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n a quiet residential neighbourhood
near Google’s headquarters, Francisca
Ramirez has finished the dishes and is
sweeping the kitchen floor while her
nine-year-old granddaughter naps.
A few doors away, William Adolfo Yac
has his tools out and the generator going,
readying to start some home repairs. His
neighbour Norma Ruiz is preparing to run
errands. Her ex-husband, who lives on the
same street even though the couple has
been separated a year now, will watch their
two children while she’s out.
These could be the scenes from any typ-
ical American suburb. Except that every
one of the residents in this neighbourhood
can’t afford rent in the area and is counted
as homeless. They have assembled a
makeshift community made up of row
upon row of recreational vehicles (RVs) –
small, dilapidated motorhomes and travel
trailers – along with parked cars and trucks
that line the main arteries running through
the heart of Silicon Valley.
The San Francisco Bay Area – a sprawling
region of 101 cities and nearly eight million
people – is the geographic centre of Silicon
Valley. It is an economic marvel and the en-
vy of communities the world over for its
ability to churn out a dizzying array of new
technology and a seemingly endless supply
of well-paying jobs. But that success has a
dark side: It has helped create a housing
shortage so severe that nearly everyone
agrees the region is in a crisis.
Silicon Valley rents have risen 50 per
cent since 2011, with studio apartments go-
ing for US$3,000. Home prices have dou-
bled. In Palo Alto, home to Stanford Univer-
sity and many of the region’s largest ven-
ture-capital firms, the median home price
topped US$2.8-million in July.
The people paying the heaviest price for
the housing crisis are the minimum-wage
service workers who cater to well-paid tech
employees by staffing restaurants, paint-
ing homes and caring for children. The es-
calating cost of living has pushed many of
those workers onto the streets. Homeless-
ness in Silicon Valley has surged 30 per cent
in the past two years to more than 30,
people, mainly because more people are
living in cars and recreational vehicles.
“It’s not a luxury to live in an RV like this,
it’s a necessity,” says Jose Reyes who lives
with his wife and two children in a motor
home with no water, lights or air condition-
ing on the edge of a city park in Mountain
View, Calif. “I can either go to work and pay
the rent, or I could live in an RV and get food
and clothes for my kids.”
Mr. Reyes has lived in Mountain View –
home to the sprawling campuses of Goo-
gle, Microsoft, LinkedIn and many other
tech firms – for 20 years. Two years ago, his
landlord renovated the building, raising
the rent from US$1,300 to US$3,000 a
month, more than he could afford busing
dishes at a local Italian restaurant.
Like Mr. Reyes, many of the more than
200 people living in RVs in Mountain View
are undocumented immigrants who say
that while they earn good money working
in the city’s shops, restaurants and hotels,
they can no longer afford even modest ac-
commodations.
The rise of RV living has put California in
an unwelcome national spotlight. U.S.
President Donald Trump frequently calls
out the state’s growing homeless popula-
tion as proof of the failure of the Democrat-
ic stategovernment’s policies. The White
House sent a group of officials to Los An-
geles this month to study the city’s home-
less crisis, ahead of the President’s planned
visit to the state next week.“What they’re
doing to our beautiful California is a dis-
grace to our country,” Mr. Trump told a rally
in Ohio in August. “It’s a shame. The world
is looking at it.”
Partisanship aside, Silicon Valley’s hous-
ing crisis is raising a vexing question for
state and localgovernments in California:
What happens when an economy is so suc-
cessful that it churns out thousands more
jobs than homes?
Business leaders worry that the housing
crisis will eventually imperil the region’s
innovation economy. State lawmakers
have pushed for an array of solutions – and
even Big Tech admits it needs to do more to
solve the housing shortage.
But those pro-housing forces are coming
up against a powerful “not-in-my-back-
yard” movement.
The dilemma is a cautionary tale for oth-
er cities that are chasing high-tech jobs, in-
cluding many in Canada, of the conse-
quences of not planning to manage such
economic growth.
“I would say it’s our number one con-
cern,” says Russell Hancock, chief execu-
tive of Joint Venture Silicon Valley, a non-
profit research group funded by local busi-
nesses andgovernments. “If Silicon Valleywere a Greek god, then housing would be
the Achilles heel.”
In the past decade, the region has creat-
ed eight new jobs for every home construc-
tion permit issued, says Matt Regan, senior
vice-president of public policy at the Bay
Area Council, a business association whose
members include most of Silicon Valley’s
largest tech companies. A healthy ratio is
1.5 jobs to one home. In some Bay Area
cites, the ratio is as high as 25:1.
The fear is that Silicon Valley’s shortage
will drive large tech firms to expand else-
where or even move their headquarters out
of the region. Many have already an-
nounced office expansions in cheaper lo-
cales such as Austin, Tex.
For now, however, they continue to
churn out most of their new jobs in the Bay
Area, with salaries to match the escalating
cost of living.
Those most affected by the housing
shortage have been middle-class and low-
income workers.
Silicon Valley saw a net loss of more than
23,000 people last year, driven mostly by
households making less than US$75,000.
Storefronts and restaurants are filled
with help-wanted signs, while local news-
papers report on teachers commuting
from two hours away.
“We’re losing the people that are the life-
support network of any society,” Mr. Regan
says. “They’re finding it very difficult to
hang on.”
Some of those who do remain have in-
creasingly turned to living in vehicles.
Francisca Ramirez moved to Mountain
View from Galveston, Tex., after Hurricane
Harvey hit the city in 2017, drawn by family
members who live in the city and ample job
opportunities.
She and her husband lived with her
brother for a while, crowding into an apart-
ment along with three of her brother’s
friends. (Many RV residents say they must
choose between sharing a room with
strangers in overcrowded rentals for as
much as US$1,000 a month, or living in an
RV.)
The couple eventually saved up
US$4,000 to rent their own apartment. But
landlords also wanted a US$3,000 security
deposit and the last month’s rent up front,
along with a credit check that requires a so-
cial security number, which many undocu-
mented workers don’t have. “My brother
said get an RV just like everyone else does,”
she said.
It was uncomfortable at first. The couplehave to ration water and power, travel to
dump their sewage and have paid count-
less parking tickets when they failed to
move their RV within the 72 hours that lo-
cal bylaws require.
But they’re getting used to it, she says.
And the opportunities to earn money
makes it worth it. Ms. Ramirez makes
US$15.65 an hour as a house painter, more
than twice what she earned in Galveston.
She understands local residents aren’t
happy that their streets are filled with RVs,
but doesn’t know what else to do. “I know
that the houses don’t want to see us here,”
she says, gesturing toward the residential
subdivision across the road from where she
is parked. “I wish there were places we
could go. We feel like nomads.”
Many here blame the tech industry for
engineering the region’s housing crisis, ar-
guing that companies have been allowed to
expand too quickly and create more jobs
than communities here can handle.
The lack of housing in Silicon Valley has
also pushed tech workers into the region’s
major cities of San Francisco and San Jose,
which have become bedroom communi-
ties to the jobs-rich suburbs.
California’s property-tax system has en-
couraged cities to compete for new tech of-
fice parks, even as they shun housing pro-
jects.
A 1970s-era ballot initiative known as
Proposition 13 limited the ability of cities to
increase property taxes, the majority of
which are ultimately siphoned off by other
levels of government. So they have turned
to development projects that bring in the
lucrative sales and businesses taxes that
fund a large share of city budgets.
By contrast, cities complain that new
housing developments are often a drain on
city budgets, with the cost of providing ser-
vices to new residents exceeding the addi-
tional property tax revenue. That has
helped spur a commercial property boom,
even as housing production has stagnated.
While the tech expansion has filled city
coffers – Silicon Valley cities posted a com-
bined surplus of US$751-million in 2017 – it
has also led to a growing resentment
among many long-time homeowners that
tech firms have reaped enormous profits,
while doing little to the solve the housing
crisis.
“I think there needs to be an enlighten-
ment, an awakening, by some of our busi-
nesses who are really benefitting from the
folks who ... live in an RV because they
can’t afford to live here,” Mountain View’s
vice-mayor Margaret Abe-Koga told a
council meeting in June during a discus-
sion about how handle the surge in RV resi-
dents. Local officials say they pressed Goo-
gle and other businesses to allow RVs to
park overnight in their office parking lots
without success.
Tech companies are starting to get the
message. A week after that council meet-
ing, Google announced it plans to invest
US$1-billion over the next decade to build
as many as 20,000 homes. Facebook foun-
der Mark Zuckerberg pledged to help raise
US$500-million through his personal char-
ity toward housing.
Google’s announcement came amid ne-
gotiations between the tech giant and the
City of San Jose over a planned new down-:Ae ̈{ ̈<A[ÓÝA¢eÓ ̈æÝÓenÝn/9¢î[nínÓb·AÏne¢! ̈æ¢ÝA¢9nîb
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SiliconValley’sRVcity:
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poorerresidentsareleftinlimbo
TheSanFranciscoBayAreamaybetheeconomicengineoftheUnitedStates,
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U.S.CORRESPONDENT
MOUNTAINVIEW,CALIF.