You’ve heard the axiom: “Rent money is spent money.” That attitude seems to be resonating with Millennials. It appears, based on housing start figures and the average age of first time home buyers, that home ownership is having a resurgence, led by those under age 35. Problem is, salaries have not kept pace with inflation. In this article we explore avenues and strategies that major U.S. companies and determined home seekers are using to achieve their piece of the American Dream.
Historically, home ownership has been the most lucrative way to accrue a passive income or at least a sound investment. For decades, one could purchase a home, enjoy and maintain it, then sell it within a few years for a major profit. Due to the economic downturn of 2008, that well-travel route vanished over the last few years. Today many home sellers are finding that their home has a negative equity. That is it is worth less now than what they paid for it 15 years ago including any updates they may have made in the interim. Another hurdle to home ownership is money.
Take the example of Silicon Valley. Thirty-five years ago it did not exist. Slowly this region, that includes San Francisco and the surrounding area, attracted more high-tech and internet companies such as Microsoft and Google. Each business has their percentage of high-salaried workers, but these enterprises are kept humming by office staff who do not command six-figure salaries. Yet the need for programmers, software developers, and other professionals drove houses prices out of reach for the majority of workers.
This led to lengthy commutes for some office staffers, while others elected to live in RVs, constantly moving within the city limits to avoid being fined. San Francisco officials’ recent crackdown on where RVs could park overnight led to Google’s taking charge of the problem and offering a solution: provide affordable housing for their workers and encourage other tech and internet businesses to do the same.
While San Francisco enjoys a high standard of living, almost 30% of its citizens are working poor. That’s because even with a salary in excess of 6-figures, one cannot afford Bay-area housing costs. In fact, a recent study revealed that San Francisco has the third largest homeless population in the United States. Here’s the kicker: of these most are college-educated, skilled labor who are employed full-time. So while a lack of affordable housing is not exclusive to the West Coast, Google set about to find a solution. Here’s what this industry giant plans to do:
Build Housing Not Offices
Over the next decade, almost a billion dollars of Google-owned land, currently earmarked for office and commercial expansion, will be repurposed instead to provide residential housing. It is expected that this initiative will yield about 15,000 residences at all income levels. It is not clear, however, if this housing is exclusively for Google employees, or the general population. Next, another $250,000 million will be invested in developing some 5,000 affordable housing units. Again, for whose benefit has not been made apparent.
What Google is proposing to do is nothing new; as economic growth moved westward in the 19th century, industrialists in mining and coal operations in particular created entire towns with housing for their workers and their families. The workers lived rent-free but were paid in scrip that could be used only at Company-run stores thereby ensuring their corporate loyalty: they simply had nowhere else to go. Google’s present day attempts to alleviate the housing shortage in their region is honorable, as well as duplicatable.
Duplication is Google’s point. They are alleviating some of the housing crunch in the region and hopefully setting the precedent as well as providing an incentive for other industry giants to follow. This way, not only will housing be available to all, but also meaningful employment. Google has created a blueprint that can be followed elsewhere in the nation to remediate the nationwide housing shortage as well as to create and sustain relevant employment opportunities.
Across the board this concept is a win-win. When families find meaningful work and affordable housing, the demand for schools, household goods, shopping, dining, hospitals and medical practices, and entertainment venues, is created. The need for https://www.6pm.com/clothing, http://big5sportinggoods.com/, groceries, vitamin and nutrition shops, computers, TVs, cellphones, services such as dry cleaning and landscaping, fitness and gyms, swimming pools, movie theaters, cars, trucks and auto parts, gas stations, construction materials, etc. etc. increases also. In short, the economy improves overall. If Google’s concept works, then over the next couple decades the U.S. could experience an unprecedented yet sustainable economic boom. And it all started by recognizing a need to treat people right…