For most Facebook users, news that the company is growing is a good thing: new features and a better user experience can generally be expected from such growth. If you're one of the residents of Facebook's new hometown, Menlo Park, however, growth can be a threat to your way of life. Though Facebook has called Menlo Park home since 2011, the company is expanding at a rapid rate. 15,000 Facebook employees currently live in the city, but they expect an additional 20,000 to work in Menlo Park over the next decade. That's more than the current population of the city. With more jobs than home available in the area, rents have skyrocketed.
Menlo Park is far from the only town whose economy has been disrupted by tech company giants like Facebook. Palo Alto, the original home of Facebook, has also been the home of companies like Apple, Google, Pinterest and Intuit. Over the last two decades, software developers have descended upon the area, forever changing the landscape of the town. Cal Bay Property Management's Scott Safadi recently offered his insight into the challenges faced by locals of both Palo Alto and Menlo Park to the Palo Alto Daily Post.
Too often, when a tech company announces they will be headquartered in a new town, property owners are eager to sell their apartment buildings for a profit. They base their price around the market value of what a landlord might be getting if all the units in the building were occupied. Unfortunately, when a new buyer takes over management and implements a rent hike, the locals are the ones to suffer. A once affordable apartment can skyrocket in price overnight. “The guy who sells the building wants as much as possible from the sale. And so the buyer says, ‘I need to get as much rent as possible to make up for this purchase,’” Safadi explained to the Daily Post.
For Facebook employees earning six figures, this isn't necessarily a problem. For others, though, the rapid increase in rent can leave normally stable renters in a lurch. The Daily Post piece cites an example of one local woman who will see her rent increased by 322 percent since she moved into her apartment 26 years ago.
What's happening in Menlo Park is far from an exception. In fact, as tech companies expand throughout the United States, stories like these will become more common. It's up to ethical property owners to raise rent prices in a fair way.
- Scott Safadi, Cal Bay Property Management
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