Real estate is a serious and important industry that impacts billions of people every day. But there’s also a lot of stuff happening in it that’s pretty weird and funny. Small Talk is a new column from The Real Deal’s Eddie Small that takes a humorous look at some of the big issues going on in the industry.
I, for one, was thrilled to learn that tech companies are going to solve the housing problem.
I know, I know: it’s confusing. Because for a long time, tech companies were the ones causing the housing problem, but now they’re doing the opposite. If it helps, keep in mind that we went through this type of reversal before around 2016, when we switched from thinking tech companies were solving everything to knowing they were ruining everything, so it will probably only be a few more years before we can go back to being mad at them about housing again.
But at the moment, they’re the problem solvers. Google recently pledged to spend $1 billion to create 20,000 new units of housing in California’s Bay Area, and Microsoft and Facebook have each pledged to donate $500 million to build affordable housing in Seattle and the Bay Area, respectively. Mark Zuckerberg himself will play a leading role in Facebook’s fund, saying that his goal is simply “to improve the community and make people forget about pretty much every article that has been written about Facebook over the last three years. Remember when this was just a site where you listed off a bunch of movies that you liked?”
Microsoft announced its new fund at the beginning of the year, and it is widely expected to finalize the corporation’s transition from “symbol of all that is wrong with 1990s capitalist greed” to “tech company that looks downright quaint compared to the one where all the Nazis hang out and the one with all those anti-suicide nets at its factories.”
Facebook followed suit, in a move seeming to acknowledge that even when a company has a simple and straightforward goal like completely upending how humans interact with each other, it can still come with some unintended consequences. Turning humans into hollow, like-obsessed shadows of their former selves who no longer remember how to genuinely connect with another person in real life, for instance. And also driving up housing prices.
And now Google has joined in, with company CEO Sundar Pichai saying that $750 million of their effort will be repurposing land the company already owns from commercial or office space to residential. These properties are expected to attract the ever-increasing demographic of people who are worried that Google does not know enough about them yet and would like the search giant to become their landlord as well.
So all together, the three companies will be putting $2 billion toward housing. And all together, the three companies made more than $89 billion during the second quarter of 2019 alone. So it’s probably safe to say that supporting affordable housing isn’t actually a big priority for any of them, likely ranking very far below “earning money” and slightly less farther below “seeing if we can get people really into FarmVille/Zunes/Google Wave again.”
But that’s not the biggest problem with these funds. The biggest problem is that, despite some rumors you may have heard, Seattle and the Bay Area are both completely different places from New York. This means New York will not be seeing any of that sweet affordable housing money from these tech giants and will instead have to rely on getting it from more obscure sources, such as developers with decades of experience building affordable housing and the government. You know, places without any real power.
Luckily, there is a pretty straightforward solution to this. All we need to do is convince a tech company to massively expand its presence in New York City, wait patiently for a few years as its immense wealth and high-salaried workers gradually make housing prices even more expensive than they already are, spend a few more years mounting a grassroots public relations campaign to make that company feel at least slightly embarrassed about how it’s making housing prices more expensive, and then eagerly collect our $1 billion prize, or whatever the equivalent of $1 billion will be by the time this whole process plays out. It’s as easy as that.
The only caveat here is that the tech giant obviously can’t be Amazon. If the aborted attempt by Amazon to bring its second headquarters to New York City taught us anything, it’s that everyone in New York hates Amazon, except for all the people in New York who love Amazon and all the people in New York who have conflicted feelings about Amazon but use it anyway because it really is that convenient and cheap.
So, do any other tech companies come to mind? My first choice would definitely be Friendster. Those guys are way overdue for a comeback.