Working Partnerships continues to criticize Google development

Despite receiving widespread acclaim for its Diridon Station campus, Google still faces nay-sayers. Here we analyze the short opposition statement from a director at Working  Partnerships, as it appeared in last week's San Jose Business Journal, in an effort to understand their concerns.

Working Partnerships: "We know that ultimately the project will be judged by whether it creates enough affordable homes..."

Let's start with first principles: 

Google is not a government agency. It received no discounts or subsidies when it buys land around Diridon.  It aims to develop around Diridon in order to build a world-class campus for its employees around a major transit center. As a publicly-held corporation, it reports to its shareholders, not the citizens of San Jose. It is in the information technology business, not the affordable housing business. The area's housing crisis derives in no way from Google, but rather from restrictive land use policies implemented by generations of area politicians who constrained housing supply.

As such, it is inaccurate to suggest that the success criteria for this project is the amount of affordable housing it creates. The world-class design, the thousands of new housing units, the expansion of park space--these are very meaningful, generous, and important elements of the plan, but that are not, nor should they be considered, its driving criteria.  Google is building a campus for its workers: that is the impetus of the development investment and that is the criteria by which is should be judged. Working Partnerships mistakenly claims that they are the most important stakeholder Google should listen to. It is economically and politically illiterate to make that claim. 

Working Partnerships: "...enough affordable homes to prevent the tens of millions of dollars in rent hikes that the new Google development will otherwise have on working families and seniors who depend on rental housing..."

The "tens of millions of dollars" projection comes from a deeply flawed document commissioned by Working Partnerships, which falsely assumes three things: 

No housing will be built in the area to increase supply—and thus lower costs—unless Google builds it. This assertion is clearly false, as developers are already active building new housing in San Jose.

All Google Diridon employees will live in San Jose. This is a dubious projection, as Google Diridon employees, assuming they will follow standard work-housing patterns, will spread out in a 45 mile radius around Diridon (perhaps even farther, as it will be an even larger transit hub).

Google employees will pursue low-cost housing. Working Partnerships is right that Google employees are generally well-paid, which means that the market pressure they will put on area housing will be in the more costly parts of the market, not on the lower cost segment.