Back in 2019, Google promised to invest $1 billion to help ease the housing crunch in the Bay Area. This plan was tied to their expansion in Silicon Valley.

Most of this investment wasn’t cash but rather real estate—specifically, $750 million in office parks that Google owned. They planned to transform these spaces into four new neighborhoods that would house around 15,000 families with varied income levels, incorporating public transport, shops, and parks. It was a mix of corporate responsibility and urban development.

However, six years later, with Google scaling back on its Bay Area office projects, the housing developments are now in jeopardy.

The company has recently announced it is considering selling Middlefield Park, a 40-acre property close to its Mountain View headquarters. This site was intended to become a bustling district featuring 1,900 homes, a light rail station, and 10 acres of public parks.

This plan was part of a 2022 agreement where Google also promised to donate land worth $53 million for up to 380 affordable housing units.

That donation hasn’t happened yet, and it’s uncertain if it will.

If a new buyer comes in, they would have to adhere to Google’s existing development requirements, which include the affordable housing donation and an additional $19 million for community benefits, like a public parking garage and retail subsidies.

Lucas Ramirez, a city council member who was mayor when the agreement was approved, expressed concerns that without Google’s financial backing, the project may downsize significantly. He anticipates that the new owner might abandon plans for office spaces in favor of less dense housing, likely prompting a reevaluation of the original agreement.

“The economics for high-density housing just aren’t favorable right now,” Ramirez noted.

A Google representative verified they’re looking for buyers who can handle residential development on the site. They emphasized that complex projects like this take time.

Throughout Silicon Valley, developers are reconsidering ambitious projects initially approved during the pandemic, attributing the changes to rising interest rates. In San Jose alone, this shift has led to a reduction of 4,177 housing units that were previously approved.

Middlefield Park represents just one of several promising projects that Google once highlighted as evidence of tech’s role in solving housing issues. Other projects include:

• 80 acres in San Jose’s Downtown West, with plans for 4,000 homes, approved in 2021
• 153 acres in Mountain View’s North Bayshore, targeting 7,000 homes, approved in June 2023
• 350 acres in Sunnyvale’s Moffett Park, with an undetermined number of homes.

These ambitious plans were formulated in 2019, before the pandemic altered traditional office work dynamics and reduced demand for office space.

However, in 2023, Google terminated a $15 billion deal with its Australian partner, Lendlease, which was supposed to help develop these neighborhoods. Despite that, Google claimed it would still proceed with its housing plans, albeit with possibly fewer office spaces.

“We’re reassessing our real estate investments in the Bay Area,” stated then-Google Senior Development Director Alexa Arena in November 2023. “This includes exploring various options to ensure we move forward with our housing commitments.”

Nonetheless, Google isn’t a home builder. A significant portion of their real estate team was laid off in 2023, according to LinkedIn reports.

After six years into their $1 billion promise, no housing developments have materialized on Google-owned land.

One former employee mentioned that the company might be hesitant to divest other properties in San Jose and Sunnyvale because it would likely incur losses.

Google isn’t alone; Meta, the parent company of Facebook, also made a $1 billion commitment to affordable housing in 2019, planning to build 1,730 homes on $225 million in land in Menlo Park but has yet to start construction.

Ramirez pointed out that Google’s housing initiative was closely linked to its need for office space. City leaders were told that for the housing to be financially viable, they’d need city approval for campus expansion.

Some former Google employees attribute slow progress to bureaucratic delays. Two of them, wishing to remain anonymous due to non-disclosure agreements, claimed that quicker city approvals could have expedited housing developments.

However, the Mountain View of today differs significantly from the past. Ramirez noted that the city has processed Google’s plans for Middlefield Park more swiftly than usual for such large projects. Lenka Wright, the city’s chief communications officer, stated that they “worked hard to get this project moving.”

Google even agreed to fund extra personnel to expedite the permit review process, according to Ramirez.

“Navigating the permit process can be challenging, but that wasn’t the case for Google,” he said. “We went above and beyond to support them.”

City officials in Mountain View are anxiously waiting to see if Google will sell more of its land. In 2024, Google pulled back on permits for new office space at North Bayshore just a year after getting approval for its mixed-use plan.

“We’re committed to addressing the housing crisis,” stated Mountain View Mayor Ellen Kamei. “Our goal is not just to create housing but to foster a strong community in Mountain View. That vision for Middlefield Park and North Bayshore remains a priority.”