Google Commits $1 Billion to Bay Area Housing

If the rumors about housing in Silicon Valley are true, it is probably hard to recruit new employees if they fear they will have to live in an RV in WalMart's parking lot. Such a situation may have prompted Google to announce a $1 billion commitment to help provide more affordable housing in its backyard.

Google CEO Sundar Pichai announced the investment in a blog post on Tuesday, saying it is the company's responsibility to be a good neighbor in the area where it originated 20 years ago and where it is one of the largest employers.  Across the region, he said, "One issue stands out as particularly urgent and complex: housing. The lack of new supply, combined with the rising cost of living, has resulted in a severe shortage of affordable housing options for long-time middle and low income residents."

While appreciation has slowed significantly this year, prices in the area are the highest in the country. According to Zillow, the median home price in San Francisco in May was $1.36 million. Until recently, prices in San Jose were growing by 25 percent annually. This has forced lower-paid workers, including many municipal employees of area cities, to move further and further away to afford housing.

Google's investment won't come in one big check. Pichai said over the next ten years his company will repurpose at least $750 million of its land from its current office/commercial zoning into residential housing.  This should support the development of at least 15,000 new homes. These will be for all income levels including options for middle-and-low income families.

Next, they will establish a $250 million investment fund for use as incentives for developers to build at least 5,000 affordable housing units across the market. An additional $50 million will be available through Google.org as grants to nonprofits focused on the issues of homelessness and displacement.

In addition, Pichai said the company will continue to work with local municipalities to make changes that allow residential developers to build quickly and economically. "Our goal is to get housing construction started immediately, and for homes to be available in the next few years. In Mountain View, we've already worked with the city to change zoning in the North Bayshore area to free up land for housing, and we're currently in productive conversations with Sunnyvale and San Jose," he said.