An Up-Close Look at Homelessness in Silicon Valley

The average one-bedroom apartment in the San Francisco Bay Area will set a renter back a whopping $2,965. To maintain an apartment at this rate, an individual working minimum wage in San Francisco at $12.25 per hour would need to work over 60 hours per week just to cover the monthly rent -- not including having enough cash left over for utilities, food, transportation or any other basic needs.

As one of the most brutal and highly-competitive rental markets in the country, it comes as no surprise that lack of affordable housing is a growing issue in the Bay Area. The impact is felt by both adorned tech employees and a struggling class of individuals living on the edge of homelessness in the world’s most populous innovation and opportunity hub.

A recent study published by the Economic Roundtable, a nonprofit public policy research organization, revealed that 104,206 residents in Santa Clara County (roughly 5 percent of the county’s population of 1.826 million people) were identified as having experienced homelessness at some point between 2007 and 2012 when the study was conducted.

On the other side of the economic extreme, funding for Silicon Valley’s most recent tech startups often start in the millions. Last month, DIY culinary subscription company Blue Apron received a $135 million round of funding at a $2 billion valuation.

While companies like Google and Facebook do not disclose the financial numbers of their employee perks program, both tech companies provide daily meals to all employees at a price point estimated to equate to roughly $72 million per year. The estimated cost to provide permanent-supportive housing to a homeless person in the valley is $19,767 per year -- a savings of $42,706 compared to the cost of services for individuals living on the street. If tech companies traded in their gourmet lunches, 3,642 homeless individuals could have permanent supportive housing each year.

Presently $520 million per year was spent providing public services for homeless individuals in Santa Clara County in the form of health care, rehabilitation services or through the criminal justice penal system.

“We have a unique storm of circumstances that other cities leveraging techniques to end homelessness simply don’t have to manage,” says Jennifer Loving, executive director of Destination: Home. The organization is a program of the Health Trust, a public-private partnership, which works collectively with city agencies, community partners and governmental bodies to end homelessness in Santa Clara County.

One solution prevalent in cities across the country is Section 8 vouchers, but in the expensive Silicon Valley rental market, subsidies barely scratch at the surface of providing long-term housing without challenge. And rental prices aren’t getting any cheaper. The maximum subsidy provided by the Housing Authority of the County of Santa Clara is just $1,560 for a one-bedroom apartment. With average rent hovering above $2,000, there is still a gap that reduces an individual’s ability to maintain sustainable housing long-term. That means that there is barely any room for margin. And the risk of homelessness is once again a threat for those already on the edge.

Profile of a homeless person in Silicon Valley

Loving asserts that ending homelessness hasn’t become a widely-adopted priority simply because there’s a lack of relatability and a long-standing mythology about what it means to be homeless in the land of plenty.

“Homelessness is not a shiny issue like STEM. We’ve been conditioned [as a society] to believe that [homelessness] is a thing that is supposed to be here. There’s not a massive amount of innovation, and a series of tents and tiny houses are not going to solve the problem at scale.”

Housing affordability is only one side of the issue. Organizations are working constantly to solve a complex issue with many moving parts. Addressing homelessness also means managing services for individuals with developmental disabilities, drug and substance abuse problems, and mental illness.

Housing first: House the most vulnerable, no strings attached

In 2013, Destination:Home called for a disruptive model to solve the crisis, commissioning the Community Plan to End Homelessness with distinct strategies to humanize services to individuals dealing with chronic homelessness, develop efficiencies through private-sector partnerships, and transform the way that local government responds to homelessness by enforcing rapid housing.

The study identified a cohort of 2,800 people who are persistently homeless and the most frequent users of public support services. If these high-use individuals were to be housed permanently, at an average retention rate of 75 percent, the city would reduce the high cost of public services from $83,000 to just over $13,000.

While there may not be an app to end homelessness, policy makers and collective impact agencies are pulling to stamp out the problem with one novel idea: Provide housing to people without one by 2020.

This September, officials in Santa Clara County and San Jose approved a $13 million budget to buy and renovate motels and hotels to be repurposed as temporary and long-term housing -- a move that will provide shelter for up to 585 homeless Silicon Valley residents.

Geoffrey Morgan, executive director of First Community Housing in San Jose, is a developer behind the production of two affordable housing complexes slated to be completed by the end of the year. As a developer, Morgan cites barriers to the development of a more robust production of affordable housing as a result of a slow permitting process.

“City leadership is beginning to align to understand the needs of homelessness. However, the approval processes for projects is lengthy -- not helpful for getting the homeless into rapid housing.”

Tech as a focused solution to humanizing homelessness

Addressing the disparity in Silicon Valley’s homelessness crisis with tech-based tools could prove to be attractive opportunities for investors and entrepreneurs wanting to move beyond philanthropy and into new market solutions.

Take for instance early-stage equity fund Impact America Fund (IAF), which invests in technology-based solutions that scale systemic change to enhance the quality of life for all Americans.

“As tech investors, we understand you can’t just throw tech at every problem. Homelessness shouldn’t be an issue in a great economy like America. We know that there is $55 billion in charitable donations each year, and how those resources are distributed and allocated are the biggest issue,” Stefanie E. Thomas, senior investment associate at Impact America Fund, told Triple Pundit.

IAF recently invested $200,000 into San Francisco-based company, HandUP -- a direct donation platform that allows individual donors to directly impact the lives of their homeless neighbors.

According to Thomas, the platform is humanizing the stories of homeless people while also calling on local community members to pitch in:

“HandUp connects these populations to case workers at some of the most well-respected social service organizations in the nation for further assistance. With resources and words of support, our community of donors also strengthen safety nets that our members can call upon in times of need.”

Since its launch in 2013, HandUP has facilitated direct-giving to 1,200 individuals in San Francisco, facilitating over $950,000 in support of individuals experiencing homelessness.

Julianne was five months pregnant when her fiance Seth was laid off from his job as a design engineer at a tech company in San Francisco. With no more than $1,000 left to live on, the couple turned to the Homeless Prenatal Program for housing and assistance while they sorted out their next steps and welcomed their daughter in August 2013. The family has since secured permanent housing and has used HandUP to help cover expenses such as food, incidentals for their daughter and tuition toward Julianne's accounting degree.

“We see ourselves as providing a toolbox of solutions to help end homelessness,” says Sammie Rayner, co-founder of HandUP. “People in these communities want to know how they can support their neighbors and often don’t know how. We saw how tech was able to solve problems, but didn’t see tech focus on homelessness and human services.”

By cultivating an ecosystem of nonprofits, the HandUP platform helps organizations cut through their own internal bureaucracy and/or funding challenges to fill a gap when resources are scarce, needs aren’t able to be met quickly, or the resources simply aren’t available.

How the tech industry can become a champion for change

Insofar, Silicon Valley has both the tools and the talent to become much more part of the solution to ending homelessness. Private dollars and resources can be allocated to expanding housing options, and greater efficiencies among resource allocation to individuals in need could be developed to disrupt a dire market need.

“We need champions in the private sector. We have all the problems with the largest population of homelessness, but we have all of the solutions too. Other cities can’t say the same thing,” Loving said.

Correction: This article was updated to correct the number of people who can be housed by the $13 million motel remodel from 6,500 to 585. We regret the error.

Image credit: Destination: Home via Facebook