As the housing crisis reaches new levels of despair, Google is launching a $1 billion campaign to reverse the trend. The tech giant is pledging to use its vast capital and land holdings to build tens of thousands of homes throughout its main Bay Area jobs centers.
In a Tuesday morning blog post, Google CEO Sundar Pichai promised his company will build a minimum of 20,000 new homes, primarily near its corporate offices in Mountain View, San Jose, Sunnyvale and San Francisco.
Google's push for housing would address what some consider the biggest challenge faced by housing developers — securing land in an increasingly expensive real estate market. As the tech giant has expanded, it has ravenously acquired property across the Bay Area with the goal of eventually building enough offices to meet its rapid growth trajectory.
A large portion of that land would now be repurposed toward housing, Pichai wrote. At least $750 million of Google land currently zoned for commercial office space would be submitted for residential development. Pending approval by local authorities, this land could support at least 15,000 new homes for a variety of income levels, he said.
"We hope this plays a role in addressing the chronic shortage of affordable housing options for long-time middle- and low-income residents," Pichai said. "Across all of this, our goal is to help communities succeed over the long term, and make sure that everyone has access to opportunity, whether or not they work in tech."
On top of dedicating land, Google pledged to put forward $250 million as an investment fund to jumpstart affordable housing development across the Bay Area market. This money would be used as an incentive to encourage developers to build at least 5,000 affordable units, Pichai wrote.
A third plank of the housing campaign is a new $50 million housing investment in the company's charity arm, Google.org. The company's nonprofit would dispense this funding through grants to local nonprofits focused on addressing homelessness and displacement.
The news comes at a delicate time for Google when the tech giant is facing heightened scrutiny and calls for tighter regulation at nearly all levels of government.
Locally, the company recently faced immense pushback from San Jose residents over its plans to open a new 20,000-worker office park in the city's downtown. Last week, the advocacy group Working Partnerships USA released a study finding that nearby rental housing costs would likely increase by $235 million over the next decade if no residential growth was added to the plans. That would equate to a $816 annual rent hike for the average San Jose tenant.
In a Tuesday morning press release, Working Partnerships USA praised the new Google housing campaign.
"It's encouraging to see Google taking the concerns of local communities seriously by recognizing some responsibility for its role in our region's housing crisis," said Jeffrey Buchanan, Working Partnerships' director of public policy. "There is clearly still more it needs to do, but it's a very welcome first step."
Google's role in feeding the housing crisis in Mountain View has long been the subject of debate. As Mountain View's largest employer by far, the company employs nearly 25,000 workers locally, enough to occupy nearly three-quarters of the city's total housing supply. While Google attracts throngs of well-paid tech workers to the area, the lack of housing supply is a problem largely credited to decades of land-use decisions by elected officials.
Nevertheless, the tech giant has often been pointed to as the epicenter of the Bay Area's jobs-housing imbalance and its skyrocketing housing costs. Just last year, Mountain View voters approved a plan to begin taxing Google and other large employers based on their total employee headcount.
To a degree, Google officials have acknowledged the impact the company has on the area, and they have expressed a willingness to offset the collateral damage of the company's growth. Over the last four years, Mountain View has retooled its land-use guidelines for the North Bayshore neighborhood area based on Google's vision to build 9,850 homes near its corporate headquarters. As of February, Google representatives say they had to reduce those plans to 5,700 units due to the city's demands for various amenities. This housing would reportedly be included in the 20,000-unit goal of the new campaign.
As of Tuesday morning, June 18, Google officials could not give precise details on where they intend to build their stated goal of 20,000 units, or how it would break down between cities. At this point, company officials described it as a high-level plan that would be figured out in the coming months.
Google commitment of $1 billion in resources bears similarities to a $500 million pledge by Microsoft earlier this year to address the housing woes in the Seattle area. That investment was also premised on pressuring local policymakers to open up zoning rules to allow more housing.
Upon hearing the news, Mountain View Mayor Lisa Matichak said she was delighted. In particular, she touted the planned grants to address homelessness as something that Mountain View organizations should apply for.
"I appreciate the tech companies stepping up to provide resources to address the housing needs in the Bay Area," Matichak said. "It's a sizable investment that we will likely be able to leverage."