s appearance, as part of a panel on housing solutions, kicked off the Partnership for the Bay’s Future — a group including Assemblymember David Chiu, San Jose Mayor Sam Liccardo, Kaiser Permanente, the San Francisco Foundation and the Chan Zuckerberg Initiative, the philanthropic organization Chan founded with her husband, Facebook CEO Mark Zuckerberg.
he partnership intends to invest $500 million in loans to build new affordable housing and preserve existing units. More than $260 million has been raised so far, including $40 million from the Chan Zuckerberg Initiative, $5 million from Genentech and $1 million from the Silicon Valley Community Foundation.
The money will fund projects in San Francisco, Santa Clara, San Mateo, Alameda and Contra Costa counties, for residents making up to 150 percent of the local area median income.
Its first investment will be a revolving line of credit to the East Bay Asian Local Development Corporation, which is expected to back six projects over the next five years.
In addition, the Partnership for the Bay’s Future is launching a separate fund of $40 million to help Bay Area cities and counties reshape their housing policies. That money may be used, among other things, to help local officials craft just cause eviction ordinances, rental assistance programs and other tenant protections, shape bonds to finance affordable housing, or remove the red tape around development by changing zoning laws.
Partners anticipate the $40 million fund will help protect up to 175,000 households from displacement over the next five years.
That second, smaller policy fund has raised almost $20 million so far — including another $10 million from the Chan Zuckerberg Initiative, $1.5 million from the San Francisco Foundation, $5 million from Genentech and $1 million from Facebook. The fund managers expect to open applications to Bay Area cities and counties during the first half of 2019, and make its first grant before the end of the year.
Forming a partnership that crosses county lines and spans multiple sectors is a milestone in and of itself, and one that took two years of discussions, those involved said Thursday. Many of the Bay Area’s 101 cities and nine counties have been striving to solve the housing crisis individually, but none have figured it out, said Chiu. A new, regional approach is needed.
“It’s my hope that this moment is an inflection point,” he said during a press conference following the Commonwealth Club event. “This is hopefully going to be the beginning of when we said we finally started to address the housing crisis.”
Mayor Liccardo, of San Jose, agreed.
“We aren’t going to solve it by just building housing in Oakland, San Francisco and San Jose,” he said.
When asked by an audience member how the Bay Area can get local tech companies to invest in housing, Chan and the other panelists on stage at the Commonwealth Club paused, and then broke into uncomfortable laughter.
After a moment, Chan said she’s seeing a lot of interest from tech companies wanting to get involved, which wasn’t the case two or three years ago, when the corporate world shunted the issue aside.
“I think we’re just cracking open the beginning of what’s possible,” she said, “once we can actually all sit down and be on the same side of the problem.”
Local affordable housing advocates applauded Thursday’s announcement.
“From my perspective, Bay Area tech companies have until now mostly been missing in action on putting their money where their mouth is and creating new affordable housing,” said Matt Schwartz, president and CEO of the California Housing Partnership, which consulted with the Chan Zuckerberg Initiative before Thursday’s launch, and has received funds from the organization in the past. “But having Facebook out in front, through Chan Zuckerberg, is a really exciting development and I hope that it will be seen as a challenge by the other tech companies.”