Google announced Today that it will be spending $1 billion in land development to create affordable housing in its home town along San Francisco’s Bay Area.
Sundar Pinchai, Google’s current CEO, announced in a blog post indicating that the effort is part of their responsibility as “a good neighbor,” and also to address the growing housing issue that resulted from the tech company’s fast-paced growth.
Google, Facebook, Apple, and a few other start-up companies have concentrated in establishing their bases in and around San Francisco and Seattle. Overall, the big tech companies have provided thousands of jobs as they grew to massive proportions over the last two decades.
However, tech companies expand too fast to the extent where the community around them would hardly even notice and adjust. It leaves the residents and other business in a whiplash as they watch these companies turn into giants.
Specifically, housing and real estate have become a burden to most residents in places where big tech companies call their home. It’s either the lack of housing options or the uber-expensive rent rates.
As an effort to mitigate the pressing problem, Google said that it would personally use its resources to aid residents in California’s Bay Area. Ideally, Google will be able to support up to 20,000 new homes in the years to come.
The company plans to repurpose at least $750 million worth of commercially zoned land it owns over the next ten years, Pichai, said. This move will enable Google to support the development of at least 15,000 new homes at all income levels in the Bay Area, including housing options for middle and low-income families.
Also, Google plans to create a $250 million investment fund to provide incentives for developers to create more affordable homes in the area. Further, the project aims to provide at least 5,000 affordable housing units across the market.
Other than the $1 billion worth of resources, Google will also provide $50 million of grants to various non-profit organizations focused on the issues of homelessness and displacement through Google.org.
However, it is essential to note that Google will not be giving away all of these resources for free. Pinchai says that the effort of $1 billion investment for future affordable homes will be “rented out for lease.”
“We think Google got a lot right with their initiative,” says Kevin Zwick, CEO of Housing Trust Silicon Valley, which works on issues related to affordable housing.
Zwick explains that housing has drastically increased over the past decade because of the sudden demand for land with the influx of people coming to look for job opportunities.
Over the past eight years, the Bay Area has added about 676,000 jobs and 176,000 housing units. The National Low Income Housing Coalition said in a report that Bay Area counties account for five of the six most expensive places to live in the country.
Notably, the average cost of monthly rent in Santa Clara—a San Francisco County that Mountain View sits on—goes as low as $2,1333/month in East Foothills, or Alum Rock, where the average rent goes for $2,256/mo. The most expensive rental spaces in Santa Clara can go as high as $3,163/ month in Palo Alto, $3,235/month in Mountain View, and $3,370/month in Cupertino.
In Santa Clara County, rents raised 6% and 7% specific to Mountain View. With current prices, workers would have to make $54.60 an hour to afford a two-bedroom apartment.
Similar to Seattle, who is also a hub for big tech companies, is having a significant problem with housing. Specifically for people who don’t make enough money to afford them, at least in their city, an NBC said.
According to a GeekWire report, Seattle supports 165,264 high tech software and services jobs, representing 42% of all office jobs in the city. Some of the United States’ most significant and most influential tech firms call Seattle home or are significant employers in the area, including Amazon (approximately 40,000 people), Microsoft (around 45,000), Accenture (over 1,200), and Google (over 2,000).
Seattle Times also reported that rents in the suburbs and the broader metro area had soared 69 percent across Greater Seattle since 2010, more than double the national average of 32 percent.
Mountain View Mayor Lisa Matichak told ABC7, “the City is pleased to see Google, with such a large Mountain View and Bay Area footprint, take an active role in addressing this regional challenge. Mountain View has already cleared the way for robust residential development around Google headquarters, so we’re looking forward to seeing the details and what this announcement means for our City and others across the Bay Area. I am particularly happy to see the quick infusion of $50 million to nonprofits working on homelessness and displacement. We hope other corporate neighbors will join in addressing these challenging issues in the very near future.”