Cisco spent a record-breaking US$50mil on Silicon Valley homelessness. Where has it gotten us?


Cisco gave the money to Destination: Home with no strings attached – doubling the non-profit’s budget for five years and allowing it to spend the money as it saw fit. — Homeless photo created by jcomp - www.freepik.com

Cisco made a splash when it ponied up a record-breaking US$50mil (RM221mil) donation to fight homelessness in Silicon Valley. Now, that money is running out and even more people are sleeping on the streets. So what has it accomplished?

The donation helped fund 30 new apartment buildings for low-income and formerly homeless residents, provided cash to prevent struggling tenants from losing their homes and improved Internet access in affordable buildings. Cisco was the first local tech giant to commit such a large sum to housing and homelessness, and since then, companies including Google, Facebook (now Meta) and Apple have followed suit.

Still, homelessness has increased since Cisco CEO Chuck Robbins announced the donation on stage at San Jose’s Tech Museum of Innovation in 2018, and for every two people Santa Clara County gets into housing, another three become homeless. Just five of the buildings Cisco helped fund have been completed so far, and experts say more money is needed.

Robbins recently toured the affordable, 143-unit Calabazas Apartments in Santa Clara – the first building funded with Cisco’s money. He met with residents and with Jennifer Loving of local nonprofit Destination: Home, which administered Cisco’s money.

“To be able to see the result of her hard work and our investment is just fantastic,” Robbins said.

Roadblocks may lie ahead. Money from Measure A – the US$950mil (RM4.2bil) affordable housing bond Santa Clara County voters approved in 2016 – has been a boon for affordable housing development, but it likely will run out next year.

“It’s a good first step,” Jeffrey Buchanan of Working Partnerships, a Silicon Valley non-profit focused on equity, said of Cisco’s donation. “But there’s a whole lot more than can and should be done by the tech industry in addressing this crisis in which their growth and development plays a significant factor.”

But neither tech companies nor homeless services non-profits can control low wages, systemic racism, the federal government’s failure to significantly increase funding for housing, or a number of other factors that contribute to the housing crisis, Loving said.

“It’s not Cisco’s problem. It’s not Destination: Home’s problem. It’s all of our problem,” she said. “And it’s a huge failure.”

Robbins wouldn’t commit when asked if Cisco would put up more money, but said he’s in talks with Destination: Home about what that might look like. He’s considering putting together a coalition of other tech companies in order to make a bigger splash.

“Look, the problem still exists,” he said. “So I doubt very seriously you’re going to see us walk away from it.”

Cisco gave the money to Destination: Home with no strings attached – doubling the non-profit’s budget for five years and allowing it to spend the money as it saw fit. That’s a key reason the effort has been successful, said Kelly Snider, a land-use consultant, developer and professor of planning at San Jose State University. While some donors earmark their funds for specific purposes, it’s much more efficient to surrender the reins to an established non-profit that already knows how that money will make the most impact, she said.

“For a fairly small amount of money, I think they did a very good job,” she said.

Google pledged US$1bil (RM4.42bil) to ease the Bay Area’s housing crisis a year after Cisco’s announcement, and Apple followed with a US$2.5bil (RM11bil) pledge nearly six months later. Much of that money is in land the tech companies have vowed to turn into affordable housing – a slow process that in some cases will require the property to be rezoned. Google recently partnered with Habitat for Humanity to renovate duplexes in San Jose that will be sold to low-income families.

Even so, homelessness has increased by 3% in Santa Clara County and 11% in San Jose since 2019. But that doesn’t mean Cisco’s efforts were for naught, Robbins said.

Without that funding, “I guarantee you those numbers would have been higher,” he said.

Of Cisco’s US$50mil, US$42.5mil (RM188mil) went toward building housing for homeless and low-income residents in Santa Clara County. Those projects include two temporary sites where people can sleep while awaiting a permanent placement, but Destination: Home focused mostly on long-term housing.

“When it’s an apartment with a key, that homelessness is over,” Loving said. “When they go to a shelter, that’s OK, but it’s not over.”

Only a third of those projects are completed or in construction, while the rest still are in the early planning stages. Snider attributes that delay to cities’ slow and expensive permitting, inspection and building process. While that’s not Cisco’s fault, tech companies with influence in political and business circles have the power to advocate for change, she said.

“It needs to be faster, and it can be faster,” Snider said.

Another US$5mil (RM22mil) of Cisco’s money went to keep people from ending up on the streets. Aided by those funds, Santa Clara County expanded a program that helps struggling tenants pay rent. It went from serving 1,540 people in 2019, to 2,140 people last year.

In addition to the US$50mil, Cisco also contributed US$10mil (RM44.2) to Destination: Home’s COVID rental assistance in 2020 – an US$85.4mil (RM377.43mil) program that helped about 20,000 low-income residents affected by the economic toll of the pandemic.

Cisco’s money was crucial in building Calabazas Apartments, where Robbins recently met with residents. When non-profit Abode Services saw the empty lot on Kifer Road in San Jose, CEO Louis Chicoine knew he had to act fast. The lot was zoned in a way that would expedite housing development, and it wasn’t surrounded by single-family homeowners likely to oppose an affordable housing project.

But Chicoine was US$250,000 (RM1.1mil) short, and most investors won’t fund a project at such an early, risky stage. That’s where Cisco came in, filling the gap and allowing Abode to snap up the property.

Fred Peña, 61, had been sleeping in his car and hotels off and on since losing his job at AT&T in the 1990s. Last year he landed in a temporary housing facility in San Jose, and from there, he moved into Calabazas Apartments. Peña, who lives off general assistance, pays US$50 (RM221) a month in rent.

“It’s incredible,” he said. “I can sleep at night and I have my own restroom, my own shower, my own bathtub. It’s a relief.” – Bay Area News Group/Tribune News Service

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