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| A look at downtown San Jose, as taken in May 2017. The area Google is eyeing to build a massive campus is to the left. |
By Jody Meacham – Reporter, Silicon Valley Business Journal - Jun 12, 2019, 1:53pm PDT Updated Jun 12, 2019, 6:18pm EDT
The additional housing demand created by Google’s planned downtown San Jose expansion would exacerbate the local housing crisis and raise local rents by hundreds of dollars per family annually, says a report published today by Working Partnerships USA.
The labor-affiliated think tank, which has long called for a stronger commitment from Google to mitigating adverse effects of its downtown plans, considers a $900 million housing investment from the company in San Jose “feasible” based on commitments it has made in the area around its North Bayshore development in Mountain View.
“With a reasonable investment in housing across levels of affordability, Google could prevent these impacts and avoid replicating Silicon Valley’s pattern of housing underproduction, mega-commutes and displacement,” Robert Kleinhenz, research director at Los Angeles-based Beacon Economics, which was commissioned by WPUSA to do the report, said in a press release.
Eddie Truong, head of government relations for The Silicon Valley Organization, formerly the chamber of commerce, criticized the report for making too many assumptions, including omitting the likelihood of a recession, and said it was premature.
“There currently isn’t a finalized Google project,” he said. “(The report) is all speculation about impact on housing prices that is really not rooted in any reality.”
Anil Babbar, public affairs vice president for the California Apartment Association, also faulted the report’s reliance on assumptions to predict conditions a decade away. “We're expected to make significant policy decisions on a lot of assumptions that I simply can't verify or make sure they're accurate.”
SPUR's San Jose director Teresa Alvarado defended the city's efforts to address the housing crisis so far and questioned a report assumption that future downtown employees would all be new. "A majority of Bay Area Google employees already live in the South Bay," she said.
The San Jose Downtown Association’s Rick Jensen issued a statement saying the approved memorandum of understanding"between the City of San Jose and Google makes clear that both parties are taking active steps to combat displacement and create affordable housing. Furthermore, there is a robust community engagement process through the Station Area Advisory Group (SAAG), which includes Working Partnerships. The SAAG will have the opportunity to review and provide feedback on any community benefits agreement.”
Based on its data, Working Partnerships' report estimates rents in Santa Clara County Jose would rise about $235 million annually — about $765 per apartment — without a commitment from Google “to significant housing production.”
San Jose’s share of the annual rent increase was pegged at $127.4 million a year, five times the $24.8 million it estimates the city would receive in annual property taxes. Avoiding those rent increases would require subsidizing 5,284 affordable housing units plus 12,540 market-rate units, according to the report.
