Tech giants like Facebook,Google, and LinkedIn are known for their digital products. But in the past several years, these companies and others like them have started to focus on an industry beyond their core business: real estate development.
From the lure of tax credits to efforts to provide residences for employees, there are several reasons why Silicon Valley companies are looking to build housing and even entire cities.
Take a look at some examples below.
In 2017, the Mountain View City Council approved a Google-backed plan to construct nearly 10,000 homes.
Google recently won city approval to construct a giant campus – which will include housing, offices, shops, businesses, and a public park – in the North Bayshore area of Mountain View, California.
Advocates of the 3.6 million-square foot development say that it will help alleviate the area’s affordable housing crisis. Around 20% of the homes will be priced at below-market rate.
Though Google threatened to block the construction of the homes unless city officials gave the company permission to build another 800,000 square feet of office space beyond its original proposal, Mountain View City Council green-lit the plan for the homes in December, The Mercury News reported.
It calls for three new residential neighbourhoods – Joaquin, Shorebird, and Pear – that will span 154 acres and include homes ranging from studios to three-bedroom units.
In late 2017, a division of Google parent company Alphabet announced plans to develop a swath of Toronto’s waterfront into a “smart city.”
Called Quayside, the neighbourhood’s plan will prioritise “environmental sustainability, affordability, mobility, and economic opportunity,” according to Footpath Labs.
From the renderings, it looks like Footpath Labs wants Quayside to be a mixed-use, pedestrian-friendly neighbourhood. The preliminary illustrations include bikeshares, apartment housing, bus lines, and parks. Though details of the plan are still unclear, Footpath Labs CEO Dan Doctoroff, a former New York City deputy mayor, has spoken about how self-driving cars, embedded sensors that track energy usage, machine learning, and high-speed internet could improve urban environments.
Footpath Labs has committed $US50 million to the project’s first phase, and the 12-acre development is expected to cost at least $US1 billion.
In the years following the 2008 recession, Google provided hundreds of millions of dollars in equity for several low-income housing projects in California and the Midwest.
In the years following the 2008 recession, Google, along with other large corporations, took advantage of Low-Income Housing Tax Credits (LIHTCs) to build affordable residential units. Since the program’s creation in 1986, LIHTCs have helped finance more than 2.4 million affordable rental units across the US.
The tech giant has bought hundreds of millions of dollars worth of LIHTCs to fund developments in Iowa, Wisconsin, and California, according to CNBC.
In Menlo Park, California, Facebook plans to build a new campus with 1,500 residences.
In 2017, Facebook announced that it will construct a village that will include 1,500 residences, a walkable retail district, a grocery store, and a hotel for its employees.
The company bought the 56-acre site, located across the street from its headquarters, in 2015 for about $US400 million.
It will take around a decade to build, and the initial phase of the project will open in the first half of 2021.
In December, LinkedIn poured $US10 million into a program that works toward building affordable housing in Silicon Valley.
LinkedIn recently announced that it has devoted $US10 million to a project by Housing Trust Silicon Valley, a nonprofit that helps finance affordable housing projects in the Bay Area.
The project, called TECH Fund, gives affordable housing developers short-term loans that help them “compete more effectively with market-rate developers and purchase property faster,” according to the Trust.
With LinkedIn’s contribution, TECH Fund’s investment totals $US30 million.
Y Combinator has started research on a project to design futuristic cities.
“We now have major technologies such as smart grids, autonomous vehicles, etc. The internet itself allows for participation never before possible. Also, housing prices in many cities have become untenable and we need more housing in places people want to live,” Y Combinator partner Adora Chung wrote in a blog post titled “New Cities.” “Our goal is to design the best possible city given the constraints of existing laws.”
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