This story is part of a multi-newsroom investigative project involving Reveal from The Center for Investigative Reporting, The Mercury News, KQED and Telemundo 48 Área de la Bahía.
Stanford University, Apple, Google, Cisco, Intel and several real estate companies are among Silicon Valley’s top property owners according to an analysis of Santa Clara County assessor records for 2018.
In all, the top ten entities own nearly $59.2 billion ($59,153,247,282) worth of taxable property, both secured and unsecured, between them.
That analysis is the result of a year-long project from a team of reporters from NBC Bay Area, Telemundo 48/Area de la Bahia, The San Jose Mercury News, KQED and REVEAL from The Center for Investigative Reporting which examined in depth roughly 500,000 property records on file at Santa Clara County’s Property Assessor’s Office.
According to the 2018 Assessor’s property records there were 500,593 secured parcels and 149,863 unsecured parcels with a taxable value of $519,180,026,350.
Talking about the taxable value of all this property, Santa Clara Property Assessor Larry Stone, in office since 1994, says “it's gone from a modest $15 billion to $516 ($519) billion in 24 years. Now, I would guess that the market value of all of that property would probably be a trillion and a half dollars.”
The top ten landowners are led by an organization that first began purchasing land here in the 1880’s, the descendants of Leland Stanford and his namesake legacy, Stanford University.
According to the team’s analysis of the publicly available property records, Stanford owns more in property value than organizations listed from No. 5 through No. 10 combined. Stanford’s property value: at least $19.7 billion ($19,749,955,770).
The next two major property owners are relatively recent to Silicon Valley: Apple, Inc., founded in 1976 with property valued at nearly $9 billion ($8,969,175,980) and Google, Inc, founded in 1998, with property valued at $7.5 billion ($7,504,656,526).
A BOOM WITH A DOWNSIDE
Further analysis shows that like Apple and Google, much of this land ownership has taken place relatively recently, including during the second wave of the tech boom following the 2008 recession.
While the growth of the gig economy has meant many tech workers have become rich and employment has exceeded just about every other community in the country, the team’s investigation found all this wealth leaves behind thousands of working class residents who don’t work in high tech or make similar high salaries.
To see the recent boom in job growth in the tech sector compared to a similar rise in median home prices and rent, pricing out middle class and low-income wage earners, look at the charts below taken from data available on Zillow and California’s Employment Development Department (EDD).
Included among the residents left behind are folks like Felix Diaz, his wife, Mariel and their two children.
“It's hard to live in this economy,” Diaz told NBC Bay Area.
A janitor at NASA Ames, Diaz and his family had to fight to stay in the apartment they’ve rented for eleven years after the complex was sold. Diaz told NBC Bay Area that the new owners, who he’s never met, tried to raise the rent and prompted some of their long-time neighbors to leave.
“After three or four months (of ownership) they started doing things like try and, like, evict us,” Diaz said. “We knew the previous owner because he was always here.”
Because Diaz asserted his rights as a renter under local rent control protections he and his family were able to stay in the apartments while other residents, he said, simply moved out rather than fight.
Back when he knew the apartment complex’s old owners, Diaz felt he could talk to them about issues and problems and felt secure staying put in his apartment for a long time.
That’s why Diaz now wants to know exactly who owns and controls the apartments where he lives.
“It made us frustrated,” Diaz said.
Using this recent property data, the reporting team found that the new owners of Diaz’s apartment complex include four different entities including a real estate attorney and an LLC making it difficult for him or any resident to go to any one person in case of problems like he did in the past.
NBC Bay Area reached out to the management company that oversees the apartments on behalf of the current owners and asked about the eviction warnings sent to tenants.
An executive at Prodesse Property Group responded in an email stating “since we began managing the property we have had to commence one unlawful detainer action, which resulted in the eviction of one resident for non-payment of rent.”
“We are currently in the process of a second unlawful detainer action, also for non-payment of rent which again is clearly an identified cause to terminate a tenancy under San Jose’s just cause eviction law. If a resident does not pay rent, unfortunately our recourse is to commence the unlawful detainer process, which may then result in the eviction of the resident. We don’t take this step lightly. We follow the laws in place and only commence such actions against a resident when absolutely necessary.”
THE GAP WIDENS
San Jose Mayor Sam Liccardo says he recognizes how these huge landowners and the incredible amount of income and property they control as well as the thousands of new jobs they’ve brought to Silicon Valley, while a good thing for the overall economy, also has created a growing chasm between the haves and have-nots.
“It really has become a tale of two valleys,” said Mayor Liccardo. “And we know that for all the prosperity we've seen in this region, it's the envy of the rest of the country. (But) we have thousands and thousands of families who are struggling and falling further behind and being pushed out. And so, we're really at a crossroads in our valley.”
“There's no question that this is all of our problem,” Liccardo said. “And it's all of our responsibility to tackle this affordable housing crisis. The reality is it (the gap between haves and have-nots) has only gotten worse. The problem is, over the last six to seven years, we've seen job growth exceed housing production by a ratio of six to one. And that’s a recipe for disaster.”
Mayor Liccardo and Assessor Stone blame both elected municipal leaders as well as the major companies that have created all these jobs without creating an equal amount of housing to keep up with the job growth.
“I don’t think any major tech company is doing enough to have to deal with the impact they're having on traffic and housing,” Stone said. “I mean, you can see it there (outside.) We’re overrun with traffic. Housing prices are out of control. Even rent prices are out of control. So obviously, the tech companies are not doing enough to mitigate traffic and housing costs impact.”
Former Mountain View Mayor Lenny Siegel places even more blame on local political leaders whom, he says, didn’t require big tech to pay to help provide for more housing and infrastructure when they first came to town.
“Housing development is not keeping up with employment growth,” Siegel said. “Some of the communities around here have a sense of exclusivity. They don't want to have the lower income people living there.”
Siegel says these political decisions made by city councils had an economic basis too.
“Historically it's been cheaper to serve industry than to serve residents,” former mayor Siegel said. “So, industry generates taxes and doesn't demand a lot of police schools that taxpayers have to pay for.”
The result has been that many municipalities have seen the economic benefit of companies moving to town while neighboring cities, primarily San Jose, have had to absorb the population crunch that comes along with the economic boom.
“So, the cities in northern Santa Clara County in particular, historically have emphasized job growth and not residential growth. San Jose was our bedroom community for a long time. It still is,” Siegel said.
But, Siegel says, some cities such as Mountain View and Palo Alto have begun to change their approach.
Palo Alto Mayor Eric Filseth agrees that many elected leaders around the area were slow to address these issues. But Filseth says simple economics and the difficulty in getting middle wage workers to fill public sector jobs changes Palo Alto city leaders’ thinking about five years ago.
“Low and middle wage earners come under a huge amount of pressure. That's certainly happening in our town,” Filseth said.
Because of high housing costs, “less than 10 percent of our teachers live here in Palo Alto. Less than 7 percent of our city staff lives here in Palo Alto,” Mayor Filseth said. “We began taking measures to try to constrain job growth to the point where we could realistically keep up on housing. Since about 2016, that's been the case. But the valley, continues to produce jobs vastly faster than it produces housing.”
FUTURE ROLE WEALTH PLAYS IN SUCCESS OR FAILURE
Which brings us back to all these top ten property owners and all the wealth currently residing in Silicon Valley.
“I see this as fundamentally a problem of investment,” Filseth said. “I mean, the valley has generated immense wealth. The valley's economic expansion has generated immense wealth and has not invested it enough of it in the housing and transportation infrastructure that's necessary to support that expansion.”
Despite some successes Assessor Stone says enough still has been done either by elected leaders or by the major property-owning tech companies and developers.
Stone compares the current Silicon Valley to the metro area around Detroit during the automotive boom of the 1950’s and 60’s.
“You know it (inattention to housing and infrastructure) is going to kill us,” Stone said.
Like Silicon Valley now “everybody wanted to be Detroit. They wanted an automobile industry,” said Stone.
Now said the man who’s been watching this problem from his seat in the Property Assessor’s office for a quarter century warns “Detroit's been in bankruptcy. The population (of Detroit) has gone from 2 million to 600,000. And I truly believe that if we do not solve our housing problem in general, we will eventually go the way of Detroit.”
“And things happen a lot faster here in Silicon Valley than they did in Detroit,” said Stone. “So, if we don't solve these problems, we will go the way of Detroit a lot quicker than Detroit.”
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