Recap: Google in 2019 announced plans to invest a cool $1 billion to build 20,000 homes in San Francisco's Bay Area over the subsequent decade. Google CEO Sundar Pichai said 15,000 of the homes would be available universally regardless of income level, while the remaining 5,000 would be reserved for middle and low-income families.
Silicon Valley has been an expensive place to live for a while now, and Google wanted to help put a dent in the situation by addressing what it called a chronic shortage in affordable housing in the region. The project would have also provided housing for some of its employees. It was an ambitious plan and ultimately, one that proved a bit out of reach.
Google and construction / real estate partner Lendlease have mutually agreed to end their development agreement, which involved districts in four regions including San Jose, Sunnyvale, and the Bay Area (Middlefield Park and North Bayshore).
In its announcement, Lendlease said both organizations now agree that the projects are no longer mutually beneficial given current market conditions. Lendlease will remove the project, which was to break ground in FY26, from its development pipeline and receive a payment "in consideration for value created through the entitlement and master planning process."
Indeed, the housing market was in a far different place in 2019 (pre pandemic) than it is today. Interest rates are multiple times higher now than they were back then and home prices in general have skyrocketed across the country. It is a great time to sell a home but a terrible time to buy (or build).
What's more, the pandemic reshaped ideas about work and opened the door to work-from-home opportunities. Companies are slowly getting people back into the office, but working from a central location isn't the necessity it once was for many.
This means folks taking jobs in Silicon Valley don't necessarily have to move as deep into the city as they once did, allowing them to live a bit further out from town and avoid the premium real estate market.