Google promises to tackle San Francisco housing crisis with $1bn cash injection
The San Francisco Bay Area is in a state of flux with exorbitant rent hikes and an increase in homelessness potentially caused, in part, by technology companies which have made the area their home.
Recent estimates suggest that the average renter must make $127,000 a year in order to secure a modest two-bedroom home in the area, and Zumper -- a platform which tracks rent patterns -- estimates that it can cost as much as $3,700 a month for a one-bedroom apartment.
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Rent is rising and San Franciscans that are not on high salaries are suffering.
As reported by the San Francisco Chronicle, there seems to be no end to the pressure on renters in sight, and Google's proposed expansion in San Jose and Sunnyvale may cost renters an additional $235 million annually due to increased rent prices in the future.
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A lack of rent control and subsidized housing has caused a crisis for renters and may also have contributed to the area's increasing rates of homelessness. When it comes to the latter, the Bay Area Council Economic Institute estimates that it would cost up to $12.7 billion to resolve homelessness in the Bay Area today.
That's a lot of money to find, but Google, in part, is willing to foot some of the bill.
The tech giant, headquartered in Mountain View, Calif., will invest $1 billion to improve the housing situation across the Bay Area, Google CEO Sundar Pichai said in a blog post on Tuesday.
Pichai says that over the next decade, land belonging to the company once earmarked for commercial developments will be repurposed for residential housing. The executive says that the development of at least 15,000 homes "at all income levels" will be made possible through this move alone, which may also "play a role in addressing the chronic shortage of affordable housing options for long-time middle and low-income residents."
An additional 5,000 homes are planned through a $250 million investment fund aimed at developers willing to create affordable housing in the area.
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"In the coming months, we'll continue to work with local municipalities to support plans that allow residential developers to build quickly and economically," Pichai says. "Our goal is to get housing construction started immediately, and for homes to be available in the next few years."
Google also intends to give away $50 million in grants to non-profit organizations working with the homeless and those that have been displaced in the area.
"Our goal is to help communities succeed over the long term, and make sure that everyone has access to opportunity, whether or not they work in tech," the CEO added. "Solving a big issue like the housing shortage will take collaboration across business, government and community organizations, and we look forward to working alongside others to make the Bay Area a place where everyone who lives here can thrive."
20,000 homes will not be enough to resolve the crisis in the Bay Area but it is a start. However, a ten-year plan may not affect the plight of current residents -- one of which is Yolanda Chavez, a renter in San José.
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In an open letter to Pichai published on Medium, Chavez said that she was worried "Google is going to force me out of my home," and after 16 years of renting in the area, she has had to sublet both a bedroom and her living room to make ends meet -- and the prospect of Google's expansion in San José is of concern.
Chavez wrote:
"I would like Google to come to San José. I hope my sons can go to university and then get good jobs at the new campus. But I'm worried that won't happen if we're forced out before they can ever step foot on a college campus.
Mr. Pichai, in San José we care about our neighbors. If you want to come into our city, we expect you to do the same."
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