What does Apple Park mean for Cupertino real estate?
Since the 1970s, Apple has had a constant presence in Cupertino, California. Back then, it was just a small company with big dreams, and few could have anticipated just how powerful Apple would become. Today, it’s a force that has impacted the entire world, touching the lives of millions of users, but the region that is perhaps most influenced by Apple is still the place where it all started.
Since Apple became a household name, Cupertino has attracted an influx of residents, businesses, and overall development. The city has also seen real estate prices tick up dramatically in recent years. In 1998, the median price of a Cupertino home was around $600,000. Today, it’s nearly triple that number at $1,783,600, a price that’s out of reach for most income levels.
With the opening of Apple Park, the tech giant’s second campus in Cupertino, Cupertino has already seen prices jump further. “Housing prices have risen very steadily in 2017 with many houses reaching record highs in their respective neighborhoods,” said Cupertino real estate agent George Tan. “Apple Park has definitely brought more visibility and publicity to Cupertino.”
And it’s not just homeowners who are cashing in on that visibility. The city finally got its own version of a downtown recently, Main Street Cupertino. It’s a retail and housing complex with plenty of restaurants, cafes, shops, and a Target. Even long-time Cupertino fixture Alexander’s Steakhouse, a high-end restaurant previously located by the freeway, wanted a piece of the pie. The restaurant moved locations and now sits among the other restaurants on Main Street, looking out at the busy Stevens Creek Boulevard.
“I don’t think we’d have the gorgeous Main Street if it weren’t for Apple. It’s Apple that attracted all these businesses, which seem to be doing really well,” said Julia Lee, a Cupertino homeowner.
It may seem like everyone in Cupertino is hitching onto Apple’s wave of growth and riding it straight to the top. But some residents who own homes on the blocks near Apple Park see the new campus’s effects on Cupertino as a double-edged sword.
“Of course I’m glad to see the value of my home increasing,” said Lee, whose house sits a stone’s throw away from Apple Park. “But I’m also worried by the trends. Who can afford to buy a home here, besides high-tech workers? And the people who can’t afford it, where will they live?”
That’s a question on everyone’s minds in Cupertino these days, including city officials. “We do acknowledge and we’ve realized from the outset that there is a housing stock issue. We’ve seen more calls to action for increased housing stock recently. The proposals have been pretty steady,” said Cupertino Vice Mayor Darcy Paul.
But even as more housing is developed in Cupertino, competition is still fierce. “There is still a significant single-family home housing shortage in Cupertino and surrounding cities,” said Tan. “Though there are some new housing developments being built, many of the home buyers are waiting and still trying to purchase single-family homes, since many of them have several children or parents [living with them].”
Much of the fervor to buy a home in Cupertino has been fueled by Apple employees themselves. “We have definitely noticed more Apple employees looking for houses in the immediate area,” explained Tan. “Due to the fact that traffic has gotten so bad in the Valley, one of the primary motivators for Apple employees to look for houses in and around Cupertino is to avoid all of the traffic before and after work.”
As in the rest of the Bay Area, the real estate shortage in Cupertino boils down to high demand and low supply. Developers rely on financial incentives to determine which projects to take on, and the incentives currently offered to developers favor the creation of more commercial real estate, rather than residential, and Vice Mayor Paul says that needs to change.
“The financial incentives on the development side I think still are very much in favor of trying to create more offices. This is the Valley, and our major tech companies are doing quite well. As long as the economy is doing well and our companies are performing well, there’s going to be incentives to put offices there. And that’s primarily because with offices, you have one tenant, and they tend to take long-term leases. We’re proceeding in terms of encouraging the applicants that come in front of us to focus more on [the housing] side.”
Some tech companies have taken it upon themselves to build affordable housing for their employees, including Facebook and Google. This not only allows workers to live closer to the office and avoid a traffic-heavy commute, but also gives them access to affordable homes — a godsend in the highly expensive Bay Area. So far, Apple has not made any announcements about launching affordable housing.
With Cupertino’s real estate prices increasing dramatically this year, many interested buyers are now looking outside Cupertino and seeking homes in nearby cities instead.
“I couldn’t find a single-family home in Cupertino that would be large enough for my husband, our three kids, two dogs, and me, so now we’re looking in Sunnyvale. We’ve been hunting for months,” said Alison Smith, a current Oakland resident. “At this point, we’re pretty much ready to buy whatever we can get our hands on.” Smith’s husband recently started working for Apple, and the family wants to live as close to Cupertino as possible to avoid the notorious Silicon Valley commutes.
Like Cupertino, nearby cities like Sunnyvale, and Santa Clara have also seen their home prices steadily rise. “High-tech buyers trying to cut down their commute times and [be close to] good schools for their kids are aggressively writing offers and paying record high prices on any house they can find,” said Tan. “Low inventory and low mortgage rates are big factors for the price increases as many of the buyers making offers are very well-qualified buyers, many of whom are dual income, working parents.”
Avoiding the rush-hour commute is a universal wish in Silicon Valley, but the congestion doesn’t end once drivers are off the highways. It extends into the local streets, and it’s particularly noticeable in Cupertino, with thousands of employees flocking every morning to the two major campuses and scattered buildings around the city. City officials are aware of the headaches caused by the rush-hour commutes, and Vice Mayor Paul says they’ll do their part to find a solution.
“We’ve most definitely taken strides to ensure that we create an infrastructure that addresses [the increase] in the amount of traffic, especially during the morning and evening commutes. Part of that is assessing each of the intersections that would be affected and making improvements along those intersections that would help to alleviate some of the added pressures.”
Those assessments began with the Interstate 280 and Wolfe Road interchange, as many Apple Park employees exit the highways at this junction. According to the Mercury News, modifications will be made to the infrastructure in order to promote smoother traffic flow.
Vice Mayor Paul also believes that developers should take strides to propose housing closer to job hubs, giving interested buyers more opportunities to live close to work. “We should put more of the housing closer to where the jobs are so we don’t end up having much worse commutes,” said Paul.
It remains to be seen what long-term effects will arise from the creation of Apple Park, but many people agree that the second campus is good news for Cupertino:
“All in all, Apple Park … has brought lots of worldwide attention to the city. With attention brings demand to live in Cupertino, which in turn brings new commercial developments such as new shops and restaurants,” Tan said.
“Apple has given so much to our city,” said Mary Kwan, a lifelong Cupertino resident. “Yes, there’s a real estate crisis and a lot of traffic, but it’s because of Apple, I think, that many of our local businesses are performing well. It’s Apple that has attracted a diverse, well-educated group of citizens to our city. So I’m glad to see their second campus come to life.”
“The city itself is roughly 20 years older than Apple. At the end of it, it’s pretty well imbued into the community. I think that we’re seeing the next phase, and it was nice to be able to help it achieve its second campus,” Paul said.
With the design of Apple Park, the tech company has demonstrated its social conscientiousness. The campus is one of the most environmentally friendly buildings in the world and runs entirely on renewable energy, according to Mac World. Vice Mayor Paul hopes Apple will extend its social conscientiousness into helping the housing situation in Cupertino.
“I admire the Googles and the Facebooks for taking a proactive stance and a hands-on approach to helping ensure that the housing stock is available. And I leave the door open for those conversations,”.