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Here’s how much money Bay Area tech giants will invest in housing

Curbed logo Curbed 11/5/2019 Adam Brinklow
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The new trend in Silicon Valley is housing—not just building it, as many tech titans do, but also making attention-grabbing expenditure plans diverting billions of dollars into affordable housing development and other forms of housing relief for California.

Three major players in the tech set have promised seven-figure housing schemes just in the last four months, Facebook, Google, and most recently, Apple, which will double the housing investments from either of its prominent regional rivals.

While Gov. Gavin Newsom praised the tech giants’ housing patches, critics like Vermont Senator Bernie Sanders dismissed the spending as pure public relations, arguing that the money spent is relatively little compared to what such companies make via tax dodges.

Either way, it’s surprising that it took this long for the industry to make such a move, given the years of simmering discontent over the tech effect on California housing costs and the Bay Area’s population boom.

Google

In June, Google kicked off the rush with a $1 billion housing plan. CEO Sundar Pichai said that the Mountain View-based company would generate 20,000 homes in the Bay Area by 2030, three-quarters of them built on land owned by Google.

Although valued at $1 billion, the Google program includes only $250 million in direct funding of affordable housing. The rest is essentially made up of land grants, which Google will repurpose as residential housing. The company’s plans would need for cooperating cities to rezone areas first before proceeding with construction.

The 20,000 homes schedule comes out to roughly 2,000 homes per year. Most Bay Area counties currently add more housing stock than that figure in an average year, meaning that Google would effectively nearly double the rate of development in places like Alameda County or Santa Clara County.

Earlier this year, Google put $50 million into the nonprofit developer Housing Trust Silicon Valley. Most recently, the company said that it will invest $5.3 million in a 115-unit residential project in San Jose’s Japantown as part of its housing package.

Facebook

At the end of October, Menlo Park-based Facebook—in the midst of one bad PR storm after another, with founder Mark Zuckerberg pilloried in congress weeks ago—matched Google’s earlier offer with markedly similar terms, pledging $1 billion for another 20,000 homes regionally.

The Facebook budget has more moving parts compared to Apple’s, with one notable distinction being that a quarter of the cash going into a private-public partnership with the state.

Commenting on Facebook’s investment, Gov. Newsom said that “state government cannot solve housing affordability alone” and that California will have to rely on pubic partners in the future.

The social media mammoth also has $225 million going into land, singling out $25 million for housing for teachers and other “essential worker” in San Mateo and Santa Clara County schools. It also created a specific $75 million fund for housing near the company’s headquarters in Menlo Park.

Apple

Although Apple says its housing plan is valued at more than double both of its competitors’ (just the direct affordable housing fund part of the $2.5 billion scheme is itself $1 billion), the proposal laid out this week does not include any specifics on the number of homes.

Like Facebook, Apple opted to partner directly with the state of California on housing endeavors; it’s also specifically marking tens of millions of dollar for homeless relief.

Something else that neither Google nor Facebook addressed directly: Apple will plan a mortgage assistance program and help first-time homebuyers.

Given the association with the state, it’s worth noting that Apple’s $2.5 billion figure is bigger than California’s budget allocation for housing and homeless issues in the 2019-2020 budget.

It’s important to note that Washington-based computing giant Microsoft took the first whack at the housing crisis, announcing in January that it would invest $500 million in a loan and grant program aimed at affordable housing development and aid for the homeless. Amazon, also based around Seattle, built a homeless shelter inside one of its towering new offices.

For obvious reasons, neither of these companies are likely to spend directly on Bay Area housing in the near future, but their plans could help stimulate more Silicon Valley notables to make similar strides.

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