An Island of Silicon Valley Affordability Says Yes to More Housing

On Wednesday, California’s SB 50—the controversial housing bill that would “upzone” certain residential neighborhoods to compel higher-density construction—heads into its second committee hearing in Sacramento. It arrives with a boost of support from leaders in one Silicon Valley community that’s in the crosshairs of the state’s 3.5 million-unit housing shortage: East Palo Alto, a majority-minority, lower-income town wedged between more affluent, whiter residents.

At a city council meeting last week, East Palo Alto councilman and former mayor Ruben Abrica described the unequal pressures his city faces due to the economic forces of Silicon Valley, the Palo Alto Daily Post reported. “I’m supportive in saying that regionally, places like East Palo Alto can’t continue to carry the brunt of continuing to house the people who don’t have a lot of means,” he said. “There are some cities, and I’m not saying they’re doing it consciously, but there are plenty of cities around here that are very wealthy and they don’t want anyone else to come around.”

SB 50 now has hundreds of endorsements from realtors, affordable housing developers, social justice organizations, chambers of commerce, and municipal leaders up and down the state. But few other statements of support hit at the core of what the bill is about like Abrica’s, whose city exemplifies what’s at stake.  

For decades, East Palo Alto has been an island of lower-income households, mostly Latino and black, in an increasingly high-income area. “Once considered as solidly African American as Harlem, East Oakland or Hunters Point,” the San Francisco Chronicle wrote in 1996, the city’s population has shifted in recent decades as black families moved away in search of suburbia.

Those who stayed behind, and the Latino households that now predominate, are surrounded by a moat of opportunity. To the north and south, the campuses of Facebook and Google draw tens of thousands of tech workers every day. A few miles west, Stanford University trains the next generation of world business leaders. Amazon recently landed an office complex in town for another 1,700 workers.

But East Palo Alto’s residents haven’t directly benefited. While the median home price is nearly $1 million, median household income is only about $59,000—roughly one-third of that of Palo Alto, and about half of that of Menlo Park, its tech-center neighbors. The relative affordability of the city’s housing stock is attracting well-compensated new homebuyers, but longtime residents aren’t the ones filling those tech jobs. Income poor and property rich, East Palo Alto households have become targets for real estate investors and speculators, the agents of gentrification and displacement, theWashington Post reported in 2018.

“No one wanted any part of us when the crime was high here, and that’s what is also frustrating about all this new interest,” one homeowner, John Mahoni, told the Post. “I tell people only sell if you have to, that you have the character not to sell your soul to the devil. But for some people it’s just too much money not to.”

As of 2016, at least, East Palo Alto hadn’t experienced as much gentrification as might be expected, according to a case study by UC Berkeley and UCLA researchers. That is partly because the city has taken steps to protect existing residents and support affordable housing development, the report found, enacting zoning measures and density bonuses that compel affordable construction for Californians on the lower end of the income spectrum. And between 1990 and 2013 (the period that the research covers), the city actually opened its doors to additional low-income households, rather than pushing them out. “Controlled for size, the city provides more affordable housing than any other in Silicon Valley,” states a recent report by the Silicon Valley Community Foundation.

But the job explosion in surrounding areas means the housing squeeze is tightening, and other communities in Silicon Valley haven’t stepped up to meet demand. “Palo Alto and Menlo Park continue to resist building new housing to accommodate this growth, thus exacerbating the pressures on East Palo Alto’s [...] resources,” the SVCF study states.

Indeed, throughout the Bay Area, cities with higher shares of white residents have generally set lower targets for building new housing for low- and middle-income households, another UC Berkeley study found. Racial and economic segregation might not have been the explicit intent in every case, but that is increasingly the outcome of the Bay Area’s sky-high costs of living and the local laws that contribute to housing scarcity.

“Many people didn’t want ‘those people’ living near their country atmosphere,” Abrica said at the council hearing. “Racial and economic segregation has deep roots. That’s what housing has been, and it continues to be.”

Some whiter and more affluent communities, including Palo Alto, are taking strides to overhaul local zoning codes to unlock more affordable development. But that is because virtually all have fallen fall short of their original goals. Meanwhile, some prominent community members deflect, arguing that that the root of the problem isn’t housing, but jobs.

“The aggressive expansion of big business does not have any sensitivity to the need for a sustainable community,” Greg Schmid, a retired economist and former Palo Alto city councilman who has helped campaign to cut down on office space permits, told the L.A. Times this week. “We have too many jobs.”

SB 50 would allow the state to determine the logical course for growth. Cosponsored by state senators Scott Wiener and Nancy Skinner, the bill would preempt local zoning codes that currently exclude everything other than single-family homes, so that certain areas close to high-frequency transit, employment centers, and high-quality schools would be forced to allow higher-density residential construction. According to another report by UC Berkeley’s Urban Displacement Project, the legislation could multiply housing production in such areas by four, with more than 75 percent of the new construction in more affluent neighborhoods.

No wonder the bill has attracted national attention, much as its predecessor, SB 827, did last year. SB 827 failed in its first committee session. And though SB 50 has crossed that threshold, the proposal faces long odds at this week’s hearing, in a committee headed by a legislator who opposes the bill. In one major respect, the bill is a radical proposition—zoning codes historically fall under the authority of local governments. On the other hand, it is often the job of higher levels of government to level the playing field for American communities with unequal hands. If housing is opportunity, that is what SB 50 seeks to do.

Which is why it is so telling that leaders of East Palo Alto are in support of SB 50, joining Mayor Libby Schaaf of Oakland and Mayor Michael Tubbs of Stockton, two historically working-class, majority-minority cities. Also on board is Mayor Sam Liccardo of super-diverse San Jose, plus a long list of other endorsements. Around the Bay Area, high-profile opponents include a majority of San Francisco’s board of supervisors, the mayors of Palo Alto, Cupertino, and other well-heeled communities. Farther south, Mayor Eric Garcetti of Los Angeles has also voiced dissent.

The AIDS Healthcare Foundation, a nonprofit based in L.A. that has become a prominent opponent of pro-density measures throughout the state, has also forcefully expressed its views. Last weekend it sent out political mailers to Bay Area households comparing the proposal to “Negro removal,” echoing author James Baldwin’s famous 1963 dismissal of “urban renewal.”

Leaders around the region condemned the material. “SB50 is about tackling our housing crisis, plain and simple,” tweeted San Francisco Mayor London Breed, who has endorsed the bill. Breed is black, and grew up in historically black neighborhoods in San Francisco. “It has nothing to do with urban renewal, and suggesting it does is deeply offensive to communities like mine that are still living with the consequences.”