Palo Alto is the center of the world and technology. At least according to Kim Heng, head of marketing at DeLeon Realty. In Heng’s eyes, and in the eyes of the real estate world, the city has everything to offer: a robust education system, a world-class university, wealthy venture capitalists. The list goes on.
Recently, however, Palo Alto seems to be appealing to an international crowd. Specifically, Chinese home buyers.
“Palo Alto has first of all, beautiful weather and geographically it’s very convenient for Chinese to fly over – it’s just a direct flight,” Heng says. “And Stanford University is right here. Everyone [in China] knows Stanford University. Parents dream to send their kids to Stanford.”
The influx of Chinese buyers in the area has some residents up in arms, complaining that their neighborhoods are being taken over by foreigners. According to Heng, the number of Chinese home buyers has increased by 15 percent in the past two years.
This change can also be seen directly in the demographics in Palo Alto Unified School District schools over the past five years. According to the California Department of Education, Asian students made up only 26.8 percent of enrolled PAUSD students in 2008. By 2013, the number had risen to 32.8 percent, a six percent increase.
According to Debra Cen, co-founder of the Palo Alto Chinese Parent Club, the change will present challanges to which the community must adapt.
“The new immigrants may behave differently from the locals due to the culture difference and ignorance of American culture and local tradition,” Cen says. “Therefore, it is important for our community to reach out to help them to understand how American society works.”
Nearly everyone is a foreigner in Palo Alto, themselves or their ancestors having immigrated to America at one point or another. In Cen’s opinion, the new wave of Chinese immigrants is no different than the scores of foreign groups who have preceded them.
“American [society] is a society for equality,” Cen says. “The new immigrants [come] like older-generation immigrants came to pursue their American dream. They certainly should be treated like everyone else.”
Understanding the Issue
Immigrant groups are attracted to America for many different reasons. The Irish flooded New York’s shores in the late 1840s, fleeing the Potato Famine. Recently, Latin American immigrants have come north of the border seeking better jobs.
One of the draws to the Silicon Valley area for Chinese buyers is the opportunity to invest. The recently booming Chinese economy, according to Heng, has produced nearly one million millionaires, many of whom look to buy foreign properties as a means of stabilizing their investments.
“They like to diversify their risks, so buying real estate property is the best way to do that,” Heng says.
In addition, American real estate laws are more attractive, as they allow the buyer to own the land as well as the house.
“The U.S. has a really complete real estate law,” Heng says. “[Chinese buyers] feel like they own the land. When you buy property in China, you don’t own the land, the land is on a lease.”
But the main pull of Palo Alto does not draw investors; instead, it attracts families.
“The reason [families] are attracted to this area is because, a lot of them, they want to send their kids to good schools,” says Lan Liu Bowling, a Palo Alto realtor. “We have really the best unified school district in the area.”
Palo Alto’s emergence as a destination for Chinese families seeking an American education for their children can be attributed to the quality of the Palo Alto Unified School District. While PAUSD schools are not as math-heavy as some of China’s, they offer the students a more balanced education.
“First off, they can learn English,” Heng says. “Also, they are exposed to different ways of thinking. How open and forward-thinking this area is, it just helps them … In China, it’s more leaning towards science and math and physics. Here, I think education is more well-rounded.”
The Palo Alto Market
The impact of foreign buyers on the housing market in Palo Alto has been significant. According to Bowling, the median price of homes went up over 20 percent last year.
“While foreign buyers have contributed to this increase they certainly do not account for all of it,” Bowling says. “Palo Alto has seen many such increases in times past and there have always been people who are willing to pay a higher price to live here.”
To Bowling, the rise in the housing market comes as no surprise. According to her, the market requires an adjustment every eight to 10 years. After housing prices fall, the prices are adjusted and begin to rise again.
According to Bowling, the current surge in prices we are seeing is the result of an adjustment after the economic crisis of 2008, while higher prices themselves do not boost the economy, the two go hand-in-hand.
“I don’t think that you can say that rising house prices actually help the economy – I think it would be more accurate to say that rising prices, like many other things, are an indicator that the economy is strong,” Bowling says. “Prices will only rise when lots of people are working at good paying jobs, when people’s belief in the future is positive, and there are many people whose financial situation is improving.”
While the growing economy improves the real estate business, it may pose a threat to lower-income workers in Palo Alto looking to buy property.
“A serious downside exists for many people who cannot afford the higher prices, Bowling says. “This means that some of the most important people in a community, for example teachers, city employees, and service workers in the private sector cannot afford to own homes in the local community and must travel in from some distance. This is a negative effect that should not be forgotten when people say the economy is ‘strong’.”
Chinese Parent Club
Assimilation into the Palo Alto community is no easy task for the new Chinese immigrants. Cen, along with other co-founder Amy Yang are both Chinese-born, but now reside full-time in Palo Alto. According to them many of the immigrants do not know English and are unfamiliar with American culture, making integration into the Palo Alto comunity difficult. However, Cen and Yang believe that community efforts and programs can help these immigrants fit in.
“Because they are not educated here, they know very little about American culture,” Cen says. “We thought, ‘One way to keep Palo Alto culture and tradition is to educate and integrate them into our community,’ so we started a parent club to educate them on American culture.”
The Palo Alto Chinese Parent Club aims to give social and educational assistance to new Chinese parents in the area. One major method for helping these parents become accustomed socially is to first help their children to socialize.
“To new immigrant parents, changing their behavior and getting them to integrate, the biggest motivator to do that is kids,” Cen says. “They will change their behavior, they will be motivated to participate in things. If they were told, ‘It’s good for the kids,” they would do it. These are successful people. They want to be respected and they want to be accepted.”
In particular, the Chinese Parent Club hopes to improve the social skills of the new Chinese children coming to Palo Alto schools, in hopes that they will in turn encourage their parents to step out of their comfort zones.
“We did a survey, now over 80 percent of parents, their No. 1 interest is how to help their kids develop social skills,” Cen says. “Chinese academically usually are pretty good; their parents know how to push them. But socially, the parents are not so familiar with the culture here, so they don’t know how to help them develop social skills.”
Both Cen and Yang believe that the programs such as theirs will have a positive impact on the rising number of immigrants coming to Palo Alto. However, they fear that the city is not doing enough to accomodate the new Chinese and welcome them into the community.
“Honestly, from both of us, we feel like Palo Alto is not ready, at least not prepared, for the new surge [of immigrants],” Yang says. “The Chinese population is growing so fast.”
Cen echoes her fears, underlining the need for action from the city and the school system.
“There [has been] no city action…so Amy and I, we realize the urgency,” Cen says. “I think it’s very important for the schools, for the city, to start some program to help integrate these people, because you cannot stop them. You’d better embrace them.”
Cen and Yang do not believe, though, that this negatively changes the dynamic of the community. Instead, they see the increasing number of immigrants as a chance for Palo Alto to grow.
“I think you should look at it as an opportunity, because these people come legally, and they came bringing the money to the community,” Cen says. “Certainly, the sudden surge in numbers looks like it poses a threat of changing the demographic and the culture, and I think realizing that, we should do something to bring these people into the community.”
Through the club, the two have discovered that while these immigrants are motivated to join the community, they are at the same time apprehensive.
“It’s not like they don’t want to join the block party or they don’t want to be shaking hands with the neighbors,” Yang says. “They just move here, it’s a new thing for them. They are still learning how to be social with Americans. It’s like the new kids on Paly campus. The kids, they want to mingle, but they are probably afraid.