Can Google’s billion-dollar investment help Bay Area housing crisis?

Google announced a bold investment in housing earlier this week, pledging a billion dollars to help construct new units in the housing-starved Bay Area and support programs to help the homeless. The pledge, revealed in a blog post by CEO Sundar Pichai, claims the commitment will add 20,000 new homes to the area over the next decade, including at least 5,000 affordable units.

The plan immediately led to speculation over how Google would accomplish such a feat, and how much of a dent this corporate charity would put in the longstanding affordability crisis. Does it represent a new era of corporate responsibility, or the kind of company town mentality—tech has all the answers—that has led the Bay Area to lean too heavily on a single industry?

While many details remain unclear—even Sen. Diane Feinstein can’t get answers—the sheer scale of the gift is remarkable, according to Teresa Alvarado, the San Jose director for SPUR.

“Tech has been criticized for operating at a global scale, and not recognizing that residents here, though wealthy, have weathered significant challenges,” says Alvarado. “This is a billion-dollar gift, the only one I’ve ever heard of on this scale, focused on the Bay Area.”

Alvarado believes it’s a game-changing investment.

“This sets a new precedent for how companies and cites should grow in an inclusive and sustainable way,” she says. “We’ve said yes to a lot of jobs in the Bay Area, but haven’t correspondingly grown our housing stock, which everyone realizes is a bad strategy. This changes the conversation.”

Significant, or symbolic, investment?

The impact of Google’s donation may largely rest on the ability to scale. The company has plenty of weight to throw around; last year, Google had earnings of $30 billion on $137 billion in revenues. But its most important asset may be land and political capital, not money. The tech giant has lots of land under its ownership, including parcels in Sunnyvale, San Jose, and Mountain View, much of it near jobs, providing an opportunity to create mixed-use areas.

The company may also have the power to push through zoning changes that have eluded previous developers, many speculate, due to its clout and land ownership. (Calls to city planning departments in Mountain View, Sunnyvale, and San Jose, to understand the process of rezoning and converting commercial to residential land, have not been returned).

Lack of money has never really been the main hurdle to build more housing in the Bay Area. But some say that even Google’s billion dollars wouldn’t be enough.

According to Danielle Hale, chief economist for Realtor.com, Google’s “laudable efforts” won’t be anywhere near enough to end the crisis in the Bay Area, or even put a significant dent in the problem.

“For context, the San Francisco metro area is on track to add between 14,000 and 15,000 housing units this year, with roughly one-third being single-family homes and two-third multi-family homes,” Hale says, for comparison. “This is less than one percent of the existing occupied housing stock currently in the San Francisco metro area. It’s important that Google is getting involved and taking steps to address housing, but the Bay Area’s high prices—$955,000 for the typical San Francisco listing and $1.167 million for the typical San Jose listing in May—will continue to be a challenge for everyone who lives in the Bay Area, whether they work in the tech industry or not.”

Alvarado argues that merely by making such a large financial contribution, Google is engaging with the problem and perhaps inspiring more members of the tech industry to step up. Taken in tandem with the January announcement that the new Partnership for the Bay’s Future aims to raise $500 million from high-profile donors—including the San Francisco Foundation, Chan Zuckerberg Initiative, Ford Foundation, and private partners like Facebook and Genentech—to build and preserve up to 175,000 households over the next five years, Google’s move may open the doors for more corporate giving.

“Over the last five years, tech companies have realized their relationship to their communities have changed,” says Alvarado. “Yes, issues like housing and transportation are in the realm of the public sector. But we have had bad planning in the Bay Area for 50 or 60 years. The private sector is realizing they need to be part of the conversation, and engage in solutions in a different way.”

Regardless of one’s take on Google’s plan, it clearly underscores the scope of the housing crisis, and how even a tech giant may not necessarily be able to innovate itself out of the issue.

As Daniel Herriges writes for Strong Towns, “the ‘innovation’ that the Bay Area needs to address its housing crisis is mostly political and social.” In the long term, Google’s move may be more of a statement, that local leaders have failed to take the appropriate action, and that somebody’s got to start somewhere.

Patrick Sisson’s wife works as a designer for Google. Any Curbed editorial covering Google, including this piece, is planned, reported, and edited without her involvement.

Article source: https://sf.curbed.com/2019/6/21/18701056/google-housing-bay-area-real-estate-big-tech-affordable

This entry was posted in SF Bay Area News and tagged . Bookmark the permalink.

Comments are closed.