Google Pledges $1 Billion to Help Fight Bay Area Housing Crisis It Helped Create

Google on Tuesday pledged to spend $1 billion for housing in the San Francisco Bay Area.

Unprecedented in size and scope, the proposal to create 20,000 new homes is being greeted with wary enthusiasm, as it comes amid a regional housing crisis instigated in part by big technology companies like Google.

The tech giant said it will repurpose a minimum of $750 million of its own land over the next 10 years to support the development of at least 15,000 new homes "at all income levels," including options for middle- and low-income families. That entails rezoning some its ample land holdings from office or commercial space to residential use.

The company said it will also create a $250 million fund to provide developers with incentives to build 5,000 affordable housing units throughout the region, and dole out $50 million in grants to help address homelessness and displacement.

"Across the region, one issue stands out as particularly urgent and complex: housing," Google CEO Sundar Pichai said in a blog post announcing the plan. "The lack of new supply, combined with the rising cost of living, has resulted in a severe shortage of affordable housing options for long-time middle and low-income residents."

While saying that Google had already invested in "developing housing that meets the needs of these communities," Pichai acknowledged, "there’s more to do."

Some local leaders said the proposal was a sign of Google's commitment to supporting a region it has so deeply influenced.

“This is the antidote to Amazon,” said San Jose Mayor Sam Liccardo, referring to the blowback the Seattle tech giant experienced when it conducted a search last year for its new headquarters, hoping to find a city willing to offer major concessions in exchange for hosting it.

Google, Liccardo said, is going in the other direction.

"This is a company saying, 'We get it. There are real impacts from our growth on the affordable housing supply in your cities and we need to do more to help,' " he said.

Liccardo is also supporting a new Google campus slated for development in downtown San Jose that would relocate roughly 20,000 employees working around Santa Clara County. According to the company, some 50 percent of those people already live in San Jose. A report released last week by a local labor group found that the project would lead to major rent spikes throughout the city in the absence of strong affordability safeguards.

Google wouldn’t comment on the plan beyond what it described in Pichai's brief blog post.

Silicon Valley has the most expensive monthly median housing costs in the nation, according to Joint Venture Silicon Valley: $2,341 in the San Jose‐Sunnyvale‐Santa Clara metro region in 2017, compared to $1,567 in California and $1,048 nationwide.

"We are seeing an increase in the people that are living in RVs or other temporary shelters," said Rachel Massaro, director of research for Joint Venture, which publishes regular economic surveys of the Bay Area. "There are people that are living with other families. And we've also seen an increase in mega-commuters that are commuting into the region more than three hours daily just to work here and then living elsewhere."

The group also reported that affordable housing units represented only a small share of recently approved units in Silicon Valley. While there were more than 8,000 new Silicon Valley housing units permitted in 2018, it found that only 489 of them were affordable to those earning less than 50% of the local median income. (Disclosure: KQED's president sits on Joint Venture's board.)

Even groups that have long criticized the tech industry for the impact it has had on affordability in Silicon Valley welcomed Google's pledge — albeit with reservations.

"The proposed 20,000 housing units is actually close to what we and other organizations were asking for to offset the impact of Google’s proposed expansion in San Jose," said Sandy Perry, president of the Affordable Housing Network of Santa Clara County. "Google is suggesting that this donation will compensate for its growth throughout the entire Bay Area. We do not believe it is large enough to do that."

Alex Shoor, co-founder of Catalyze SV, a nonprofit that advocates for community engagement in development, said every large employer in the region should realize by now that the housing crisis is creating vast inequality.

"I hope more tech companies will say that, regardless of bottom line, this is a solution that requires solving, and that the resources can be marshaled and the political will can be built to get there," he said.