The Menlo Park Housing Commission and community members who attended its Wednesday, June 29, meeting, were dubious at best at conclusions in a study claiming that Facebook's addition of 6,550 new jobs, proposed as part of its expansion plans to add two new office buildings and a hotel, would have a minimal impact on local housing demand.
"The analysis was very, very, very conservative and not complete," said Michelle Tate, housing commission chair.
The displacement study was informational only, and won't have legal grounding to affect the city's approval for Facebook's project. Conducted by Keyser Marston Associates and funded voluntarily by Facebook, it attempted to gauge how much the new employees would affect housing demand in Belle Haven and East Palo Alto in particular.
It found that housing demand will not increase beyond Menlo Park's available housing, because currently, only about 4 percent of Facebook's employees live in Menlo Park overall, and about 0.6 percent live in Belle Haven and East Palo Alto.
The analysis did not factor in what might happen if and when the city's general plan update is implemented, said Adina Levin, a city transportation commissioner. She pointed out that while the study factored in future projections on how traffic might be affected by the general plan changes, it did not do the same for citywide housing demand.
Under the general plan update, if it is approved as proposed, up to 3,500 housing units could be allowed for construction on Facebook land, and a total of 4,500 new units could be built across the city's M-2 area, east of U.S. 101. Those would be built in addition to the 800-plus apartments already approved or under construction in Menlo Park today.
With a potentially large influx of new housing, a greater proportion of Facebook employees may want to move nearby, several community members predicted.
Remarks from residents to the Housing Commission which were not recorded as public comments on the project, due to procedural rules suggested that people are worried about what Facebook's expansion could mean for residents of Belle Haven.
Christin Evans, a co-owner of Kepler's bookstore who is gathering local stories about the housing crisis in Menlo Park at tinyurl.com/crisis329, said she already knows 15 people in Menlo Park who have been displaced by the housing market, so she believes the analysis is "very conservative."
One recommendation was to halt the project altogether. "We need to take a pause from the office boom to try and catch up," said Menlo Park resident and former council member Steve Schmidt.
Menlo Park resident Brielle Johnck said that while it sounds great that the city's zoning permits 3,500 new housing units, Facebook faces no requirement to actually build those units.
"Just because things are allowed doesn't mean things will happen," she said. "Facebook, we've got our faith in you. Don't let us down."
The only thing the Housing Commission was expected to do at the meeting was make a recommendation about whether Facebook should have flexibility in how it decides to go about building 20 affordable housing units or paying the monetary equivalent of $6.3 million. The commission agreed to recommend to the Planning Commission and the City Council that Facebook be granted that flexibility.
The mandated affordable housing provision is based on a city formula part of city rules that require new developments to fund or build affordable housing based roughly on how much square footage would be added to existing built space. Because Facebook is building on land where there are existing buildings, the 20-unit requirement is lower than it might otherwise be, according senior planner to Kyle Perata.
Facebook employees said they have been in talks with MidPen Housing, a nonprofit that develops below-market-rate housing in the Bay Area, and are considering contributing the required funding to MidPen.
According to Jan Lindenthal, MidPen's vice president of real estate development, the funding for the units could be put toward a project that would enable about 70 apartments for mixed-income families to be built on the 1300 block of Willow Road. The housing developer is currently building 90 housing units for low-income seniors on the 1200 block of Willow Road.
Ms. Tate, the commission chair, said she'd prefer to have the units built in a location that better integrates residents of different socioeconomic levels, even if it means waiting longer, rather than place them all in a solely "affordable" complex.
Facebook employees pushed back, saying that working with MidPen would enable the apartments to be built faster, to meet more immediate affordable-housing needs.
Hours before the Housing Commission met, MidPen released some startling statistics about how hard the housing crisis has struck locally: From 2010 to 2016, Menlo Park's Belle Haven neighborhood lost 133 households that had annual incomes of less than $100,000, and East Palo Alto lost 699 households with incomes of less than $100,000. Many of those households were replaced by residents with annual incomes greater than $100,000.
MidPen said it had conducted the research in consultation with real estate analysts from the Concord Group.
According to Lily Gray, senior business development manager at MidPen, the numbers are an aggregated count of households registered under one income bracket or another, so some people in that count could have either combined households or experienced income increases that put them over the $100,000 annual income threshold.
"It's not a perfect displacement measure," she said, "But we do know that income growth has been low in recent years."
A tentative joint meeting with the Menlo Park City Council and Housing Commission is penciled in for Tuesday, July 19, according to Mr. Perata. Previously, the meeting was scheduled to take place in April, but had been postponed indefinitely.