Google has already invested millions in windmills and fiber-optic communication in Kansas City, Kan. Now the online search giant has expanded its real estate portfolio with $6 million in a housing development near its headquarters, saying it hopes to support affordable housing and alternative transportation.
The newly constructed Franklin Street Family Apartments is 2.5 miles south of the Googleplex in Mountain View, Calif. The property developer describes the project as an "environmentally friendly development, constructed using sustainable building methods." It includes conservation features such as solar photovoltaic panels, energy efficient appliances, low flow plumbing fixtures and a naturally filtrating storm water runoff system.
But the best part of the $23 million housing development for residents is the rent--as low as $837 for a one-bedroom unit and $1,122 for two-bedrooms. The city's average rental price is around $3,063 a month, according to the Zillow rent index, while two-bedroom homes can be rented for as much as $5,500 a month. The median home value in Mountain View is $1,033,000, according to Zillow.
"Mountain View has been a wonderful home to Google, so we couldn't be more thrilled to help others make this community their home as well," said Kojo Ako-Asare, head of Google's corporate finance team. "Google remains committed to supporting affordable housing options in areas that allow for use of alternative transportation."
The affordable housing development was designed for people making about $44,000 a year on average. The 51 units each have one to three bedrooms and up to two bathrooms.
The property has been fully-occupied for the last two months, according to a spokeswoman for ROEM Corporation.
The median rental price is $2,693 in the greater Santa Clara County area, up 3.5 percent year-over-year, according to the Zillow Rent Index.
Mary Kroeger and her husband, both disabled, tell ABC's affiliate KGO that living at Franklin Street Family Apartments gives their family peace of mind.
"Our kids aren't worried about us. That's like our biggest thing, is making sure that we're not a burden to our kids before they even get started," Kroeger told ABC7 News.
While the benefits to the community are evident, Google will also gain from more than just goodwill.
Christopher Long at Aegon Realty Advisors tells KGO that the company may receive millions in tax credits over time.
Zillow's director of economic research Svenja Gudell said Google's investment in local affordable housing comes at a critical time in one of the nation's most expensive markets.
In the nearby San Jose metro area, home values have largely met or exceeded their prior peaks, meaning homes there are reaching record-highs. In Mountain View, the median home costs more than $1 million, "which creates an acute need for affordable housing there, especially with mortgage rates on the rise and home values expected to rise another 10 percent over the next year," she said.
"By this time next year, with rates for a 30-year fixed mortgage expected to be at or above 5 percent, owning a home in the San Jose metro area will be very expensive," Gudell said. "The percentage of homeowners' monthly incomes devoted to mortgage payments will rise to roughly 43 percent, up from 36 percent historically."