Google is the latest tech giant to announce an enormous investment in creating more housing. The firm announced on Tuesday it would be investing $1 billion to build housing in the Bay Area, where the steep cost of living and a shortage of new supply has led to an affordable housing crisis.
The plan will start with Google rezoning at least $750 million of the company’s land in the Bay Area over the next 10 years from commercial and office use to residential housing, according to a blog post on the firm’s website. The land will be used as the site for at least 15,000 new homes across the income spectrum, including middle and low-income families.
Google also plans to establish a $250 million investment fund that will offer incentives to developers to build at least 5,000 affordable housing units across the Bay Area. Additionally, the tech firm plans to give $50 million in grants through its nonprofit arm, Google.org, to nonprofit organizations that focus on homelessness and displacement.
One of the biggest employers in the Bay Area, Google said it will continue to work with local governments to support housing getting built quickly and economically. In Mountain View, where the company’s headquarters are located, Google worked with local officials to change zoning in the North Bayshore area in order to build more housing. The firm is also looking to make similar moves in the Silicon Valley towns of Sunnyvale and San Jose.
Committing to housing
The announcement comes nearly five months to the day after fellow tech giant Microsoft announced a $500 commitment to affordable housing in the Seattle area, where the company has been headquartered since 1979 and employs more than 130,000 people. Following in its footsteps, Facebook announced later in January that it would commit hundreds of millions of dollars towards affordable housing in the Bay Area as well, as one of several participants in the organization the Partnership for the Bay’s Future.
As the tech industry in the San Francisco region has exploded over the last decade, the cost of living has skyrocketed, causing the area to become one of the most expensive places to rent or buy housing in the U.S.
Christopher Ptomey, the executive director of the Urban Land Institute’s Terwillinger Center for Housing, told Multi-Housing News that while Google’s investment in housing is laudable, it’s just “a drop in the ocean” of California’s enormous and growing housing crisis.
“The scale of the crisis is so big that it has been estimated that it will cost nearly $13 billion to solve San Francisco’s homelessness problem, alone,” said Ptomey. “Even so, Google’s investment is an opportunity to demonstrate how the public and private sectors can work together to solve major social challenges. The ultimate impact of its investment will depend very much on if, how, and when the public sector enables development to happen.”