Google has announced that it will spend $1 billion on efforts aimed at increasing affordable housing in the San Francisco Bay area. Part of the plan is to utilize some of Google’s land.
The company plans to use around $750 million worth of commercially zoned land it owns over the next 10 years. The second part of Google’s plan, over the next ten years, Google will establish a $250 million investment fund aimed at providing incentives to enable developers to build at least 5,000 affordable housing units across the market.
“Today, Google is one of the Bay Area’s largest employers,” said Google CEO Sundar Pichai in a statement. “Across the region, 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. As Google grows throughout the Bay Area—whether it’s in our home town of Mountain View, in San Francisco, or in our future developments in San Jose and Sunnyvale—we’ve invested in developing housing that meets the needs of these communities.”
The Bay Area is one of the most expensive areas in the country. Despite a 39% increase in inventory and an ongoing increase in affordability within the San Francisco Bay area, many homeowners and potential homeowners are still finding the area unaffordable. Google hopes its plan will address the shortage of affordable housing options for long-time middle and low income residents, as inventory continues to slip in California.
According to CoreLogic, the six-county Southern California region recorded a 14.1% decrease in new and existing home sales in March, and San Francisco reported just 6,124 new and existing home sales occurred in March, resulting in a 14.8% decline year-over-year. To combat the new and existing home sales problems, Pichai states that Google will “work with local municipalities to support plans that allow residential developers to build quickly and economically.”