We believe we haven't heard the last of big technology's sudden vigorous embrace of housing and arguably its biggest challenge of the moment, affordability. Two major players--Microsoft and Facebook [through the Chan Zuckerberg Initiative] have clocked in with seismically meaningful initiatives aimed at addressing affordability gaps in Seattle and the Bay Area.
The jury's still out on Google parent Alphabet, as well as Amazon, and Apple--each of which have caught floods of attention around where they're choosing to locate and operate these days.
- Once others do ante up--and they will, seeing Microsoft's and Facebook's $1 billion, and doubling it, or even potentially, taking the investment to a 5 or 10x level--housing's historical inflows of capital will take an interesting turn.
- New private-public partnership models will emerge
- Mixed-income, market rate and affordable low-income, housing projects will proliferate
- Essential worker housing--what we mostly refer to as workforce housing--will be regarded as a nonnegotiable must-have in infill and urban inner ring redevelopment
- Market rate single-family builders may find new small-tract infill opportunities with better deals on land, approval times, and fees, thanks to new macro initiatives.
Strategically, there's a lot to gain from aligning capital investment to stanch a vast and widening gap between attainable housing options and the headquarters and operating hubs of America's technology juggernauts.
As well, failing to do so could put the future-proof plans of our crop of current tech giants to wield power to access ever-accelerating growth into the next decade and beyond at risk.
On one hand, the anchors, hubs, and corporate magnets of their companies confer on those geographies a super-charged hot-market status. This force draws in higher-educated, higher-paid, higher-potential people in individuals and pairs. That influx of high-potential earners sets in motion the displacement of long-time lower-income residents, and the eventual pricing out of all but the few who can pay top dollar for access to limited housing options.
Scarcity of available for-sale and for-rent inventory distorts normal supply and demand levels, and packs pricing power behind every available unit.
Which is all fine for tech companies for a while, mostly because their talent base can enter the dance floor.
It's not a secret that that dynamic is not so good for many others who are either forced out or priced out of a bigger and bigger surrounding circumference, and this not only includes the working poor who can no longer cling to their neighborhoods, but a city's essential workforce of firefighters, teachers, police force members, sanitation crews, and other rescue squads and municipal operations workers.
Add to that, a new, mighty intense risk that has cropped up for technology's big 5--Alphabet, Amazon, Apple, Facebook, and Microsoft.
Curbed's Patrick Sisson--who asks "Can corporate money and altruism fix affordable housing?" here--writes about it in light of the chop-chop announcements of $1 billion in investment initiatives spearheaded by Microsoft and Facebook.
This new activity in the Bay Area and Seattle shows corporations taking a more visible role at a time when affordability is becoming a more pressing political issue, and the role of the tech industry in accelerating housing costs has come under the microscope.
And, of course, we know that "the role of the tech industry in accelerating housing costs" is not the only reason the tech giants are in both politcos' and popular opinions' crosshairs of scrutiny.
This little matter of trust has come up. It's an existential matter for a handful of companies who, a year or two ago, felt as if they'd cut loose the force of gravity itself.
None of the tech giants is immune to the risks that go with lately having found themselves out of step with the trust they may have earned thanks to transformative values and benefits their products, services, and experiences provide. That trust is in question now, almost across the board.
What they earned took years, and care, and focus. What they could lose--of that earned trust--in a relative flash--could be everything, and so they find themselves in the position to need to see to every part of the social fabric they engage with, and ensure people their promises, and their capacity to protect people's privacy are as high a priority as stakeholders' interests in profits and growth.
This week, tech company stocks get the third degree from investors on Wall Street, who'll look at Q4 and full-year 2018 earnings for clues as to whether the tech sector can continue to serve as engine and bellwether for renewed investment growth expectations.
What better way than housing and community development for these companies to "live" rather than simply to claim their best of intentions when it comes to sustainably and regeneratively building trust with customers, with stakeholders, with associates, and with politicians and regulators?
And you know what?
These companies may be good at a lot of things, and they may be great at leveraging data and machine learning and robotics and even artificial intelligence to bring their products and services to market.
What they don't know, and what they're not good at, and what, very likely, they'll never be as great as you are at is real estate, local policy, dirt, the particular human relationship chain that makes home building, community development, and the creation of new, sustainable neighborhoods make sense.
They need you for that.
Start talking to them.