Google development in downtown San Jose could result in $235 million in rent increases by 2030 if nearly 5,300 affordable homes and 12,500 market-rate homes do not enter the market, according to a report released Wednesday by a San Jose nonprofit.
The city approved a $110 million “mega-campus” for Google in December after immense pushback from local residents who said the move would aggravate gentrification and already-skyrocketing housing prices in Silicon Valley.
The city expects to collect 24.8 million in property tax revenue from the roughly 7 million square-foot project each year, according to the study, but a lack of sufficient housing could cost renters $127.4 million from rents almost five times as high as they are now.
Residents and activists gathered with the nonprofit Working Partnerships USA outside City Hall on Wednesday attributed the jump in rents to the “Google Effect,” which could cause property values to soar around the lucrative development.
The project will, however, include a community benefits plan to create investments in local programs. Jeffrey Buchanan, policy director at Working Partnerships USA, said Google has the responsibility to go above and beyond in public commitment due to the large amount of public resources, such as land and transit assets, being dedicated to the project.
“We think the community benefits plan is an opportunity for Google to really play a leadership role in investing and preventing displacement.”
Drawing from Google’s contributions to Mountain View for its headquarters in 2015, he said this could mean as much as $900 million in impact fees and community benefits toward housing and other resources in San Jose.
This could mitigate the findings of Wednesday’s report, which predicts an $816 annual rent hike by 2030 for San Jose residents, $756 for renters countywide and an increasing, pre-existing rent burden for communities of color.
“There’s a number of ways that we think Google, adding it all up, can work with the city and work with the community to address these impacts, but it’s going to take real leadership and commitment to developing without displacement.”
The project is currently passing through two or more years of planning, design and review before the final development is approved for construction. It will be master planned by a single developer and the city is requiring that 25 percent of its 3,000 projected homes be affordable housing.
The mega-campus will have room for nearly 20,000 employees, and city leaders hope it will provide a core for a future transit hub connecting BART, high-speed rail, Caltrain and other public transit at the Diridon Station.