THE WALL STREET JOURNAL. **** Wednesday, October 23, 2019 |A
Parents who already
pleaded guilty don’t face the
new charges.
Prosecutors have struggled
to identify damages and vic-
tims in the case where some
parents paid mastermind Wil-
liam “Rick” Singer to secure
admission to elite schools by
cheating on admissions testsor falsely claiming kids were
recruited athletes. Cheating
on a college application itself
isn’t a crime.
The additional charges
“would provide the govern-
ment an alternate theory of
liability, which could be help-
ful in the event the honest-
services charges run into le-of the land on which that
housing will be built.
San Mateo County, where
Facebook’s headquarters is lo-
cated, added more than 13 jobs
for every new housing unit
created from 2010 throughFacebook Inc. said it is pro-
viding $1 billion to help ease a
shortage of affordable housing
in Silicon Valley, the third tech
giant this year to commit to
addressing the issue as the in-
dustry seeks to soften the im-
pact of its rapid growth.
The company estimates its
initiative would produce up to
20,000 new housing units dur-
ing the next decade, much of it
aimed at teachers, police and
other middle-class workers
near its headquarters in Menlo
Park, Calif.
This year, tech companies
have pledged record amounts
to address the need for afford-
able housing in West Coast
cities. In June, Alphabet Inc.’s
Google made a $1 billion com-
mitment to building housing
in the San Francisco Bay Area.
Microsoft Corp. said in Janu-
ary it would spend $500 mil-
lion on new housing in the Se-
attle area around its Redmond,
Wash., headquarters.
State and local regulations
that have limited new develop-
ment, combined with an influx
of highly paid technology
workers, have pushed up the
cost of housing in California
beyond what most middle-
class workers can afford. The
conditions have led Facebook
to cut back on its growth in
Menlo Park and San Francisco,
Mark Zuckerberg told employ-
ees earlier this month.
“At this point, we’re grow-
ing primarily outside of the
Bay Area,” he said. “The hous-
ing prices are way up. The
traffic is bad. There’s a lot
that we are trying to do to
help build more housing and
alleviate some of the traffic
constraints, but for the near
term it’s going to be building
BYLAURAKUSISTO
U.S. NEWS
up those other hubs.”
Housing advocates have
welcomed the commitments
by tech companies but say
they will barely make a dent in
the crisis, which is a growing
problem throughout the state.
California is short 3.4 million
housing units, according to a
study by consulting firm
ECONorthwest and Up for
Growth, an advocacy group for
loosening building regulations.
Facebook will distribute the
money through a variety of
channels, including local non-
profits and community devel-
opment financial institutions.
The company said the hous-
ing produced will serve a vari-
ety of income levels, from the
recently homeless to residents
who make too much to qualify
for traditional low-income
housing but still struggle to
afford Bay Area housing costs.
About $250 million of Face-
book’s donation will go to a
partnership between the com-
pany and the California gover-
nor’s office, which will provide
underused state-owned land to
developers at virtually no cost.
In turn, Facebook will subsi-
dize the construction of new
units. Facebook said its plan
should allow middle-income
housing to be built on these
properties without additional
public subsidy.
“We need others to join
Facebook in stepping up,” said
Gov. Gavin Newsom.
The perception that tech
companies are driving up
home prices and forcing out
middle-class families creates
challenges when the compa-
nies need local approval to
add more office space. Advo-
cates argue that allowing com-
panies to add more workers
will exacerbate displacement.
Facebook is seeking ap-
proval for a new complex that
includes office space for about
6,000 employees and roughly
1,700 mixed-income housing
units. The billion-dollar com-
mitment made by Facebook in-
cludes the $225 million valueTackles Lack
Of Housing
Tech giant earmarks
$1 billion to address
Silicon Valley’s
shortage of homes
2015, according to Up for
Growth. That is far from what
economists say is a healthy ra-
tio of one unit of housing for
every 1.5 to 2 jobs that are
created.
The growth of technology
companies is by no means
solely responsible for the
problem. State environmental
regulations and restrictive lo-
cal zoning have stymied devel-
opment throughout California.
Menka Sethi, Facebook’s direc-
tor of location strategy, said
the company will need to push
for looser building regulations
to have the impact it desires.
Facebook also will contrib-
ute $150 million to a fund that
builds housing for low-income
residents and the homeless
run by the Partnership for the
Bay’s Future.
The company will spend an
additional $25 million to build
housing for teachers and other
workers in San Mateo and
Santa Clara counties.
—Jeffrey Horwitz
contributed to this article.The influx of highly paid tech workers has contributed to an acute shortage of affordable homes in the San Francisco Bay Area.JOSH EDELSON/AGENCE FRANCE-PRESSE/GETTY IMAGESJob growth has vastly
outpaced housing stock
in the Bay Area.Jobs per housing unit for Bay
Area counties, 2010-Source: Up For Growth0 5 10 15Napa
San Mateo
Marin
San Francisco
Sonoma
Alameda
Solano
Santa Clara
California
Contra Costagal issues with judges or
potential juries,” said Greg
Brower, a former U.S. attor-
ney and shareholder at
Brownstein Hyatt Farber
Schreck LLP. “For some ju-
rors, it’s a much easier-to-un-
derstand statute.”
The honest-services fraud
statute, effectively an anticor-
ruption tool, makes it a crime
to cheat the government or a
private employer out of a
right to the “honest services”
of its public servants or em-
ployees.
The new charge would also
allow prosecutors to argue for
stiffer punishments. Sanc-
tions, based just on the hon-
est-services fraud charge,
have been lighter than the
government requested. The 10
parents sentenced under U.S.
District Judge Indira Talwani
have received punishments
ranging from probation to
five months in prison.
Prosecutors have been ea-
ger to winnow down the num-
ber of defendants who could
take the case to trial, keenly
aware of the challenges asso-
ciated with coordinating a
trial with more than a dozen
different defendants and re-
lated fact patterns.
Attorneys for Ms. Loughlin
and Mr. Giannulli didn’t im-
mediately respond to requests
for comment.BOSTON—Eleven parents
who prosecutors say were in-
volved in the nationwide col-
lege-admissions cheating
scheme are now facing addi-
tional charges, raising the pos-
sibility of more significant
prison time if any of them are
found guilty.
The parents, including ac-
tress Lori Loughlin and fashion
designer Mossimo Giannulli,
are now being charged with
trying to bribe college pro-
grams that receive federal
funds. They previously faced
just two charges related to
conspiracy to commit honest-
services fraud and money laun-
dering.
Two former college coaches,
as well as an athletic depart-
ment official from the Univer-
sity of Southern California,
were also charged with con-
spiracy to commit federal-pro-
gram bribery.
Nearly half of the 35 parents
caught up in Operation Varsity
Blues since March continue to
fight the case. Nineteen others
have pleaded guilty, including
four who admitted guilt on
Monday as the threat of the
new charge loomed. So far, 10
have been sentenced, with all
but one receiving at least some
prison time.
BYMELISSAKORN
ANDJENNIFERLEVITZ
College-Case Parents Face New Charges
Actress Lori Loughlin now faces an additional charge of federal-
program bribery conspiracy in the college-admissions cheating case.STEVEN SENNE/ASSOCIATED PRESSMarket for Homes
Stalled Last MonthThe housing market sput-
tered in September as a lack of
homes for sale and high prices
disrupted what was shaping up
as a rebound in the second half
of the year.
Sales of previously owned
U.S. homes fell 2.2% in Septem-
ber from the previous month to
a seasonally adjusted annual
rate of 5.38 million, the National
Association of Realtors said
Tuesday.Home sales rose for two
straight months in July and Au-
gust, offering hope that a year-
long slowdown in the market
was turning around.
Buying conditions had
turned more hospitable in re-
cent months, thanks to falling
mortgage rates, a growing se-
lection of homes for sale and
slowing home-price growth. But
the latter two factors have
quickly reversed course and
damped buyer enthusiasm.
“You can sit there and go,
‘Oh my god, look how low
mortgage rates are,’ ” said Tom
Lawler, founder of Lawler Eco-nomic and Housing Consulting.
“But then you go, ‘Look how
high home prices are.’ ”
The median sales price for
an existing home in September
was $272,100, up 5.9% from a
year earlier, the strongest pace
of appreciation since January- The supply of homes on
the market declined 2.7% from
a year ago, according to NAR.
“The housing market is in an
unbalanced situation” with high
prices and persistent low inven-
tory, said Lawrence Yun, the
trade group’s chief economist.
News Corp , owner of The
Wall Street Journal, also oper-
ates Realtor.com under license
from the National Association
of Realtors.
Mortgage rates have been
steadily dropping throughout
much of this year. The average
interest rate on a 30-year fixed-
rate mortgage at the end of
September was 3.64%, down
from about 4% six months ear-
lier, according to Freddie Mac.
The boost from lower mort-
gage rates may take months to
be felt in the housing market,
since it takes buyers a while to
find and then close on a home.
—Laura Kusisto
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