Tech firms’ housing pledges coming up short

Two years after vowing to build tens of thousands of new homes, Apple, Google and Meta have made little progress so far

National Issue /
Jan.January 07, 2022 05:00 AM
(Photo-illustration by Paul Dilakian)

Two years after Apple, Google, and Meta vowed to spend $4.5 billion to create more than 40,000 new homes in their home state of California, they’ve accomplished a fraction of that goal.

Meta, which aims for 20,000 new homes by 2029, has so far granted loans from a fund it seeded for just 750 planned affordable units. Google, whose parent company is Alphabet Inc., envisions as many as 15,000 homes on company-owned land — and it’s gotten approval for only a quarter of them. A supportive housing project seeded by Apple that’s set to open early this year in Pittsburg, 40 miles northeast of San Francisco, will have just 30 units. All told, the three companies have funded 1,500 completed homes.

The meager progress reflects the difficulty of creating new homes in the pandemic era, not to mention restrictive housing laws. Yet it’s also a reminder that for all the praise showered on Big Tech in 2019 for decade-long commitments to tackle California’s housing crisis, most of those much-needed homes probably won’t welcome new residents for several more years — assuming they’re built at all.

Help can’t come soon enough. In the Bay Area, self-driving cars designed by people who work for billionaires whiz through streets lined by rows of long-parked recreational vehicles, their blocked windows a telltale sign that they’ve become homes for workers who can’t afford to buy some of the nation’s priciest real estate or pay rents that jumped by about 70 percent in both San Francisco and San Jose, the region’s two largest cities by population, from 2010 to 2019.

One night in late December, more than 40 recreational vehicles and trailers lined Crisanto Avenue in Mountain View, about two miles south of Google’s headquarters. Oversized vehicles are technically prohibited there after the city reapproved a ban on RV parking along most of its streets at the end of 2020, although enforcement has been delayed, the Mountain View Voice reported last month. 

It will take more than pouring cash into funds for affordable housing or assisting first-time home buyers to move the needle on California’s slice of a worldwide housing crisis so dire that the United Nations calls it a violation of human rights. The state also must figure out how to alter long-standing policies such as minimum lot sizes and single-family zoning rules that cities enacted to limit the potential of overcrowding and preserve “neighborhood character.” 

It isn’t just zoning laws. In the last two decades, tech companies have hired hundreds of thousands of workers and bestowed billions of dollars of compensation to top executives and engineers who bid up prices. Builders focused their efforts on market-rate homes, because that’s where the profits are. 

In the past decade, the Bay Area has produced eight jobs for every one new housing unit, said Michael Lane, state policy director at SPUR, a housing and policy think tank. The median price tag for single-family homes stands at $3.8 million in Palo Alto and more than $1.4 million in San Jose. The deficit of affordable housing has forced some workers to put up with one-way commutes of two hours or more. While California is home to many of the nation’s wealthiest people, factoring in housing costs gives it the nation’s highest poverty rate.

Anyone who wants to be part of the solution, be it Meta, Google, Apple, you name it,” said Buffy Wicks, a State Assembly member who chairs the Housing and Community Development Committee. “We welcome them to the conversation and appreciate their financial resources. But certainly I think more can be done.”

Granted, even the best-intentioned builders”: amend to “Granted, even the best-intentioned builders have had to cope with Covid-induced construction delays and supply-chain logjams. And even in the best of times, two years isn’t long enough to complete the Herculean task of getting new housing approved and completed in California — especially homes for people earning less than the Bay Area’s median income of about $112,000. It takes about six years to complete such projects, a timeline that’s doubled over the past two decades, First Community Housing’s Geoffrey Morgan, who heads one of the region’s largest affordable-housing developers, told NBC Bay Area last July.

The tech companies say that the housing projects announced so far are the first phase of what will be a wave of new homes. Google, for example, has helped fund 2,700 planned homes through loans as of June, representing more than half of the 5,000 residences in which it’s pledged to invest.

Even so, critics say the firms are trying to solve a problem that they helped fuel and that promises made in 2019 were prompted at least partly by the negative publicity they’d already received. 

While Google’s $1 billion commitment in June 2019 was a surprise, it wasn’t the first time that a large tech company had pledged to spend money to increase California’s supply of homes. Cisco promised a year earlier $50 million over five years to provide permanent housing for the homeless in Santa Clara County, which comprises almost all of Silicon Valley. While Google, among the world’s top companies by market valuation, had previously donated to local homeless groups through Google.org, its philanthropic arm, those contributions were well below the scale of its billion-dollar pledge. 

We know our responsibility to help starts at home,” CEO Sundar Pichai wrote in a blog post outlining the company’s commitment. “That means being a good neighbor in the place where it all began over 20 years ago: the San Francisco Bay Area.” 

While the company said the Bay Area’s housing market had reached a “crisis point,” some land-use consultants speculated that it timed its pledge to spur goodwill within the San Jose community as it worked to get a mixed-use campus project approved.

For more than a year prior to the announcement, residents and some community groups had voiced concern that its project would boost rents and force out less wealthy residents. It would require more than 17,000 new market-rate and affordable homes to prevent rent levels from rising, according to San Jose-based labor group Working Partnerships USA. Eight people went so far as to chain themselves to seats in the City Council’s chambers ahead of a unanimous vote in 2018 to approve the sale of about 10 acres of public land to Google for its 80-acre development. 

To placate such worries, Google promised $200 million in community benefits, including giving the city some company-owned land to create new affordable housing. Council members unanimously approved its development plans last May. Dubbed “Downtown West,” it includes 4,000 new homes with an option to build 1,900 more, as well as about 7 million square feet of offices, parks and room for shops and entertainment. Australian developer Lendlease is responsible for Downtown West’s residential, retail and hotel components, while Google is in charge of building out the rest. 

All of these projects, you take them all together, they’re pennies on the dollar,” said Sandy Perry, who heads the Affordable Housing Network of Santa Clara County and was among 40 people who staged a multi-day protest against the 2018 City Council vote over the project in front of San Jose City Hall. “They don’t solve the problem, and they don’t rise to the scale of the amount of money that these corporations have on hand.

In the fall of 2019, under pressure from employees and politicians to tackle the consequences of unabated tech hiring, Meta and Apple followed Google with pledges of their own. Apple workers living in Oakland faced 90-minute commutes to travel to the company’s headquarters in Cupertino, which isn’t easily accessible by public transit. 

From 2011 to 2017, Santa Clara County, where Apple and Google are based, had a job-to-housing ratio of more than four times. That helps explain why the average engineer at Google must spend almost a third of their paycheck to afford a monthly mortgage near the company’s Mountain View headquarters, according to a 2018 report from Open Listings. 

That said, some of those projects are expected to open their doors in the coming years. Meta expects that those seeded through the first phase of its investment will start opening in early 2024, said Anu Natarajan, head of the company’s housing initiative. It spans seven developments representing 750 new homes funded through a so-called Community Housing Fund, which Meta co-launched with nonprofit Destination: Home and Partnership for the Bay’s Future.

The fund is targeting the development of at least 2,000 residences affordable for those with extremely low incomes. Separate from that initiative, Meta said last year that it’s also on track to produce and preserve about 750 affordable homes near its Menlo Park headquarters by the end of 2022. Google and Apple declined to comment on their housing plans.

Yet those kinds of numbers aren’t likely to move the needle on California’s housing crisis anytime soon. Commitments by companies are just a small part of the solution, said State Senator Scott Wiener, who’s made housing his top focus in previous years.

Major employers do have a role to play, he said in an interview. Until politicians tackle the heart of the problem, though, it’s unlikely much will change, because state laws make it “incredibly hard” to build housing, Wiener said. 

That’s a collective responsibility through government,” Wiener said. “I just don’t want there to be the narrative that employers are responsible for solving the crisis. They’re not. We all are.” 


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