FILE – In this Feb. 23, 2016, file photo, a man stands outside his tent on Division Street in San Francisco. A key federal count shows the number of homeless people increased by double-digit percentages in three San Francisco area counties over two years. In San Francisco, the number of homeless people jumped 17% to more than 8,000 in 2019. (AP Photo/Eric Risberg, File)
ASSOCIATED PRESS
One of the Bay Area’s largest employers, Google 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?
The Breakdown You Need to Know
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 has hit African Americans in the Bay Area very hard. CultureBanx reported that 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. The company “hopes this plays a role in addressing the chronic shortage of affordable housing options for long-time middle and low income residents,” as written on its site.
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.
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.
Tech Titans vs. Housing
If we look a little further North to the broader Seattle area, home to Microsoft and Amazon they are facing a similar housing crisis. Microsoft created a $475 million trust fund to support the creation of middle-income housing, along with a $25 million donation to address homelessness.
The $25 million in grants to service low-income and homeless residents in Seattle is merely a drop in the bucket for the software company. To further put this into perspective for you, the company’s plan represents just 2.7% of its annual net income. Not to mention in the past decade they have made $184 billion in net income. It could also be viewed as a one-time 31% increase in the company’s advertising budget.
What’s Next
In November, voters in San Francisco won a battle against tech giants that have played a role in increasing the city’s homeless population by passing Proposition C. It’s earmarked for homeless relief programs and will bring in as much as $300 million each year by taxing large businesses, doubling the city’s budget for dealing with homelessness. This money along with what Google is trying to do could be a big win to combat homelessness, but the company didn’t provide specific benchmarks or dates for when any development would commence.