Bang in the middle of Silicon Valley’s infamous traffic jams, wedged between a shining Tesla and a BMW, it’s entirely possible to forget a section of the region’s homeless population that sleeps in not-so-expensive cars.
Here, the homeless aren’t necessarily unemployed drug addicts. They include university professors and restaurant chefs who cannot afford the region’s sky-high rents and have little option but to live in recreational vehicles parked by the side of a street or in vacant lots.
According to the US Bureau of Labor Statistics, the median annual salary for US workers between the ages of 25 and 54, is $47,164. But those who make eight times that amount in Palo Alto, a city in the heart of Silicon Valley and home to Stanford University, don’t consider themselves rich. Palo Alto residents earning $400,000 a year call themselves middle-class, according to a survey conducted by a local newspaper earlier this year. Residents said they’d be rich elsewhere in the US, but cannot afford a house in the San Francisco Bay Area, home to some of the world’s largest tech companies.
In the past, those who could not afford a regular home would buy a mobile home, a prefabricated home on wheels, built in a factory and towed to the spot where one wants to live. Silicon Valley is dotted with mobile home parks, where homeowners pay space rent for the area occupied. Large equity companies are now buying these mobile home parks and hiking space rents. Retirees living there are being priced out.
Little wonder, then, that only 15 per cent of the population is between 60 and 79, and a mere 4 per cent over 80, according to Silicon Valley Indicators, a website providing data on the region. Absurdly high property prices have a profound impact on the demographics of the Bay Area, a place where medical professionals and local government employees can’t afford a home. Teachers can’t afford to live in the school districts where they teach.
Ironically, 60 per cent of over 2,300 employees across 13 tech companies said they could not afford to buy a home in the region, according to a survey conducted last month by Team Blind, an app that allows tech workers to communicate anonymously.
A software engineer and an attorney moved out of Palo Alto because the couple could not afford a home. The attorney, Kate Downing, made public her resignation letter to the Palo Alto Planning and Transport Commission. She and her husband were sharing a house with another couple, with whom they split rent. She said that if they wanted to buy the house and “share it with children and not roommates,” the cost was beyond their means.
Families sharing homes with strangers to split rent is not uncommon in the area. Co-workers, often from the same nationality, rent homes together. Groups of young Indian men living together in an apartment is a routine feature of many complexes.
The influx of Indian engineers in Silicon Valley, known for decades as ‘brain drain’, has resulted in desi enclaves, dotted with Punjabi restaurants and South Indian groceries. The third largest number of foreign-born workers in the region is from India, accounting for 13 per cent of those born outside the US, according to estimates from Silicon Valley Indicators. The largest number are from Mexico, followed by China.
The diversity seen in the Indian and Chinese faces on Silicon Valley sidewalks is matched by the virtual absence of African-Americans, who account for a mere 2 per cent of the population and whose presence in tech companies is scant.
Indian and Chinese engineers in the United States owe their presence in the country to the battle fought by African-Americans against racially discriminatory laws during the civil rights movement half a century ago. This resulted in a new immigration policy in the 1960s, replacing the earlier, racially biased one. The new policy helped highly-qualified migrants from countries like India pursue the American dream in the San Francisco Bay Area.
Many African-Americans, though, live in one of Silicon Valley’s poorest regions, East Palo Alto, a city that borders Palo Alto, home to tech millionaires.
A detailed analysis of the history of East Palo Alto, published in the website TechCrunch, traces the first black settlers who moved to the Bay Area over 50 years ago from southern states where they suffered great violence. In California, they faced discrimination in sectors like housing. The first black man to buy a home in East Palo in the 1950s faced protests and petition s asking him to leave. When he refused to move, white families began leaving the area. Opportunistic real estate agents bought their homes at cheap rates and sold them at a profit to black families.
A poor, industrial area with high crime rates in the 1990s, East Palo Alto is in the midst of a gentrification process, with tech companies attracted to the city’s lower real estate prices. Poorer residents are now afraid they will be priced out.
While Bay Area homes are well beyond the common man’s reach, rich foreign investors are buying them and then renting them to families who can’t afford a home of their own. The San Francisco Bay Area is rapidly turning into a dormitory for Silicon Valley tech companies. The area is home to a large population of young people and families who cannot afford a house in the cities where they work, and may not see the point of laying down roots in the region.
An independent journalist based in the San Francisco Bay Area