Facebook’s CEO, Mark Zuckerberg, is a 32-year-old man who is worth a whopping $32 billion. He has made most of his money, if not all, from a project he started while he was an undergraduate student at Harvard University.
But you already knew that didn’t you?
Yes, just like you, millions of other people around the world tuned into their screens,after first downloading a file not exceeding in size than 1GB from a site like kickassTorrents (you can’t do that now), to watch the blockbuster that was the social network, when the movie came out in 2010.
But that’s another story. Right now Facebook is ready to take its penchant for dominance, from the online to the offline world.
Facebook is rumored to be building apartments that anyone would be able to rent.
Sounds too good to be true?
You’re right. It is too good to be true because those apartments come with a big catch.
Granted most people wouldn’t mind having Facebook as their next landlord, the social network company is trying to gather up support for the extension of its headquarters in Menlo Park, California, United States of America.
The expansion itself has been making the headlines for all the wrong reasons as reports have revealed that because of it, a lot of people would lose their homes.
Facebook is trying to bring in thousands of new employees to its main campus, that is in Menlo Park California, and advocates in the media have called on the company to do more for lower-income people who live near Facebook’s headquarters.
As a result of these calls, Facebook is now trying to rebuild the community it is expected to displace once the expansion of its headquarters is complete.
The social media giant is rumored to be building in the range of 1500 units for people to live in. These housing apartments will be available for rent to the general public but Facebook employees will also be able to give in their applications for residence in these apartments.
As with all good things, Facebook’s intentions of building that many apartments for housing come with a huge catch.
That catch is that as Facebook tries to wade its way into the real estate business by expanding its headquarters, its public relations office is burning the midnight oil in ensuring that the company does not get a bad rap in the media for displacing so many local people from its surrounding area.
Understand this. Whenever Facebook buys and develops real estate near its headquarters, the rent amount of houses in those particular areas along with the surrounding areas rise astronomically.
Lower income people who live in these areas aren’t able to afford such high rents and thus have to move to areas where they can afford housing.
The net effect is that, as Facebook develops real estate it displaces lower income people from the surrounding area in the thousands.
To contain this situation, Facebook has guaranteed that the company would allow low to middle-income local families rent out 15 percent of the new housing units it is currently building.
That must sound like great news right? Well, not quite.
The problem is that even if Facebook remains true to its word and rents out 15 percent of the housing units to lower income people from the surrounding area, the fact remains that rest of the 85 percent of housing apartments would still have astronomical rents.
Those ridiculously high rents would still mean that the majority of the local population living in the surrounding area would have to leave their hometown for some place cheaper (like Oakland?).
Facebook is trying its absolute best to hide the fact that even with that pledge, 85 percent of the homes it will build would be populated by technology workers who make a lot of money.
And this isn’t the first time Facebook has been dragged into the debate about rising income inequality in the United States of America. It has been entangled in the debate for years now.
About six months ago, the World Bank produced a report which gave strong arguments about the fact that these large technology companies have indeed caused a rise in income inequality instead of a reduction.
The 330-page document from World Bank said that any perceived benefits from the activities of these technology companies are mostly offset by the risks they pose to the surrounding local population.
In short, these digital companies are giving birth to various emerging risks that weren’t present before.
And the worst part is that these technology companies can’t really be expected to help combat these new problems.
Technology companies provide advanced solutions to current problems. That is, in itself, great but when those solutions replace routine jobs, people lose their source of income.
Consequently, these people who lose their job, are forced to compete for other low paying jobs. That increases inequality. And the United States of America isn’t the only country that is facing these problems.
Most advanced economies are failing to confront the problems, caused by technology companies, such as polarized labor markets and record-level inequality statistics.
Technology companies like Facebook exist to amplify higher skills. So it is quite understandable why companies in the digital technology industry are unable to address problems caused by the advanced solutions that are developed by these companies themselves.
For example, Facebook’s expansion of its headquarters resulted in thousands of new highly educated technology workers into the Menlo Park area.
As you would expect, most of these technology workers were Ivy League graduates and high-income earners.
Their settlement into these areas drove up housing rents (as has been mentioned before) which forced members of the local population to move away to other areas since most of them weren’t making as much money as Facebook employees.
So can you really blame the local population for pouring hate on companies like Facebook and Google?
If Mark Zuckerberg himself moved into one of these Facebook built apartments, he can be sure of never getting an invite to his neighbor parties.
Right now, Facebook needs about 1.1 million square feet of area to expand its headquarters so it can accommodate the next batch of high earning technology workers. Not only that, it needs some support for a cost effective proposal to its expansion plans.
As of this moment, Facebook’s proposal has some major holes in it. Firstly, nowhere does the proposal state that exactly who would be developing all the real estate the company would buy.
Would it be developed by Facebook or will the company hire a contractor to do the work on its real estate land?
And secondly, there has been no mention of a project completion date. So currently, there is no way to know for how long Facebook’s development phase would continue.
But, hypothetically speaking, even if Facebook answers these questions comprehensively, would it change the fact that, as a result of these developments, Facebook would again contribute to increase its ugly footprint in the surrounding area?
Would Facebook’s expansion plans be able to combat the rise in real estate prices in the area?
And how would Facebook address the problem of driving out people who can’t afford to pay such high rents because of its expansion plans?
Most experts agree that the answer to all these questions is a big fat NO. Facebook would continue to do what it has been doing for years now.
And if you thought this is the first time Facebook has been embroiled in a controversial housing project then you thought wrong because in 2013 Facebook built a housing community that was about 394 units big.
That community was within walking distance of Facebook’s offices and supported facilities such as a sports bar, pet daycare, and outdoor pool while the rest of the surrounding population toiled all day long to put food on the table.
It was also in 2013 that Wall Street Journal reported that the project could easily be named a company town.
A company town, as the name suggests, is a small community that is built by unscrupulous plutocrats for their own workers. It gained notoriety in the 20th century for its unique features.
The employers involved, provided facilities such as healthcare, churches and law enforcement personnel to their highly paid employees.
But eventually these “capitalist” failed to safeguard the rights of their residents and workers.
Some have questioned whether Facebook’s housing apartments are indeed those company towns.
It probably is too early to ask that question but it is also true that the new offices are expected to service about 6500 new workers.
To offset the local population’s outrage over its latest expansion, Facebook is offering housing to the general public as a goodwill gesture.
No doubt, some middle-income people will benefit from the latest Facebook housing scheme but overall, Facebook’s real estate development will further exacerbate the socioeconomic problems of the area.