Google invests $50M in low-income housing fund
Investment is tech giant’s first after pledging $250 million for affordable homes in region
Google on Wednesday invested $50 million to build low-income homes around the Bay Area, taking a step toward fulfilling the lofty $1 billion housing promise the tech titan made last month.
The Mountain View-based search giant will invest the money in Housing Trust Silicon Valley’s TECH Fund, a program launched in 2017 that uses money from local companies and large organizations to fund affordable housing.
Google’s $50 million contribution marks the fund’s largest investment to date and comes as Bay Area tech companies increasingly are trying to help mitigate the housing shortage that has driven prices sky-high across the Bay Area. It’s a crisis those tech companies often are blamed for helping to create, as they flood the region with high-paying jobs that drive up housing demand and prices.
“As part of our $1 billion housing commitment, we’ve been looking for ways to address the affordable housing crisis in the Bay Area,” Google CEO Sundar Pichai wrote in a release announcing Wednesday’s investment. “Housing Trust Silicon Valley provided us with the perfect opportunity to do that through their TECH fund, which uses critical capital to break down barriers to building affordable housing. We are proud to be the fund’s largest investor to date and look forward to working together to create housing for those who need it most.”
Last month, Google made headlines with an ambitious promise — the tech company pledged it would contribute $1 billion toward fixing the region’s housing crisis, marking the single biggest housing commitment from a tech company to date.
That sum included $750 million worth of land Google plans to set aside for housing and a $250 million fund intended to build at least 5,000 affordable homes. Wednesday’s $50 million investment is the first sum to be deployed from that affordable housing fund.
Meanwhile, Google is planning a massive new campus near San Jose’s Diridon train station,
which would include office space, retail and housing — a project that has some in the area concerned it will cause rents to climb still higher.
Kevin Zwick, CEO of Housing Trust Silicon Valley, on Wednesday applauded Google’s investment in the TECH Fund.
“Google’s significant investment continues the momentum TECH Fund was designed to create,” Zwick wrote in Wednesday’s news release. “Stepping forward in a way that makes a difference and inspiring your neighbor to step forward and do the same. Not only will Google’s investment make a real impact, but it sends the intentional message that we’re not done and we can all do more when it comes to affordable housing.”
The TECH Fund — which, including Google’s latest commitment, has netted $112 million — provides loans to affordable housing developers to help them purchase land, build new affordable units and convert existing buildings into affordable housing. So far, the TECH Fund has aided in the creation of 2,255 homes. That includes 64 units for homeless seniors at Leigh Avenue Senior Apartments in San Jose, a project that broke ground in February. Most TECH Fund homes are aimed at residents earning 60% of the area median income, or $75,120 for a family of four in Santa Clara County.
The Cisco Foundation, LinkedIn, NetApp, the David and Lucile Packard Foundation, Pure Storage and the Sobrato Family Foundation are past contributors.
Crediting the TECH Fund as its inspiration, Microsoft in January pledged $500 million to fund housing in the Seattle area. In January, Facebook, the Chan Zuckerberg Initiative, the San Francisco Foundation, Genentech and others launched a $500 million fund to build or preserve more than 8,000 homes in the Bay Area.
It was a smart move on Google’s part for the tech company to invest in the TECH Fund rather than trying to deploy the capital to individual housing projects itself, said Michael Lane, deputy director of affordable housing advocacy group SV@Home.
“We’re thrilled, and we think it was a really fantastic move because of the track record the Housing Trust has of being able to deploy this kind of capital,” he said.
Lane hopes Google’s $50 million investment will inspire more companies to follow with pledges of their own. “I think it’s huge,” he said, “because it certainly draws more attention to the TECH Fund.”