Google announced a $1 billion investment to ease the housing crisis in the San Francisco Bay Area, pledging to add about 20,000 homes to the region over the next decade.
Google plans to convert at least $750 million of its own land into real estate to support 15,000 residential housing units.
About 7,000 people are homeless in San Francisco, while Silicon Valley companies have drawn fire for exacerbating a shortage of affordable housing in the region.
Criticized for pushing out poorer residents, Google on Tuesday announced a $1 billion investment to ease the housing crisis in the San Francisco Bay Area and to add about 20,000 homes to the region over the next decade.
As part of that effort, the internet company plans to convert at least $750 million of its own land, currently zoned for office or commercial space, to support 15,000 homes, according to a blog post from Google CEO Sundar Pichai. The technology giant will also establish a $250 million investment fund to incentivize developers to build an additional 5,000 affordable housing units.
“We hope this plays a role in addressing the chronic shortage of affordable housing options for long-time middle and low-income residents,” Pichai wrote.
Google joins other technology companies that have pledged to help create more affordable housing around Silicon Valley, where home prices have skyrocketed as the tech sector has grown. Facebook CEO Mark Zuckerberg and other local companies in January said they will raise $500 million to help fight the Bay Area housing crisis.
Google can easily afford the $1 billion it is earmarking for local housing — as of March 31 it was sitting on a pile of cash and securities worth $113 billion. The initiative could also soothe frustration with the company over what some see as a widening divide in Silicon Valley between highly paid tech employees and everyone else.
Experts have long criticized Silicon Valley tech companies for driving up real estate prices, contributing to an affordable housing crisis that is pushing middle- and low-income out of the Bay Area. Median home prices in San Francisco have surged 45%, from $936,000 to nearly $1.4 million, just in the past five years, according to Zillow. Meanwhile, about 7,000 people in San Francisco are homeless.
“For several months, we have encouraged Google to make a bold commitment to address our region’s affordable housing challenge,” San Jose Mayor Sam Liccardo said in a statement.
“We look forward to working with Google to ensure today’s announcement manifests into housing that will benefit thousands of San Jose residents struggling under the burden of high rents,” he added.
Pichai said the company will start construction immediately to make homes available in the next few years. The company is already looking to free up land for housing in Mountain View, Calif., where Google-parent Alphabet is based, and it’s in “productive conversations” with cities Sunnyvale and San Jose to do the same.