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Would YOU make 400 people homeless for an extra $16m? Decision time in Silicon Valley
Land owner to decide: $39m and his pals – or $55m
Poll A trailer park owner faces an unusual conundrum: sell his property for $39m and keep the long-term residents on his land in their homes – or take $55m and watch property developers tear it all down.
That's right, it could only be Silicon Valley.
Joe Jisser's parents bought the park's 4.5-acre site 30 years ago for the not-insignificant sum of $4m. There are just over 100 trailers and a dozen rental studios on the property; roughly 400 people live on the park. Rent is $750 a month.
But thanks to the fact that the Buena Vista Mobile Home Park it is located directly on the El Camino Real, the road running through the heart of Silicon Valley, it has never been worth more. It is a 10-minute drive to the campuses of Google and Facebook which, given the pain of commuting in the Bay Area, has made the park a prime location.
The land borders three of the 10 most expensive ZIP codes in the United States: Atherton, Palo Alto, and Los Altos. The cheapest home for sale right now near the trailer park has a $1.5m asking price; the most expensive is $12m. The average income is $213,500. And yet among the multibillionaires and their mansions stands the trailer park with its inhabitants earning on average $40,000.
Jisser decided the tech boom was the perfect time to sell up and applied to the city council to close the park down. The application took over two years but was finally approved in May and since then he has been looking for buyers.
Consider taking a little less?
One of those potential buyers is taking the unusual step of offering $16m under the market value of $55m. That buyer? The county of Santa Clara and the city of Palo Alto.
Supervisor Joe Simitian of Santa Clara County wants the trailer park kept as it is, fearing turfing out the residents will be just the latest shift in an area becoming a haven of the rich. The county and city believe the park's residents will be forced to move down the coast or across the Bay if the land is sold to private developers – so they want to purchase the space and keep it as-is.
The pair have been building up a stockpile of cash that's ring-fenced for providing housing for low-income citizens: developers have to throw some dosh onto the pile every time they build on undeveloped land. In June, the city council agreed to match the county's $14.5m pot, bringing the total fund up to $29m.
The idea would then be to put the prime real-estate into the hands of a non-profit corporation that would continue to charge reasonable rents and use the money to maintain the site. That company, Caritas, operates other mobile home parks in California, and said it would issue a $10m bond, raising the available funds to $39m – the figure on offer to Jisser.
But that falls short of the commercial value of the land, estimated at $55m. Supervisor Simitian has put in a formal offer of $39m, and he's hoping that other private donations will bring the bid up further.
According to the Wall Street Journal, 44-year-old Jisser is seriously considering the lower bid, pondering whether he has a "moral obligation" to preserve the homes of those who have paid him rent for 30 years, many of which he counts as friends.
Tensions are rising, however. Jisser told the WSJ he was waiting for formal bids from developers but acknowledged he had received Caritas' bid. In the meantime, the 400 people living on the site are waiting to see if they will keep their homes or be forced out of Palo Alto – and almost certainly priced out the area for 20 miles all around.
In the meantime, tech bros will no doubt be salivating at the prospect of getting hold of one of the "luxury apartments" that a commercial developer would almost certainly build on the land. There is enough space for nearly 200 of them. ®