Why Facebook Is Offering Employees $10,000 to Live Near HQ

The company's offer is a statement about congestion in Silicon Valley and the shortcomings of remote workers.

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By John Boitnott

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Facebook Headquarters, Menlo Park, California.

Opinions expressed by Entrepreneur contributors are their own.

Today's global workforce is good news to employers located in high-cost areas. They can hire people in rural locations (or far away ones) at a fraction of the cost they'd pay someone locally, which means they can get more experience and better quality work for less. But there are still benefits to having employees onsite, as Facebook seems to be indicating with its recent offer to pay $10,000 to $15,000 to employees to relocate near the company's Silicon Valley headquarters.

It is debatable whether having thousands of additional Facebook employees near Menlo Park and East Palo Alto will be completely positive for those communities. The traffic from long commutes in the region might be lessened, but increased housing prices in those areas could drive out lower income residents (like teachers!). Only time will tell exactly what mix of developments may occur. More on that in a bit.

For its part, the social media giant says the move is designed to make things easier for its employees. Some believe that Facebook is merely trying to encourage employees to spend more time at work. With their homes nearby, they could shift that extra commuting time toward productivity, benefiting Facebook and its customers. That may occur some but there's a lot more to it than that.

The shift away from remote.

Let's tackle remote working first. Telecommuting has been touted as "the future of work," since it removes geographic limits and frees up businesses from providing office space. Experts cite studies that have shown remote workers are often more productive and happier when they're allowed the freedom to work where they want. Fewer commuters lighten the traffic load on clogged freeways. However, there are downsides to the practice, including a loss of the team cohesiveness that is important to a business's work culture.

As attractive as remote work seems, many businesses are taking a firm stance against it. Yahoo and Reddit famously rescinded their work-at-home policies and many more companies never allowed it in the first place.

Remote work also may lack one other key benefit. In most places, these massive headquarters naturally bolster the community around them, helping the creation of excellent new schools, housing and retailers to support growing populations. Communities won't see that stimulus if the vast majority of employees rarely need to come into the office.

Related: 5 Reasons to Refrain From Hiring Virtual Employees

Communities feel the strain.

There's a problem with Facebook bringing people close to headquarters, though. As industries grow, cities must be able to grow to support the large number of workers needed to live nearby. That's not happening in my hometown, San Francisco, or most of Silicon Valley. The region's cities can't build outward anymore, and people (talking to you, NIMBY's) don't want their local governments to allow taller building that would help rents go down (or at least stop rising so fast). This has resulted in a cascade of issues that are very hard for everyone involved to deal with.

We're at the point now where a huge portion of the people trying to survive in Silicon Valley simply can't afford to live there. The area is home to some of the most expensive housing in the nation, leading to a housing crunch that has worsened as the population has grown. Almost 7.5 million people live here now, which is almost twice as many as 40 years ago. The aging infrastructure isn't always equipped to handle it.

Along with Facebook, Apple and Google are building new campuses, leading many to wonder where all of the workers will live. Commuting is an option, but the roads are clogged already. Increasing the amount of affordable housing seems to be the best option.

Related: A Drone's-Eye View of Apple's 'Spaceship' Campus

Population drives demand, but not new housing.

To some degree, I think the Facebook move is a reaction to the housing situation in San Francisco specifically. By offering incentives to employees who choose to live nearby, Facebook is taking just a bit of pressure off SF, which isn't even coming close to building enough housing for all the workers who want to live there. Also, employees of Facebook, Google and other Silicon Valley giants who pile into commuter buses around the city are a lightning rod for criticism. It may be advisable to shift employee residences south.

Let's talk numbers though. On average, only 1,500 units have been added to San Francisco per year, even while the population grew by 32,000 people between 2010 and 2013. As a resident, I'm often struck by how many new office buildings launch skyward but how few market rate or affordable housing units go up.

Something similar is also happening in Mountain View, where despite planning to add 42,550 new workers to the town alone, the city's current zoning plan allows for a maximum of 7,000 new homes by 2030.

One last note on traffic. It's a serious problem for the entire region, and it's one that is worsening with each year. In San Francisco alone, most Uber, Lyft and taxi drivers I talk to say the number of cars on the streets seems to have skyrocketed in just the last few years.

Then of course there are the freeways. People living in the cities along Highway 101 have some of the worst commutes in the country, whether they're heading up to the City (what residents call SF) or down the Peninsula. By incentivizing its employees to live nearby, Facebook is, in fact, easing the traffic burden, as well as helping workers afford some of the higher-priced homes in the area. However, even that incentive won't help the fact that there simply aren't enough houses being built. To my mind, that's the very core of this issue, the heart of an ongoing political argument that doesn't appear to have a resolution in its near future. It's highly contentious, has a lot of moving parts, and perhaps isn't best suited for this one post centered on the Facebook decision.

The complexities of San Francisco's housing crisis likely won't be solved by one business's incentives. However, I think Facebook's efforts to encourage employees to live closer rather than work from home could be beneficial overall. If more Silicon Valley businesses find ways to help with the housing crisis, the area may be able to eventually ease some of its congestion burdens.

Related: How to Launch a Thriving Startup Without the Silicon Valley Hassle

John Boitnott

Entrepreneur Leadership Network VIP

Journalist, Digital Media Consultant and Investor

John Boitnott is a longtime digital media consultant and journalist living in San Francisco. He's written for Venturebeat, USA Today and FastCompany.

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