Nov 13, 2023 - News

Google's project to build 15,000 homes in Bay Area hits snag

Photo of protesters holding signs calling on Google for affordable housing

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).

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.

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