The dot-com nosedive notwithstanding, Silicon Valley is still a place to get rich, and many people have. But the rapid boom has left anyone not in on the bonanza scrambling to afford soaring costs of living, especially housing. Marcella Juarez, 29, works at a fast-food restaurant in San Jose where she earns $488 a month. Her husband, a laborer on construction projects, brings in $1,000 in a good month. Times haven’t been good in a while, though. They live with their two children in a two-bedroom apartment located in a run-down complex in San Jose. Their rent? $1,200 a month. It doesn’t take a computer scientist to understand that these numbers do not add up. To cope, Marcella (a pseudonym), her husband, and their children sleep in one bedroom while renting out the second bedroom to four men who also work at low-wage jobs.
Conditions like these are facing families all over California’s Silicon Valley – one of the wealthiest communities in the world. In response, organized labor and the housing movement have joined forces to push a bold package of affordable housing construction and tenant protections. And though the proposals are full of items that would be assumed political non-starters in most of the country – rent control, inclusionary zoning, high public expenditures – the combined weight of both groups is making astounding progress.
The partnership was not an automatic one. In the early days of the labor movement, unions often developed housing for their members, but labor’s only major housing initiative in recent decades has been the AFL-CIO’s Housing Investment Trust (HIT), a fund that puts union pensions to work creating affordable housing and union construction jobs. Despite the success of the HIT and earlier initiatives, few union leaders at the local level have ad-dressed their members’ need for affordable housing directly, believing that the greatest contribution unions can make is by bargaining for higher wages that will provide access to better housing. However, out-of-control housing markets, like that in Silicon Valley, have led some union activists to explore other approaches.
The high-tech boom of the 1990s left the San Jose area with an “hourglass” shaped economy. At the top, there was an impressive expansion in employment among highly skilled young professionals, many “living large” and bidding up prices for existing housing. But four of every 10 new jobs created in Santa Clara County pay less than $21,000 a year. Many are in retail sales, building maintenance, food service and other relatively “low skill” industries. Today, more than 53,000 families – fully one in five San Jose households – are considered very or extremely low-income.
The result of this hourglass economy is a serious housing crisis. Over the last three years, the cost of renting in Santa Clara County has soared by 61 percent. It’s little surprise that 38,000 San Jose families live in overcrowded housing, while an additional 133,000 Silicon Valley workers have been forced to look for housing outside of Santa Clara County.
As the housing crisis worsened, unions began to understand that it went beyond a question of wages. As Shane Ellers of the Service Employees International Union put it, “The gains we can make at the bargaining table are outpaced by the cost of housing. We’ve got to understand that affordable housing is more than just a paycheck issue.”
That recognition led the labor movement in Silicon Valley to make housing one of its top political issues. Beginning in late 2000, the South Bay AFL-CIO Labor Council, the umbrella group representing most area unions, joined with a wide range of neighborhood and low-income advocacy groups to create a coalition called Housing for All. The Labor Council had worked with many of these activists before, in efforts to win a living wage ordinance in San Jose and to establish a countywide children’s health program, but this was the first time housing had been the subject of such a group effort.
The presence of labor in Housing for All added several things to the mix. First, and most straightforward, were resources and political capital. The Labor Council has its own policy research arm, Working Partnerships, USA. Through Working Partnerships, housing activists could draw on a wealth of talent to carefully research and prepare their affordable housing proposals. Working Partnerships published this research, and the proposals that grew from it, as a 50-page study, Everyone’s Valley: Inclusion and Affordable Housing in Silicon Valley. The report offered a detailed analysis of the area’s housing crisis and declared that solving it required action on two fronts: constructing new affordable units and preventing the loss of existing affordable units.
As significant as it was, Everyone’s Valley and its findings could easily have been ignored had it not been for the extra political clout labor brought to the table. In almost every major city, union access to local political leaders is exceeded only by business. In San Jose, the Labor Council had already demonstrated that its access, coupled with rank-and-file political action and sustained community outreach, could yield impressive results. The Council’s participation in coalitions promoting a living wage and universal children’s health care had made local elected officials quite sensitive to union concerns.
An additional asset that organized labor particularly offers the housing movement is its familiarity with the players in the construction and development industry. Building and construction trade unions have a thorough understanding of the inner workings of the development community, which can be crucial to identifying potential allies among developers and contractors.
The size and breadth of a regional labor organization’s constituency also turned out to be an advantage for the coalition. The formation of Housing for All was a turning point. Prior to its creation, work on the housing crisis tended to be fragmented. Tenant advocates were chiefly concerned with promoting renter rights, and rarely addressed the need to construct new units. Another group was principally interested in encouraging gap financing for homebuyers, and didn’t include renters in its strategies. The coalition approach, and labor’s need to be accountable to all its members – from workers in hospital laundry rooms to chemical engineers – helped bring these causes together into a united strategy that addressed many different constituencies at once, within the same set of proposals.
Labor’s perspective helped extend the rhetoric and the proposals in more than one direction. Affordable housing activists traditionally and understandably focus on the most severe problems, those faced by families like Marcella’s. But the Working Partnerships study, Everyone’s Valley, also addressed the impacts of San Jose’s housing crisis on somewhat higher-income working families. It described how high housing costs have forced workers to live outside Santa Clara County and endure ever-lengthening commutes that cost area drivers more than $1.25 billion annually. No less ominously, the study reported that the quality of schools and the health care system was being diminished as housing costs kept teachers, nurses, and the other professionals from making their homes in Silicon Valley. And it noted that the housing crisis even handicaps high-tech firms, which compete all over this country – and all over the world – to recruit talented young people to come to Silicon Valley. By documenting the impact of housing costs on middle-class families, the environment, and local industry, Everyone’s Valley helped prevent opinion leaders from “ghettoizing” the housing crisis as a problem of the poor alone.
At the same time, labor also represents some of the lowest-income service workers, for whom the daily challenge is preventing homelessness, not suffering through a long commute. While affordable housing developers and tenant rights advocates tend to operate in two different spheres, labor was not used to assuming such a separation, and the coalition decided to try to coordinate them. After all, it does little good to create new affordable housing if families are being forced out of homes they already live in just as fast. Bringing the two themes together sometimes allowed the coalition to recast familiar arguments in different ways that would reach new audiences. Where tenant activists are often most comfortable speaking about the pain suffered by tenants who are unjustly evicted, Housing for All addressed unjust eviction as a technique used by landlords to convert affordable units into market rate housing.
The coalition’s proposal is therefore two-pronged. First, it proposes creating 8,600 units of new affordable housing through a combination of inclusionary zoning – in essence, requiring developers to dedicate a percentage of new housing units for low- or moderate-in-come families – and public sector investment. A housing “superfund,” generated through a temporary increase in the sales tax or by issuing general obligation bonds, would finance these new affordable developments.
Second, it proposes strengthening rent control measures, enacting rent control in communities lacking protections, and establishing safeguards against unjust evictions. The coalition estimates that implementing the entire initiative would require a public investment of $1.2 billion. And yet, the groundwork it laid was strong enough that San Jose Mayor Ron Gonzales and most of the City Council were on hand to endorse the plan when it was unveiled. Today, the bulk of the plan, including the proposal for inclusionary zoning, has been passed by the City Council. The Council is moving ahead more cautiously on the proposed tenant protections, but it is moving, and it has created a Rental Housing Task Force to address the issue.
After such a success, has the Labor Council now put the housing crisis behind it? Hardly. In fact, when its leadership drafted its agenda for next year’s San Jose city elections, winning affordable housing was near the top of the list. After all, when unions negotiate pay raises for workers like Marcella, their goal is to put more money into her pocket – not her landlord’s.