After a decade of rapid growth, the median home price in the historically low-income city of East Palo Alto is expected to reach $1 million in the coming year, intensifying local concerns about gentrification and displacement as California faces a statewide housing crisis.

Home values in East Palo Alto have risen rapidly in the past decade, with the median price increasing from $400,000 in 2013 to $980,000 in 2018 according to the Silicon Valley Association of Realtors.

This rapid price increase has garnered mixed reactions from members of the East Palo Alto community. While property owners in the city have benefited from the increasing property values, East Palo Alto renters — who make up 61 percent of the city’s population — are being increasingly displaced as rents continue to balloon.

A changing city

East Palo Alto, historically a low-income community, was in the past reputed for its affordability. In 1980, the median household income for East Palo Alto residents was a little over $39,500, whereas from 2009 to 2013 the median income was approximately $47,000, according to a report authored by Logan Harris and Sydney Cespedes of The Center of Community Innovation (CCI) at the University of California at Berkeley.

However, an influx of upwardly mobile tech workers, ushered into the city by Amazon’s East Palo Alto office and the nearby Facebook and Google campuses, has caused a spike in demand for gentrified housing. Landlords have turned to rent hikes and evictions to prepare their property for redevelopment, pushing the low-income population out of the city.

According to East Palo Alto workers’ rights attorney Scott Hochberg, renters are being displaced to the East Bay and outward, even as far as the Central Valley.

“Landlords are aggressively trying to evict tenants because they know they will be able to rent their units at much higher prices to new tenants,” Hochberg said. “Our office has seen a huge increase in the amount of eviction cases than we have seen over there last few years.”

Hochberg attributed the rapid increases in home value to the disparity between the supply and demand for housing created by the burgeoning tech industry.

“In the last few years we have seen a huge increase in the amount of jobs in the area, starting with tech companies but filtering down to all businesses,” said Hochberg. “There are more and more people that are trying to move into the area and just not enough places for them to go.”

Zach Kirk ’20, who has worked on anti-gentrification efforts in East Palo Alto, said that the median home price hitting the $1 million mark was expected yet “pretty shocking” for those battling gentrification in the area.

According to Kirk, increasing living costs have had a disproportionately negative impact on people of color in East Palo Alto.

“Black and brown communities are kicked out of where they historically have been, and room is made for white[s] and Asian[s] and techies and people that support the techies,” he said.

While East Palo Alto’s hispanic population has remained relatively stable at around 63 percent between 2010 and 2017, its white population has grown from 9 percent to 38 percent in the same timeframe, according to the U.S. Census Bureau. Meanwhile, the black population shrunk from 16 to 12.4 percent.

Residents’ reactions

Many homeowners in East Palo Alto have benefited from the increasing property values, which increase their net worth and raise more property tax revenue for local schools, police and roads.

“If anything, it has been better for us [because] our house values are rising, even if our property taxes go up,” East Palo Alto resident Eric Ascensio-Hernandez ’22 said.  

However, according to Ascensio-Hernandez, many of his friends and neighbors have been forced to move from the area or are currently in danger of losing their home. He said that the house next to his went through seven or eight tenants during his childhood because rapid rent hikes would quickly render the space unaffordable.

Alexis Nuñez, a freshman at the University of California at Riverside, grew up in East Palo Alto; his family moved three times, twice due to rent increases. Despite living with extended family members in order to split the cost of rent, repeated rent hikes led Nuñez and his family to leave their home.

“We were surprised by how much rent was moving up every year, especially for people who had lived there for a while,” said Nuñez, whose family has since moved to Palo Alto to live in affordable housing provided to Stanford workers and their families.

East Palo Alto Vice Mayor Lisa Yarbrough-Gauthier said that the Bay Area housing crisis was a result of a collective failure of local cities to build adequate affordable housing for their residents.

“We are supposed to build a certain number of houses … and most cities have not kept up with those numbers,” she said. “And for cities that are building up housing, people are shying away from the affordability side of it.”

Yarbrough-Gauthier added that East Palo Alto, which is only 2.5 square miles, is also faced with space constraints that limit the small city’s ability to provide affordable housing.

“We have more affordable housing than any other city in the region on the Peninsula, so when you are dealing with a limited amount of property, there is only so much you can do with that property,” Yarbrough-Gauthier said.

Recent policy changes

On Nov. 6, voters in East Palo Alto passed Measure HH, a tax on the city’s largest companies that Hochberg said will help mitigate the effects of rising home prices.

“Measure HH will raise funds to build more affordable housing units and provide advanced job training for local residents, so I think that is a step in the right direction in terms of having housing catch up to jobs,” Hochberg said.

Hochberg also encouraged the local government to enforce the city’s first-source hiring ordinance, which mandates that East Palo Alto companies give preference to locals when hiring. Residents of East Palo Alto have complained that Amazon was allowed to skirt this rule when they opened their East Palo Alto office, hiring far fewer East Palo Alto residents than the ordinance required.

Yarbrough-Gauthier echoed the need for the first-source hiring ordinance but also noted that job training programs, such as those that Measure HH will fund, will be necessary to ensure that locals can obtain higher-paying positions.

“It is not enough to have a first-source hiring ordinance,” she said. “We want to make sure that people are working those jobs that are going to pay them a living wage or a wage that is going to allow them to stay within their community,” she said.

Contact Serena Debesai at sdebesai ‘at’ stanford.edu.