Google Partners with Lendlease to Address Housing in Bay Area
In the news recently, Google announced plans to invest $1B for affordable housing in three Silicon Valley communities in which it has a presence: San Jose, Sunnyvale, and Mountain View. In the initial steps to bring this ambition plan to fruition, Google has selected Lendlease as its development partner to oversee the development of up to 15 million square feet of retail, housing, hospitality, and public spaces.
Lendlease is an Australian construction, development and investment company, but it also has U.S. headquarters in New York City. The Google project is expected to take roughly 10 to 15 years to complete, with Google embarking on parallel projects to also develop office space within these three communities.
“Today’s agreement expands on an existing and successful partnership that will help us deliver on two important objectives: Our commitment to accelerate the production of residential units in the Bay Area and our plan to build mixed-use developments,” David Radcliffe, vice president of real estate and workplace services at Google, said in a statement to CoStar. “Lendlease will play a key role in helping deliver at least 15,000 new homes on our land.”
Google and Lendlease have a long-standing relationship, as they have also partnered on Google offices in London and Sydney. The projects are expected to begin as early as 2021, but are dependent upon the necessary zoning and planning approvals. It’s expected that the total value of the developments, once complete, could exceed $15 billion.
Google has been recently signaled a desire to be more proactive about tackling the problems of housing affordability in the Silicon Valley area. According to CEO Sunda Pichai, in a June blog post that Google plans to repurpose at least $750 million of land it currently holds in the Silicon Valley area, by rezoning it from commercial to residential use. The housing shortage and increase in housing values is due, in part, to the growth of the various area tech companies and the higher-end salaries paid to technology employees.
The average monthly apartment rent in Silicon Valley has risen nearly 50% since 2010, from $2051 to $2,964, according to CoStar data. Average rent in San Jose is $2,799 per month, and the average in San Francisco is $3,130.
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