Google’s $1 Billion Attempt To Fix The Bay Area Housing Crisis
By CultureBanx Team
Google is investing $1B to create 20K homes in the Bay Area
African Americans make up 34% of San Francisco’s homeless population
One of the Bay Area’s largest employers, Google (GOOG +0.46%) is investing an additional $1 billion in housing across the area. The tech giants goal is to create 20,000 homes and 15,000 of those units will be on its own land. Is it possible that a nation which seems to value private profits more than public welfare, could ever truly address the problems of its own making?
Why This Matters: Google has established a $250 million investment fund as part of the $1 billion commitment, so that it can provide incentives for developers to build at least 5,000 affordable housing units across the market. They’ll also give $50 million in grants to Google.org, to give to nonprofits focused on the issues of homelessness and displacement, something that has hit African Americans in the Bay Area very hard. In 2017, the San Francisco Homeless Count Survey found the differences between the city’s population and those experiencing homelessness were vastly distinct, with African Americans making up 34% compared to just 6% of the general population.
Google plans to use the majority of the money $750 million to support the development of at least 15,000 new homes at all income levels. However, developers aren’t necessarily keen on these types of projects for several reasons. In 2016, San Francisco voters passed a proposition that increased the portion of buildings subject to affordable housing fees from 20 percent to 30 percent. This means developers pay about $200 per square foot on that portion of the project. For example, a 100,000-square-foot rental housing development would garner a fee of be about $6 million.
Situational Awareness: The city’s affordable housing fees come from three sources: jobs-housing linkage, inclusionary housing and neighborhood impact. Unfortunately, the fees have dropped in each of the past three fiscal years, from $111 million to $58 million to $50 million to $35 million, according to the San Francisco Chronicle. Google didn’t provide specific benchmarks or dates for when any development would commence.
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