Why Silicon Valley tech giants now invest fortunes in real estate business

Why Silicon Valley tech giants now invest fortunes in real estate business

The burgeoning Silicon Valley industry attracts more and more businesses and workers, but homelessness is creating a lot of tensions and making clear how the gap between rich and poor grows in the world's first economy Credit: Shutterstock

History professor Leon Sultan grew up in a
San Francisco that working-class families remember as their home. That place, for the most part, has disappeared.

The city is now the center of the thriving tech industry in the United States and
It records one of the highest housing costs in the entire country. Owning a home is increasingly difficult:
to the lack of houses joins the increase of the newly fortified fortunes.

Sultan currently lives in a one-bedroom apartment under a stabilized income scheme. He shares it with his wife, who also works in education, and his four-year-old son. When in a few weeks they move to a larger place, the cost of their rent will almost double.

"I was born here in 1978. Then, a family with two salaries could buy a house," he says. "Right now the only way to buy one, if you are a normal person, is to have some kind of help." "I feel fortunate not to have been expelled yet," he says.

"Unsustainable" situation

Sultan, and many others, attribute this housing crisis to
rise of technology companies from the area of ​​the Baha of San Francisco, which has created great inequalities in society.

The influx of workers and money to San Francisco created a real estate problemThe influx of workers and money to San Francisco created a real estate problem Credit: Shutterstock

The growing discomfort of the community is reflected in the requests for new taxes directed at technology companies. But also in small things, such as the position against the groups that transport workers to
Silicon Valley, where many of these companies have their headquarters.

For years, tech giants have responded without accepting their responsibility to those who criticize them, but they begin to see signs of change.

One of them is that in June, Google said it will allocate US $ 1 billion to
housing problem, the same amount that Facebook promised. Apple for its part raised the commitment by committing to dedicate US $ 2,500 million.

"We know that what is happening is unsustainable," said Tim Cook, Apple's CEO, in revealing his company's plans.

Those decisions followed a wave of small donations and company activities such as Cisco and Microsoft, which said they would invest $ 500 million in homes in their home state of Washington.

These commitments represent a "type of recognition by the technology industry that they are in part responsible for the housing affordability crisis," says Jeffrey Buchanan of Silicon Valley Rising.

An average rental in San Francisco is around 3200 dollars per monthAn average rental in San Francisco is around 3200 dollars a month Credit: Shutterstock

Buchanan has pressured tech giants on the subject for years. "I hope that there will be a change of mentality in the industry. The old way of doing things does not work."

Rising prices

As the technology industry has grown, housing and rental prices in the area of ​​the Baha have doubled in the last decade, becoming in many respects the highest in the United States.

Last month, the San Francisco Real Estate Agents Association said that the average price of a home in the city had reached $ 1.4 million. He
Average rent exceeds US $ 3200 per month, according to Moody's Analytics-Reis analysis firm.

Salaries in the area have also increased, but not as fast as housing costs. A family needs to earn US $ 126,800 a year to be able to rent a normal two-bedroom property in San Francisco without spending more than 30% of their income, the percentage they considered as a breakeven point.