Sorry Google—Funding More Homes Won’t Solve the Bay Area Housing Crunch

The technology giant announced earlier this week a $1 billion commitment to help offset the San Francisco Bay Area housing shortage. It’s a noble overture. But even that sizable amount is a very small drop in a very large ocean. And it doesn’t recognize the reality that building more houses won’t fundamentally solve the Bay Area housing crisis.

In fact, this approach perpetuates the antiquated notion that when your company expands, you build additional offices, add nearby housing to support all the new workers you bring to town, and fund more mass transit. And while alleviating burdens on existing infrastructure is wise, this approach ignores the fact that most work can be done remotely in the digital age, and we can spread opportunity more broadly as a result. (My company, Upwork, runs a digital platform that helps remote workers connect with clients.)

Year after year, the refusal to consider flexible work scenarios as a solution for housing woes results in more and more people crowding into urban areas. High-wage tech workers are driving up the cost of nearby real estate, forcing many workers to commute hundreds of hours each year to their jobs. Our roads are clogged, local infrastructure is strained, and quality of life is diminishing.

If we don’t enable more people to work where they choose, such tensions will only grow. Local housing prices will continue to skyrocket so long as the economy is booming. The median price of a single-family Bay Area home hit a whopping $990,000 in May. And every time workers from elite high-tech companies move into a neighborhood, prices rise—a lot. A Zillow report, for example, looked at how Facebook’s May 2012 IPO affected Bay Area housing prices between March 2012 and March 2013. “Home values where likely Facebook employees lived grew 20.9%, compared with 16.8% for the rest of the Bay Area. That translates to a $29,800 difference in appreciation in that first year after Facebook went public,” reads a press release that accompanied the report.1

None of this resembles smart urban planning, and Bay Area residents are suffering because of it. According to one recent survey, the housing crunch, bad traffic, and deteriorating quality of life have 44% of residents planning to leave the region. A separate Bay Area Council study, meanwhile, found more than half of millennials—the most represented generation in the workforce—are considering leaving.

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  • 1. Commute times, already among the longest in the nation for many Bay Area communities, will also worsen if we cling to outdated urban planning approaches. When companies grow, they make their mark on the world by expanding the number of buildings they control. They start with one, then two, then four, then eight, and so on, doubling their space every few years. These campuses bring thousands of workers into areas that often lack the local infrastructure to adequately support them. We saw this with Salesforce’s skyscraper in San Francisco, with the moves by Facebook and Google to gobble up existing buildings or create their own all around the world, and with Amazon’s aborted HQ2 effort in New York City.