Billionaire John Sobrato Is Leasing His Land for $1 to Tackle Homelessness

If successful, the temporary leasing of private land for interim housing could become a mainstay in San Jose.

John Sobrato, a Silicon Valley real estate developer, is experimenting with a new way to tackle homelessness in the Bay Area. For just $1 annually, the billionaire is leasing more than two acres of his land to serve as the site for a temporary 150-bed housing project in San Jose, California.

View of San Jose cityscape surrounded by hills
The proposed site is a more than two-acre plot in San Jose, California. Tim de Waele/Corbis via Getty Images

The project, which was unanimously approved yesterday (Oct. 17) by the San Jose City Council, could lead to more innovative housing solutions in the region. “It gets private property into the effort to end street homelessness,” said San Jose Mayor Matt Mahan during the council meeting. “There is a lot of underutilized privately held property that up until this point has sat on the sidelines because there hasn’t been a good replicable model for getting those private property owners engaged.”

SEE ALSO: The Young Billionaires Who’ve Pledged Away Their Wealth

Sobrato, who has an estimated net worth of $5.3 billion, is the founder of the Sobrato Organization, a real estate company that counts Netflix, Apple and Amazon among its tenants. He first proposed the housing project back in March, calling up Mahan to offer up his land after learning about the city’s struggle to find viable interim shelter sites for its population of approximately 4,400 homeless people. The plot of land is in South San Jose and will be used for interim housing over a five-year lease, after which it would be used for private commercial or industrial purposes. Construction of the quick-build shelter is scheduled to be completed by mid-2024. If the project is successful, San Jose may consider rotating similar communities around the city as private property sites become viable for development, according to Mahan.

In addition to the $1 leasing of Sobrato’s land, $3 million in discounts will be provided by housing developers, architects and construction companies working on the venture. Taking into account the construction and relocation of the shelters, the entire project is expected to cost about $18 million. Named Via del Oro, it will consist of 75 two-bed cabins and 15 duplex-sized ones, in addition to amenities like bathroom units, laundry, kitchens, outdoor seating and parking. Via del Oro planners are also considering running the quick-build shelter with an off-grid solar electrical system.

A history of philanthropy in the Bay Area 

Sobrato’s offer “complements the Sobrato Organization’s broader Housing Security Initiative, a pilot program to address housing insecurity in Silicon Valley through a three-pronged approach that includes preservation, production, and pro-housing policy,” said his son John Michael in a statement. For this initiative, Sobrato in June acquired an old apartment complex in Santa Clara at $26.1 million. Instead of introducing the major upgrades often undertaken by developers as a way to raise rent, Sobrato announced he would only make necessary improvements in a bid to keep rent affordable for its 68 units.

The billionaire is also on the board of Destination: Home, a nonprofit working to end homelessness and previously donated $5 million to a homeless housing facility in San Mateo. Other major donors must focus on the housing crisis so that the Bay Area doesn’t remain “an area of haves and have-nots,” he told the San Jose Spotlight in 2021. “Philanthropy has to step up and help these people.”

Sobrato’s charitable efforts extend beyond housing. Donating upwards of $100 million annually through the Sobrato Family Foundation, which was launched in 1996, his notable gifts have included $20 million in funding to the Lucile Packard Children’s Hospital and a $100 million donation to his alma mater, Santa Clara University. The real estate mogul has committed to giving away 100 percent of his wealth during his lifetime and is a signee of the Giving Pledge alongside his wife Susan and son John Michael, making them the first multi-generation family to join the philanthropic campaign.

Billionaire John Sobrato Is Leasing His Land for $1 to Tackle Homelessness