As Google prepares to build a massive campus in downtown San Jose, community organizations are calling on the tech giant to help build more than 17,000 new homes to offset major rent hikes in the nation’s 10th largest city.
Their demands are part of a new report from the labor union-backed group Working Partnerships that aims to quantify the impact the coming development will have. Prepared by Beacon Economics, the analysis suggests that Google should build more than 5,284 new affordable homes and more than 12,450 market-rate homes to prevent local renters from absorbing $235 million in rent hikes by 2030, when the project is loosely expected to be built out.
“This research confirms that unless Google helps build enough affordable homes alongside its huge new mega-campus, the company will be pushing enormous costs onto the families who can least afford it, likely leading to more families facing eviction and pulling communities apart,” Jeffrey Buchanan, policy director at Working Partnerships, said in a statement.
The analysis assumes that the campus will bring in 20,000 new tech employees and some 8,000 service workers. But Google has not provided exact numbers yet and some city leaders and business groups have pushed back at the notion that all of the workers will be new, pointing out that many already live in the South Bay.
The report “makes a lot of assumptions,” said Eddie Truong, director of government and community relations for the Silicon Valley Organization, the city’s chamber of commerce.
Adding housing is a shared responsibility, said Michelle Azevedo of the San Jose Downtown Association, a business and property owner advocacy group.
“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,” Azevedo said in an email. “Furthermore, there is a robust community engagement process through the Station Area Advisory Group (SAAG), which includes Working Partnerships.”
Mayor Sam Liccardo said Wednesday afternoon that he hadn’t read the report, but pointed out that Google has “already committed” to paying a commercial linkage fee, which could go toward affordable housing and providing a series of as-yet-undetermined community benefits, which are likely to include affordable housing. The city will also require that at least 25 percent of the housing built around Diridon Station be affordable and rent restricted.
“There is no question that Google gets it,” Liccardo said.
But the mayor called on other cities to add to their housing stock as well, saying that if Google had decided to build in Santa Clara, for instance, San Jose would still likely be feeling the effect — but not reaping any of the benefit. Cupertino, he pointed out, allowed Apple to build a large campus there, but failed to add to its housing stock for years.
Teresa Alvarado, the head of SPUR’s San Jose office, agreed.
“We don’t see enough housing being built as other employment centers (Santa Cara and Cupertino) continue to grow,” Alvarado wrote in an email. “What’s more, 70 percent of Google employees in the Bay Area already live in the South Bay — including San Jose — and this will enable them to work closer to home.”
Still, the report notes that the San Jose metro area is already one of the most expensive housing markets in the country, with families of color particularly vulnerable to displacement.
“We’re working closely and collaboratively with the city and many community groups on our future development in San Jose,” Javier Gonzalez, Google’s South Bay public affairs manager said in a statement. “As we do so, we know that housing is a vital issue and we’re committed to invest in new housing in the area, including affordable housing.”
In the last several years, Google has spent hundreds of thousands of dollars in San Jose from homelessness to job training, including $100,000 to the Downtown Streets Team to serve homeless and low-income people, and $750,000 in grants to Somos Mayfair, which serves East San Jose.
According to the analysis, the average San Jose renter could see an annual $816 hike in rent by 2030 directly because of Google, while renters in the county more broadly could see rents go up by $765. Combined, the report says, San Jose renters will pay five times more in higher rents related to the campus than the city is expected to collect in property taxes from the project.
Those figures “would spell disaster” for many residents, said Michael Trujillo, an attorney with the Law Foundation of Silicon Valley. “An eviction for many of our clients means displacement or homelessness.”
In a statement, Robert Kleinhenz, an economist and executive director of research at Beacon Economics, said, “The good news is that, 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.”
At a news conference in front of City Hall Wednesday morning, Buchanan said the group wasn’t against Google coming to San Jose, “we just want to see a good project.”
The report comes ahead of specific plans from the tech giant, which should provide more details about the proposed development in the coming months.
“There’s a unique opportunity for Google to set the mark,” said Buchanan, noting that the company isn’t the only major developer in town. Jay Paul and Gary Dillabough’s Urban Community, among others, are also developing a number of downtown properties.
Salvador Bustamante, the executive director of LUNA: Latinos United for a New America, said his group is open to having Google in San Jose, but he doesn’t want the company to make conditions worse for residents. And, he said, while he’s “an optimist by nature,” his group and others have tried to mobilize to encourage Google to be a good neighbor.
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