Google pledges $1 billion for rapid new housing growth in Bay Area | News | Mountain View Online |


Google pledges $1 billion for rapid new housing growth in Bay Area

CEO Sundar Pichai promises minimum of 20,000 new homes, primarily in Mountain View, San Jose, Sunnyvale and San Francisco

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 help 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, 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.”

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183 people like this
Posted by Adding Up
a resident of another community
on Jun 18, 2019 at 12:53 pm

Hmm. How many acres? For 15,000 new homes with a density of 75 units per acre, this would need to be 200 acres of land. At a value of $750 Million this would work out to $3.75M per acre. That seems low. Something is off between the two numbers that were given. 75 units per acre is very dense and would need a lot of city infrastructure improvements.

9 people like this
Posted by PA Resident
a resident of another community
on Jun 18, 2019 at 3:54 pm

All homes are not created equally.

Pack N Stack housing may suit some, but I would like to see improvements in transit from places like Morgan Hill and Gilroy to Silicon Valley.

Saying that, Google is doing the right thing here.

63 people like this
Posted by Adding Up and Subtracting
a resident of another community
on Jun 18, 2019 at 5:31 pm

Say Google is using 200 acres that "would have been offices" to instead create housing. It might need to be more to get 15,000 units. But each acre in offices has about 500 workers. So Supposedly they are saying they will actually hire 100,000 fewer workers. There's something fishy about this. They must have been hoarding more office land than they would ever need. This could all be a distraction, if they end up adding 500,000 more workers. What fraction of their land is involved?

170 people like this
Posted by SV Old Timer
a resident of another community
on Jun 18, 2019 at 5:56 pm

'Adding Up' touches on a valuable point. With all the burden that Google is already adding to the local communities the cities and county should be looking for upgrades or funds to improve water treatment, water distribution, sewer upgrades, road / public transit and other improvements. Right now it seems that their 'housing' plans only benefits their campuses and not the community at large to which they impact and belong.

106 people like this
Posted by SC Parent
a resident of Cuesta Park
on Jun 18, 2019 at 6:37 pm

$1B divided by 20,000 = $50,000 per housing unit. Divided by construction costs of 400 per square foot means that each unit would be 125sf.

Google's pledge is just a subsidy/incentive for other investors to build the housing. Google is not going to build much of this housing, if any, on its own.

4 people like this
Posted by The Business Man
a resident of Another Mountain View Neighborhood
on Jun 18, 2019 at 6:39 pm

The Business Man is a registered user.

First lets look at some facts:

$1 Billion divided by 4 cities is really only $250,000,000. Now if it costs $425,000 per unit based on the Terner Center study from Berkeley (Web Link) to build you will only result in 588 units.

Also $1 Billion is a very small amount of money to “promise”. This is because it had a NET PROFIT resource here (Web Link) provides 2001 to 2015 and this resource here (Web Link) for 2016-2018. The sum total comes to $155.17 Billion. This $1 Billion comes to only 1% of the total profit it has made. But this will be a loan so it will not come out in only 1 year of business. Simply put, it is a pathetic amount to promise given the resources they have.

Finally, it is just a pledge, there is so far no money at all yet provided.

Lisa Matichak said:

“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.”

No it is not, and it doesn’t add up either. Simply put 588 new units, they call homes will not even come close to what the City needs. And by the way the use the word “homes”, so are they going to build houses?

82 people like this
Posted by Schools?
a resident of Rex Manor
on Jun 18, 2019 at 7:22 pm

Please plan for the necessary "amenities" that will be needed to support all this new housing. Additional housing doesn't do much good if children are packed in overcrowded schools and there's no grocery store people can access.

5 people like this
Posted by Reality check
a resident of Old Mountain View
on Jun 18, 2019 at 8:51 pm

20,000 homes? A “home” is likely to be a studio or tiny 1br apartment. Assuming an average of 1.25 people per unit, Google is pledging to build out housing for 25,000 people. As we have seen before in MV, Google will only agree to fund housing if the cities agree to any of their office space demands. So, assuming it takes five years to build this housing in the Bay Area for 25,000 people, will they promise not to increase their staff by 25,000? (That includes contractors, which makes up at least half their global workforce!). Of course not! Google and other large tech companies will continue to do what is best for their business and grow, grow, grow.

This will make the imbalance worse, not better.

4 people like this
Posted by Adding Up
a resident of another community
on Jun 18, 2019 at 9:35 pm

I understood them to be saying that they would provide the land based on their having already locked it down for previous planned use as offices.

A lot depends on how long ago they bought the land and just what they mean. If it's a ground lease, that lease might be an ongoing cost for the housing. If they got a good deal this could be very valuable as all their purchases have driven up the cost of land in many different areas, particularly around downtown San Jose. Land there was likely acquired by Google at a steep discount from the value today.

If I had to guess, I would say a lot of this plan for housing is in downtown San Jose and in Sunnyvale, where they tied up a lot of land around Lockheed and Yahoo in an office park that was developed low density back in the 1970's and has only had light redevelopment. This is really very close to their main site in Mountain View and it is bridged by deals they have with NASA for land at Moffett Field.
The land in Sunnyvale may have also been bought at a steep discount from the present value. $3.5 Million per acre as an average price would be astoundingly good.

8 people like this
Posted by Greg David
a resident of Old Mountain View
on Jun 18, 2019 at 11:09 pm

Greg David is a registered user.

20.000 homes that people will own or 20,000 overpriced luxury ghetto apartments?

Google is not your friend.

Socialism is not the solution.

4 people like this
Posted by Christopher Chiang
a resident of North Bayshore
on Jun 18, 2019 at 11:31 pm

Christopher Chiang is a registered user.

What if $1 billion was spent on setting up land to allow RVs and tiny homes/modular that are also more mobile, with wrap-around services to make them appealing. In Las Vegas, Zappos has created a tech community around RV homes with their CEO living in one: Web Link

$1 billion can go so much further when supporting land that retains the future agile ability to be developed into something else.

11 people like this
Posted by oldabelincoln
a resident of Blossom Valley
on Jun 18, 2019 at 11:56 pm

We don't neeed more hosusing - we need fewer jobs. Move amy Google jobs to some other part of the US, please.

5 people like this
Posted by The Business Man
a resident of Castro City
on Jun 20, 2019 at 11:43 am

I am using a work system, I am registered.

What a joke!

The Google announcement stated:

“Google will, over the next 10 years, REZONE $750 MILLION WORTH OF ITS PROPERTY, most of which is currently zoned for commercial and office space. That means Google could knock down existing offices to enable housing.


Thus only $300 Million will be given to the 4 Cities, thus each will get $75 Million, and only $62.5 Million to new housing. If an apartment costs $425,000 per unit than there will only be 146 new units built. BUT IN TEN YEARS.

Lisa, what were you thinking regarding your claim this was a big investment in the city?

I think you should be more careful regarding your assessments.

2 people like this
Posted by The Business Man
a resident of Castro City
on Jun 21, 2019 at 8:03 am

This City has been acting like an old western.

They don't do anything to fix the problem they made in the first place.

Then expect a "lone ranger" to ride into town and magically solve their problems.

Our city council resembles the town in Blazing Saddles.

"You've got to remember that these are just simple farmers These are people of the land The common clay of the new West You know...."

That's all 

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