Brace Yourselves, Google is Coming

“Do the Right Thing” – Google’s Motto

In a shocking news report, Google, the leading search engine and Bay Area giant, has decided to invest $1 billion into developing new homes in the Bay Area!

They plan on rezoning $750 million worth of properties that it currently owns to develop 15,000 new homes and will create a $250 million fund to develop another 5,000 new homes.

This is amazing news! We’ve had a housing crisis in the Bay Area for a long time. Rent prices have increased tremendously in the past few years and home prices have skyrocketed!

As an investor, this is good news to me, but it’s disheartening to see my friends being forced to stay at home to save money. Some of my friends aren’t even thinking of purchasing a house until after they get married.

Solving the Housing Crisis

A few months ago, I went to Milpitas’ City Hall meeting, where they discussed the possibility of creating a rental ordinance for the city (rent control). Both sides of the issue showed up. I understand both sides, and I have sympathy for everyone.

The property owners believed it’s a Communist move to force the rates on their property. After all, the owners took the risk and purchased the property with their hard earned cash, why should they be forced to keep the rents low if the market allows them to get more for their properties.

But on the other hand, the people who live in these apartment complexes are often struggling immigrants, who will lose their homes if rent prices increase. They are people who will end up on the streets if the landlord decides to drastically raise rents.

They believe that rent control is the way to solve this issue. I don’t agree with that. I believe the root source of the issue is that there isn’t enough inventory. According to the article in the Business journal, only 3,000 new homes were build in the South Bay last year. That’s just not enough.

On top of that, developing new homes is a difficult and risky process. Cities need to make it easier for developers to create more housing if they want a long term solution to the housing crisis.

According to the article, if nothing changes, then rents in Santa Clara county will increase by $765 per year!

Thank God for Google!

“Don’t Be Evil” – Google’s Motto up until 2015

Here’s the big question, with this influx in new housing, how will that affect the housing market? Why would someone buy a used home when they can buy something new at an affordable price?

There are a lot of ‘pros’ but what are the ‘cons’?

What’s your opinion on Google’s move? Is it a good thing? Or will it have some deeper implications that we won’t know until it comes through?

You can read the full article on the BizJournals website: https://www.bizjournals.com/sanjose/news/2019/06/18/google-bay-area-20k-housing-billion-dollars-goog.html

Leave a comment below with your thoughts!