News

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

CEO Sundar Pichai 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 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, Google.org. 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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Mark Noack writes for the Mountain View Voice, the sister publication of PaloAltoOnline.com.

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Comments

40 people like this
Posted by Stuck in Traffic
a resident of Leland Manor/Garland Drive
on Jun 19, 2019 at 12:40 pm

They say they will build new 'homes'. But what they really mean is apartments, and mostly for rent to singles/couples here only to work, and not to build community.

The remainder will likely be spent on luxury condos, not affordable for people that were born and raised here, and with family still living here.

One billion dollars, divided by four cities (Mountain View, San Jose, Sunnyvale and San Francisco) is not that much.

Google will want even more office space now. Cities, stars in their eyes over Google dollars, will sell residents out.

Enough is enough. Big Tech needs to stop. MORATORIUM on office space. Common sense, in building more residential property.


3 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jun 19, 2019 at 12:53 pm

How about they (long term) lease some land in the SRP near ECR/Page Mill/Cal Ave for this purpose as well? Easy walk to Caltrain.


18 people like this
Posted by How much per housing unit?
a resident of Another Palo Alto neighborhood
on Jun 19, 2019 at 12:55 pm

Although $1 billion sounds like a lot, it does not go as far as one might think. A current proposed low income housing project will cost $700,000 per unit. (The mostly market rate housing proposed by Google will cost even more.) So it will cost at least $14 billion to build that housing.


9 people like this
Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jun 19, 2019 at 1:48 pm

Resident 1-Adobe Meadows is a registered user.

The question on the table is if PA is in negotiation with Google on any land at this time in PA. There are now buildings in the PA Business Park at San Antonio and 101 with Google bus pick-up signs. Google has bought the SSL site on Fabian Way. We all need to understand what the impact is on PA at this time since we are in arguments on housing at CUB and other locations which are PA owned land. So how many "deals" are ongoing at this time in PA. The city needs to lay out what the status of areas ripe for renovation - like Fry's. The city has it's own goals and requirements to meet on it's own. Let's not mix goals here since PA is answerable to government agencies which have levied some requirements to meet. Google housing cannot be used to meet our city goals.


15 people like this
Posted by Joe Traveho
a resident of Mountain View
on Jun 20, 2019 at 10:23 am

Transit is a big deal with a development like this. Google is proposing to put housing next to the jobs, which is an excellent smart-development approach. Having thousands of housing units within easy walking distance of effective public transportation helps as well. A VTA stop for instance. The increased traffic would help justify increasing frequency (every 8 to 10 minutes during the day is needed for people to take transit seriously).


3 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Jun 20, 2019 at 12:46 pm

Posted by Joe Traveho, a resident of Mountain View

>> Transit is a big deal with a development like this. Google is proposing to put housing next to the jobs, which is an excellent smart-development approach.

It is a start, but, unless these are chaparoned single-sex dorms such as those provided in Shenzhen by the big manufacturers Web Link , then, there are likely to be couples of some type living there. It is likely that the SO's are not Google employees. They will likely be commuting to another location. So:

>> Having thousands of housing units within easy walking distance of effective public transportation helps as well. A VTA stop for instance. The increased traffic would help justify increasing frequency (every 8 to 10 minutes during the day is needed for people to take transit seriously).

Agreed, these "company towns" still require public transit for the SO's, as well as the occasional foray to the outside world. Still, it is a start.


17 people like this
Posted by Old Joe
a resident of Barron Park
on Jun 20, 2019 at 1:36 pm

Housing is in a free fall. Half, one and one point five million dollar price cuts in Barron Park. Home buyers are loosing their shirts. The elderly are seeing their nest eggs evaporate. This area is no longer attractive and the quality of life is well below that of neighboring cities. So long Palo Alto. It was nice knowing you before all this mess was allowed to happen. Sure, build more housing. More people and can s and congestion please.


5 people like this
Posted by Hugo
a resident of Midtown
on Jun 20, 2019 at 2:16 pm

How much would it cost to build an apartment building/dormitory? Let's say a 12-story building with, say, 20 units per floor, or 240 units? At 2 occupants per unit that gets 480 folks out of their RV's. Build it on Google property so the cost of land is $0 and employees could walk/bike to work with no strain on public transit. Yes, it would be a medium-high-rise. Horrors! There are worse problems in this world than a high-rise in Googleville.

Look, if Stanford can build housing for its students and Google can afford to lease Moffett field for its fleet of private jets, a simple apartment building should be a cakewalk.


1 person likes this
Posted by Hugo
a resident of Midtown
on Jun 20, 2019 at 2:42 pm

This says the national average ranges up to $86,100 per unit:

Web Link

Let's round it up to $100,000 per unit because this is Silicon Valley. 240 such 750-square-foot units x $100,000 = $24 million for 240 units (12 stories x 20 units per story). Underground parking, don't forget that. Drive the piles all the way down to bedrock so the building doesn't tilt like Millenium Tower in the city.

$24 million is chump change for Google. They could build several such buildings for $1 billion. Put a Safeway on the ground floor of one of them.


7 people like this
Posted by Paly Grad
a resident of Leland Manor/Garland Drive
on Jun 20, 2019 at 3:24 pm

In San Francisco it's estimated to cost $600,000 to $800,000 per unit for affordable housing:

"In San Francisco construction costs are up more than 50 percent since 2015, and recently edged out New York City as the highest in the country. A unit of affordable housing costs between $600,000 and $800,000 to build, depending on building type and materials."

Web Link


5 people like this
Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jun 21, 2019 at 10:21 am

Resident 1-Adobe Meadows is a registered user.

So this whole topic in effect says that the number of residents in PA, specifically south PA is going to increase. That means that Cubberely is going to be needed, as well as Greendell for the increase in population. Any attempt to gut the educational elements of PA at this time is counter to common sense. Spending money on elaborate housing plans at CUB is also counter to common sense. It is not going to happen. It appears that the corporate and city interests are proceeding and well able to take care of their requirements without adding CUB to the mix. The PAUSD has to take care of it's requirements. We are not throwing the city and schools down the "housing" hysteria without some comprehensive planning. The divide and conquer element is well at work here. We don't pay the city for divide and conquer.
Time to go back to the FRY's site which is enormous. You all can stuff all of the low income, high income, old people, and major grocery market into that site. Also connection to Cal train, possibly move it from California Avenue.


5 people like this
Posted by Kenny
a resident of University South
on Jun 22, 2019 at 12:20 pm

"How about they (long term) lease some land in the SRP near ECR/Page Mill/Cal Ave for this purpose as well? Easy walk to Caltrain."

And also Downtown, as there is a Caltrain station there, too. Not to mention all the restaurants nearby, who would greatly benefit from the additional business.


1 person likes this
Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jun 22, 2019 at 11:43 pm

Resident 1-Adobe Meadows is a registered user.

At the Fry's site you could put in 4 four story buildings - one for low income and teachers, one for old people with a medical center on the first floor, a more expensive tower for high end techies, and a tower for low end techies. Each would be modified to expand or reduce the size of the condos. Maybe a day care center in one of them. Maybe a nice restaurant and bar in one, and a grocery store on the site as well as cleaners and coffee shop.


1 person likes this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jun 23, 2019 at 8:29 am

Or how about housing at the Ming's site instead of a car dealership. Low income housing, space for teachers and first responders, as well as condos with easy bike ride to Google or Facebook.


8 people like this
Posted by Resident
a resident of Midtown
on Jun 23, 2019 at 3:08 pm

"nooooooooooooooooooo"
$1 billion to bring millions more people into an already severely crammed, congested place with an exploding population.


"ah but they'll ride bicycles and trains!!'


Perish Google


2 people like this
Posted by Hugo
a resident of Midtown
on Jun 23, 2019 at 4:27 pm

"$1 billion to bring millions more people into an already severely crammed, congested place with an exploding population."

I don't know where you get the idea that the $1 billion will be used to bring in more people. They might be trying to house people who are already here, living on the streets in RV's.

"ah but they'll ride bicycles and trains!!"

You forgot self-driving cars.


9 people like this
Posted by C. Walters
a resident of Charleston Meadows
on Jun 24, 2019 at 9:38 am

@Old Joe

Housing is in a free fall. Half, one and one point five million dollar price cuts in Barron Park. Home buyers are loosing their shirts. The elderly are seeing their nest eggs evaporate. This area is no longer attractive and the quality of life is well below ... “

Right on brother!
My neighbors are in a panic and trying to list before August.
The guy down the road has lost $350k on paper since last fall.
Gotta love the PACC for destroying homeownership in PA. A crash is coming. Watch for the foreclosures and bankruptcies to hit the valley. First time buyers beware.


9 people like this
Posted by Anneke
a resident of Professorville
on Jun 24, 2019 at 1:34 pm

Will we have enough water for all?


4 people like this
Posted by Curious
a resident of Duveneck/St. Francis
on Jun 26, 2019 at 1:14 pm

I see $50 million donated by Google “for homeless services.” Small piece of the pie - but, still!
That IS a lot.
We also know every entity known to people here, such as Santa Clara County, San Francisco, State of CA, etc., etc. is funding tend of millions over the recent decades for “the homeless.” Or, the homeless industrial complex, it appears.
Unemployment is at a record low and the economy is mostly very strong.
So - clearly - we are ATTRACTING numerous new persons: “the homeless” - as in those who choose not to work, to live rough, to take hard drugs, who refuse mental health treatment TO our state, region, and local cities.
This is out of hand. This is abuse of the system.


Like this comment
Posted by Hugo
a resident of Midtown
on Jun 27, 2019 at 5:29 pm

"In San Francisco it's estimated to cost $600,000 to $800,000 per unit for affordable housing:"

One billion dollars / $800,000 per unit = 1,250 units. At 20 units per story you could build 62.5 stories or four 15-story buildings. Put a Safeway in the ground floor of one of them. If some of the units house one person and some house two, you could house about 1500 - 1800 people.

That's the conservative estimate using the higher figure for S.F.

Google has the land and the money.


3 people like this
Posted by Long Time Resident
a resident of Old Palo Alto
on Jun 27, 2019 at 9:27 pm

Google (and other companies) may have the land and money, but they don't have the water. Water will be the limiting factor.
Tech is not "green". Tech is not carbon neutral. It requires massive amounts of energy and water.
The panels and windmills are just for show - to create the illusion of being clean and green.
This area won't have enough water to get us through the next drought.
Poster Anneke is correct.
The tech companies have been setting up huge data centers and operations in other states - exploiting their groundwater supplies, and less restrictive energy supplies.
What they are doing is not sustainable.


Sorry, but further commenting on this topic has been closed.

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