Google's project to build 15,000 homes in Bay Area hits snag
Add Axios as your preferred source to
see more of our stories on Google.
A protester carries an "Affordable Housing Now!" sign during a demonstration outside the Alphabet Inc. annual shareholders meeting in Sunnyvale on June 19, 2019. Photo: David Paul Morris/Bloomberg via Getty Images
Google's pledge to construct 15,000 new homes at a range of income levels across the Bay Area could face new hurdles now that the company has cut ties with its developer.
Why it matters: Google committed to an ambitious $1 billion project in 2019 to help address the Bay Area's housing crisis. Construction on the project had been expected to begin in the 2026 fiscal year.
Driving the news: Google and Australian construction company Lendlease announced earlier this month a mutual end to development agreements for four districts in San Jose (Downtown West), Sunnyvale (Moffett Park) and Mountain View (Middlefield Park and North Bayshore).
- Both organizations determined that "the existing agreements are no longer mutually beneficial given current market conditions," according to Lendlease.
- The move comes after waves of mass layoffs in the tech sector, including three rounds of cuts at Google since September.
What they're saying: Google is "looking at a variety of options to move our development projects forward and deliver on our housing commitment," senior director of development Alexa Arena said in a written statement to Axios.
State of play: The company is working with local governments to rezone $750 million worth of Google land. The partnership with Lendlease paved the way for the construction of up to 8,900 units in Mountain View and 4,000 in San Jose.
- Ending the agreement won't impact Google's project timeline, San Jose Mayor Matt Mahan said in a written statement to Axios. It "simply gives them the flexibility needed to get the best possible developers on the project," Mahan added.
- "Google has expressed its commitment to continue building housing in the Bay Area," Mountain View spokesperson Brian Babcock said in a written statement to Axios.
Yes, but: It's now unclear if the project will move along its expected timeline — or even at a fast enough pace. State regulators have ordered the Bay Area to build more than 440,000 new homes by 2031.
The big picture: Big Tech companies in the Bay have jumped into the fight against homelessness in recent years amid scrutiny of their role in driving up housing prices.
- Attracting high-paid workers to cities like San Francisco leads to an influx of wealth that incentivizes rapid gentrification and forces out existing residents, critics have said.
- Cupertino-based Apple said in July that it has deployed almost $1.5 billion to support affordable housing across the state.
- Meta, headquartered in Menlo Park, has taken similar steps, committing $1 billion in 2019 to create up to 20,000 units for essential workers.
- Industry leaders have, however, voiced opposition to other local efforts, such as a 2018 San Francisco measure to fund homelessness services by taxing wealthy companies.