By Sean Hollister for The Verge
In 2014, The Verge reported how Google had effectively created its own island in Silicon Valley, something akin to a company town, exacerbating a housing and traffic crisis that now characterizes much of the San Francisco Bay Area — the place with the highest housing costs in the nation.
Now, Google CEO Sundar Pichai is announcing the company’s biggest commitment by far to fix its broken backyard: a $1 billion investment over the next 10 years to build some 20,000 units of housing.
According to the official Google blog post, the new commitment includes:
- $750 million worth of the company’s existing office space, which Google will convert into an estimated 15,000 units
- $250 million toward “incentives” for other developers to build 5,000 units of affordable housing
- $50 million to nonprofits that help the homeless find shelter
That sounds good! But let me bring you down to reality with some more bullet points:
- We were already expecting Google to free up as many as 9,850 units in its Mountain View backyard, with Google offering to build some 5,700 itself. (The company leases a lot of property, too.) Google tells The Verge that plan hasn’t yet been approved by the town, but whatever housing it builds in Mountain View is included in this total.
- This is an investment, not a charity. Google says it’s leasing this land to developers who will rent and sell units — you know, for money — and won’t restrict what they do with it. That does mean no explicit preference to house Google employees, though, and cities will require a certain percentage to be affordable housing. Google proposed 20 percent affordable housing in Mountain View.
- We’re not talking about single-family homes. Google simply doesn’t have enough office space for 15,000 traditional homes, so it’s going to need to build upward. Expect apartments and condos in multistory units.
- We don’t know where they’ll be. Optimally, Google can help Bay Area traffic woes by building housing close to its big campuses, and that’s likely, but Google says they could be anywhere in the Bay Area it has office space. The details are up in the air as of today.
- Google won’t be building 5,000 units of affordable housing itself. The $250M will help developers secure land and permits for affordable housing, incentivizing developers to build.
- This is a 10-year commitment, all while Google keeps growing. In addition to its holdings in Mountain View, San Francisco, and generally across 24 of the 50 US states, the company’s planning a whole new giant campus in San Jose.
If you want more insight into the kind of relationship that Google believes it can have with the Bay Area, take a peek at the company’s pitch to transform North Bayshore (that’s the portion of Mountain View that Google primarily occupies) with housing, $77M for transportation, plus parks, schools, and more. There’s also a North Bayshore FAQ you might want to read — it explains why Google’s offering 5,700 units there, not 9,850.
But you also might want to think about how Google tried to use housing as a bargaining chip to get more Bay Area office space to begin with — and the damage that big companies like Google can cause if they wind up pulling out of a major infrastructure project early.