By Karen Chapple and Jae Sik Jeon
Economic Development Quarterly
September 2021
The rapid growth of tech company headquarters such as Apple, Facebook, and Google could potentially put new pressure on the housing market in adjacent residential neighborhoods, in the form of housing price appreciation and real estate speculation.
In this article, Professors Karen Chapple and Jae Sik Jeon examine the relationship between the big tech corporate campuses and Silicon Valley/San Francisco housing markets using the Zillow (ZTRAX) transaction and tax assessor data. The authors compare real estate activity adjacent to new company locations with activity in nearby areas, conducting a difference-in-differences analysis to estimate changes in housing prices and speculation.
They find that housing prices increase overall by an additional 7.1% in the immediate vicinity of the tech campus 2 years after arrival, with wide variation across campuses. The authors also identify significant real estate speculation occurring prior to firms’ arrival. This suggests that cities should take a proactive role in mitigating tech firm impacts on vulnerable adjacent neighbourhoods.
