Google is the latest tech giant to make a big financial pledge for easing housing affordability.
This week, Google announced a pledge of $1 billion in land and money to build homes to help ease the housing crisis in the East Bay area. Google officials estimate that the fund the company will make to repurpose land could potentially add at least 20,000 homes in the Bay Area.
“We hope this plays a role in addressing the chronic shortage of affordable housing options for longtime middle- and low-income residents,” Sundar Pichai, Google’s chief executive, wrote in a blog post.
Google, Facebook, Apple, and Microsoft have headquarters around the San Francisco and Seattle areas, where housing is tight and prices have been run up from the high demand. A shortage of available land in Silicon Valley and Seattle is adding to the supply woes to accommodate employees.
Microsoft pledged earlier this year that it would be allocating $500 million to provide affordable housing in the Seattle area, where its headquarters are located. Mark Zuckerberg, Facebook’s chief executive, and other Bay Area philanthropists have committed $500 million to protect and expand affordable housing in the San Francisco area.
Google plans to repurpose at least $750 million from its $1 billion pledge for commercially zoned land it owns over the next decade. Google says it will work with local government to allow developers to lease the land to build homes. Google also plans to create a $250 million investment fund to provide incentives for developers to create more affordable homes in the area. Google said the fund could possibly help provide loans or make investments in projects that were geared toward affordable housing.
Pichai referred to Google’s announcement as a “$1 billion investment.” Google will not be donating the money since it will be making money off leases to developers or low-interest loans, The New York Times reports.
Google has recently proposed adding new offices at its headquarters in Mountain View. The company has been advocating for a mix of office and retail space along with residential properties. That represents a departure from the sprawling office parks that are common throughout Silicon Valley, NYT reports.
Source: “$1 Billion for 20,000 Bay Area Homes,” Google (June 18, 2019) and “Google Pledges to Invest $1 Billion to Ease Bay Area Housing Crisis,” The New York Times (June 18, 2019)
