26 March 2019
Facebook has pledged to fund affordable housing units near its campus in Menlo Park, California. Photo: Internet
Facebook has pledged to fund affordable housing units near its campus in Menlo Park, California. Photo: Internet

Facebook takes a leaf out of China book on affordable housing

In many mainland cities, one or two public housing buildings are usually found next to a premium office plaza, a five-star hotel or a luxury residential project, thanks to the adoption of a “tie-in” government housing policy a decade ago.

Similarly, the US social networking giant Facebook plans to build an affordable housing development along with a planned campus expansion at its new headquarters in Menlo Park, California.

Facebook has set up its huge campus in Menlo Park in 2011. It has proposed two new office buildings that would add roughly one million square feet to its existing campus.

However, the company has been accused of pushing up housing prices and exacerbating income inequality in the Bay Area, the center of a booming tech economy.

A medium-sized apartment in San Francisco costs as much as US$810,000, the highest in the United States, even higher than the average US$590,000 in New York.

In view of this situation, civic-minded individuals and groups have been pressuring Facebook to make substantial investments in affordable housing.

In order to win approval for its campus expansion plan, Facebook has pledged to invest US$8 million in building affordable-housing units near its campus.

Also, it plans to set up a US$1.5 million Housing Innovation Fund for near-term projects that will benefit the local community.

It will also put US$1 million into a Housing Preservation Fund that would identify and buy properties near its campus to protect at-risk populations.

Interestingly, these proposals reportedly came from Zuckerberg’s wife Priscilla Chan.

The plans might be added to the Chan Zuckerberg Initiative, a charity fund set up by the couple in December 2015.

The couple intends to expand the pilot program into California or even the entire country.

The Chinese government unveiled its “tie-in” government housing policy 10 years ago.

As part of the program, property developers who were awarded land rights are asked to provide of portion of area allotted for their commercial housing projects to public residential estates.

The government will take over the public housing units after their completion and rent or sell them to low-income families.

The policy has ensured a steady supply of new public housing units amid the fast expansion of urban areas.

It has also helped bridge the gap between low-income households and those who are better off by putting them in one community.

This enables low-income families to share in the community and social networking resources of higher-income groups.

However, the policy has also given rise to various issues.

The mix of affordable housing and posh office and residential buildings has made things a bit more complex for city planners.

Also, there are limited facilities available for residents of these public housing units, such as schools, hospitals and parks.

As a result, Beijing has adopted a more flexible approach. Builders are allowed to look for another site a few kilometers away from their developments to build public housing units, instead of just in downtown areas.

This article appeared in the Hong Kong Economic Journal on July 22.

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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