High housing costs in Silicon Valley have at least one major tech company threatening to move elsewhere.
Facebook Vice President of Communications and Policy Officer Elliot Schrage told investors during the company’s annual shareholders meeting that Bay Area housing costs need to be addressed if tech firms, such as Facebook, want to remain in Silicon Valley, Realty Biz News reports.
“If we can’t solve the housing and transportation issues, Silicon Valley won’t be Silicon Valley,” Schrage said. “These companies, like ours, will expand elsewhere.”
It is not just tech companies considering leaving the Bay Area. Bay Area Council’s latest annual survey revealed that 46% of Bay Area residents surveyed want to move elsewhere, marking the highest percentage in the last three years, the San Francisco Business Times reports. Housing costs were listed as the top issue for the fourth straight year and 42% of respondents said the housing crisis was their top issue.
The survey also revealed that 52% of millennial respondents plan to leave the Bay Area.
Households need to make over $333K annually to afford a median-priced home in San Francisco, a recent report from the California Association of Realtors said. In Santa Clara County, households need to earn $284K to afford a $1.4M home.
As of May, San Francisco rents average about $3,500, according to Rent Jungle. In Menlo Park, where Facebook is based, rents average about $3,200. Average salaries at Facebook range from $55K to $185K, according to Indeed.
Facebook’s Schrage said one of the reasons Facebook expanded into San Francisco was to have a broader area for housing instead of just Silicon Valley. Some investors have expressed concerns related to Facebook’s ability to attract and retain employees due to San Francisco’s high housing costs, according to Realty Biz News. Facebook has been quickly expanding its presence in San Francisco, most recently leasing up the entire 750K SF Park Tower in May and leasing up all of 181 Fremont’s 436K SF office in 2017. The tech company leases or owns over 3M SF of Bay Area office. Its footprint could grow to over 6M SF in the years ahead with its West Campus expansion and other future developments.
Facebook CEO Mark Zuckerberg told investors that Facebook plans to devote a portion of the land it has purchased for offices to housing. At its proposed Willow Campus, Facebook plans to build 1,500 units of housing. The company has already spent $18M toward affordable and mixed-use housing in Silicon Valley, Schrage said during the meeting. It also has been working on ways to improve transportation around its Menlo Park campus, he said.
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