A quarter-century ago, it was the murder capital of the United States.
Now East Palo Alto is about to become the Bay Area’s latest city of million-dollar homes, a turnabout wrought by the region’s inexorable housing shortage.
Real estate website Zillow expects the median value for East Palo Alto property to rise from $964,000 to $1.1 million over the next year. Morgan Hill, Alameda, Newark and Daly City are other Bay Area cities expected to soon strike seven-figure values.
East Palo Alto Mayor Ruben Abrica saw a mixed blessing for his city crossing the $1 million threshold. The city collects more taxes to provide services, and many long-time home owners have reaped the benefits of selling in the hot market, he said. But federal statistics show only one-third of East Palo Alto homes are owner-occupied, leaving a large population of renters left out of the real estate boom.
“It is a very strong reminder that we have to keep doing everything we can to preserve housing for the middle class, the working class,” said Abrica, who helped found the city in 1983. “That’s who we are.”
East Palo Alto will be joining an exclusive club in the U.S. — just under 200 communities in the country boast home values over $1 million. About one-third of those communities are in the Bay Area, with San Martin, Milpitas and San Jose recently added to the list.
The median home value nationally is $217,300, according to Zillow. The San Francisco and Oakland metro area has a median home value of $953,000, while the San Jose metro checks in at $1.3 million.
East Palo Alto has geographical advantages — set near the heart of Silicon Valley between wealthy Palo Alto and Menlo Park, easy access to U.S. 101 and Facebook’s expanding tech campus on its border.
But city educators say about 40 percent of the children in the Ravenswood City School District are considered homeless. The school district has expanded food pantry programs and built a free laundromat for needy families.
And the city’s violent history is never far enough past. It had the highest per capita murder rate in the country in 1992, when drug wars tindered violence in the small city and led to a homicide almost every week.
But the area has rapidly gentrified. Crime is down. Last year, the city had just one murder.
Omar Kinaan, an agent with Golden Gate Sotheby’s International, said buyers look to East Palo Alto for investment properties or good values. Bay Area home shoppers with $1 million to spend have fewer choices, he said.
“In our area,” Kinaan said, “it’s a challenging budget.”
Real estate agent Catherine Gortner started selling homes in East Palo Alto in 2003 to Stanford doctors and other professionals. Her mix of clients moving into University Square has become dominated by tech workers drawn by short commutes and bigger homes.Many families send their children to private schools or surrounding districts through a transfer lottery, she said.
Many of her original clients would have trouble affording East Palo Alto today, Gortner said. “It’s not surprising,” she said. “It’s not just East Palo Alto — it’s everywhere. That’s why people are leaving the Bay Area.”