Tag Archives: Silicon Valley

Silicon Valley Bay Area, a Housing Affordability Crisis Engulfing Everyone

People living in their trailers in Silicon Valley (John Orr / Daily News)

San Francisco     I have housing market fatigue.  Everyone rich, poor, and in the middle have a housing prices horror story throughout northern California.  No one seems untouched from the impact of this crisis, and it dominates almost every conversation.

  • A friend told me she was visiting Birmingham for the first time to spent time with a 30-year long friend of hers who was a lifelong San Francisco resident who had moved to Alabama to be closer to her daughter after being priced out of the city.
  • A colleague told me his house was now appraised at $2 million, but his unit in the basement was being written up for ceilings that were under height and would cost hundreds of thousands to get to code.The solution turned out to have the specs designed and submitted to the city for a construction permit, and then to renew it every two years for lack of financing.
  • Another told me his unit was declared illegal by a disgruntled neighbor but after a notice was affixed to his door he called the city inspector in San Francisco and finally on the phone asked was there any way to “fix” this problem and was advised by the inspector that he could “deny entry,” so he did four years ago and that was that, indicating how much city employees empathize with longtime residents.
  • A school in San Jose buys up any house that comes up for sale around its borders for cash in order to provide housing for teachers. Another created a program to match down payments with that of teachers so they could buy.  Another was buying an apartment building with eight-units to house beginning teachers.
  • Someone else who had bought a condo in San Francisco told me of building meetings they were having regularly now to deal with fears that maintenance fees would force them out.
  • The neighboring cities of Santa Clara and San Jose sued each other over claims that large developments would create traffic and housing problems, and finally settled to allow them to move forward.
  • Apple ditched plans for a huge expansion and consolidation of its office space near its new Steve Jobs designed spaceship location because they didn’t believe their workers could find housing, and instead were adding over a million  into a seven building campus in Austin, Texas, likely moving the housing crisis there, hundreds of workers are filing transfer papers.

This is just the tip of the iceberg, and doesn’t touch what’s happening to lower income and working families.  Home ownership is an impossible dream. Affordable rents and shorter commutes are much the same.

This isn’t sustainable, and no one seems to have a solution.

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Rich Gone Wild!

Asuncion, Paraguay   Be still my heart!  It is probably a distant dream, but is it just possible that that the philanthropic tax dodges of massive tax evasion and, even more abhorrent, the impunity of the rich and their patronizing rationale that they know better and are “solving our problems” is finally being called to account?  Probably not, but at least there are chinks in the vaults of their treasure chests.

Recently there was some erosion near the moat around the rich’s castles when the New York Times took at least a glancing look at how “donor advised funds” or DAFs have become the go-to giant tax dodges for the new superrich of Silicon Valley when they cash in on their startups.  They honed in on the scandals involving the Silicon Valley Community Foundation where top executives have been forced to resign based on charges of bullying staff and overly aggressive development practices, but those are just pebbles falling down the mountain of real problems with the lack of transparency, accountability, and of course loss of tax revenue from these cash dumps.  The donors get a deduction for years, but since it’s a donor-advised-fund, they also get to call the shots on their money and contributions, as if it is still in fact theirs, rather than controlled by tax-exempt entity.

Once aggregated, no one can track the actual expenditures from these hoards or whether there are any expenditures at all, since the individual funds do not have the same requirements for annual outlays that the foundation itself has.  Drummond Pike, the founder and former CEO of the Tides family of philanthropic enterprises, wrote a scathing opinion piece in the Chronicle of Philanthropy on the corporate hijacking of DAFs that will soon be reprinted in the coming issue of Social Policy as well.

There’s more though.  Elizabeth Kolbert, the Pulitzer Prize winning journalist of The New Yorker, published a recent essay that was tellingly not simply a criticism of one method of the donor community’s tax avoidance, but of the warped nature of philanthropy and the “new” Gospel of Wealth and pomposity that has been bred in our “new” Gilded Age.   She correctly nails the self-serving and destructive nature of the philanthropic circle where billions of taxes are avoided because they claim to “know better,” starving the government’s ability to provide services more equitably, and forcing government itself to depend more on nongovernmental actors among the rich tax avoiders to supplement the shortfalls.

Simply put, even if the rich actually do donate their money, it’s a bad trade to rely on the unaccountable whims and priorities of the rich, rather than those we elect to govern for all of the people.  There’s also reasonable cause to doubt that there is anything other than their self-interest involved.  Kolbert’s piece includes an estimate of $10 billion in tax deductible contributions to impact public policy as an example.  The charade that these contributions are not political is also exposed clearly, including by many people that have supped at their table and ridden in their limos.

Perhaps it is too much to hope that the current Congress will fix this problem since their legacy is more tax breaks for the rich, but we can still hope that change is coming and the deluge is still possible.

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