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As Bay Area Housing Crisis Worsens, Big Companies Offer Money to Help

Google's announcement Tuesday that it would put $1 billion toward housing -- including affordable units for the community and housing for its employees -- came weeks after Wells Fargo pledged the same round number -- $1 billion -- toward housing affordability over the next six years.

Google headquarters
By Melia Russell

Wells Fargo. Kaiser Permanente. Salesforce's Marc Benioff. Now Google.

One by one, the corporate titans of the Bay Area are vowing to plow dollars into solving the region's biggest crisis -- housing.

It's a sign of just how serious the problem has become, for employees who need a place to live and also for the region's major companies, which are under fire from their communities because their workers are displacing longtime residents.

Google's announcement Tuesday that it would put $1 billion toward housing -- including affordable units for the community and housing for its employees -- came weeks after Wells Fargo pledged the same round number -- $1 billion -- toward housing affordability over the next six years.

Also new this year: The Partnership for the Bay's Future, a group of local foundations and companies including Facebook and the Chan Zuckerberg Initiative, is raising $540 million for affordable housing. In January, Kaiser Permanente said it will put aside $100 million to grow affordable housing in Bay Area cities and other places where the health system operates.

Salesforce's billionaire co-founder Marc Benioff and his wife, Lynne, have put up tens of millions of dollars to fund research on homelessness, subsidize rents for the newly housed and back a ballot measure that passed in November that will tax big businesses in San Francisco to help pay for homeless programs.

It's a subject that preoccupies every employer in the region.

United Airlines, which has more than 12,000 employees and a huge maintenance base near San Francisco International Airport, has looked at building units of housing for employees, according to Scott Kirby, the airline's president. Many employees, after meeting a minimum of months worked, ask to transfer somewhere with a lower cost of living, Kirby told The Chronicle last year.

"It's a challenge that's broader than us," Kirby said. "It seems to me that the community needs to solve this somehow. We'd love to be a part of that solution, but it's hard for any one company to solve."

As corporations in the Bay Area rode a wave of unprecedented job growth, the public sector let housing problems fester, said Nathan Ho, who leads housing policy at Silicon Valley Leadership Group, a business advocacy organization.

Cities are  building only a small portion of what's necessary. From 2010 to 2015, the Bay Area added 367,064 jobs but only 57,094 housing units, according to a 2017 report by the Silicon Valley Leadership Group and the Silicon Valley Community Foundation. The Building Industry Association estimates that 1.5 jobs per housing unit is a "healthy balance."

"To solve our housing emergency, all of us -- government, business, housing advocates, neighbors -- must work together," said state Sen. Scott Wiener, D-San Francisco, whose bill to spur denser housing around transit hubs was put on hold until next year.

Gov. Gavin Newsom has already asked tech companies to pitch in. He met with executives from Silicon Valley corporations in January about committing $500 million to help build housing aimed at middle-income families.

In a statement provided by Google, the governor said Tuesday he applauds Google for recognizing "it has an important role to play in addressing California's cost crisis."

Google's proposal would build at least 15,000 housing units on its land, spread across the North Bayshore area of Mountain View, Sunnyvale and San Jose. It would not be limited to Google employees. As part of the initiative, the company also said it will establish a $250 million investment fund to help finance 5,000 affordable units close to its offices and around transit hubs, though it acknowledged its money would only meet a small portion of the 5,000-unit goal.

Issi Romem, chief economist at Trulia, said that Google is taking the right approach by adding units of housing, instead of handing out rent vouchers. It's tackling the problem and not the symptoms.

Google's announcement comes one week after a San Jose advocacy group, Working Partnerships USA, released a report saying Google's proposed new campus at Diridon Station will raise rents by $235 million a year.

Maria Noel Fernandez, the group's campaign director, said it will follow up with Google to make sure its continued growth adds opportunities for working families, not just tech workers.

"The announcement demonstrates that Google is listening to the thousands ... who have demanded the tech giant take responsibility for its role in the housing crisis," she said in a statement.

A number of local companies are ponying up funds to build housing as part of a strategic plan, said Megan Abell, director of advocacy at Tech Equity Collaborative, an Oakland nonprofit that seeks to educate and engage tech workers on civic issues. Those businesses are "hungry for talent," she said. "Their companies are not going to be able to continue to grow, and certainly not grow in a way that's sustainable, unless we have cities and infrastructure that supports that growth -- and that includes workforce housing."

Abell said while she commends Google for its sizable donation, it's a "one-time drop in the bucket." She wants to see companies lobby for policies that would create a more functional housing market.

San Francisco Chronicle staff writer Elena Shao contributed to this report.

(c)2019 the San Francisco Chronicle

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