Google has ended its agreement with real estate developer Landlease for its San Francisco Bay Project, effectively scrapping its plans to build a campus with thousands of homes for employees and locals. The company announced the project in 2019, promising the "development of at least 15,000 new homes at all income levels" on at least $750 million worth of land it owns. Around 4,000 of those homes were supposed to be affordable housing, which would've been a welcome presence in the region with one of the highest costs of living in the country.
The San Francisco Bay Project is a collective name for Google's planned developments in San Jose (Downtown West), Sunnyvale (Moffett Park) and Mountain View (Middlefield Park and North Bayshore). San Jose, in particular, approved the massive project in 2021, and it would've seen the construction of 4,000 homes, office space for approximately 20,000 employees, 300 hotel rooms and 10 parks. As part of the deal, Google had agreed to set aside $200 million in funding for displaced local businesses and job readiness programs.
Earlier this year, however, Google put the Downtown West facility construction on hold after demolition had already started to make way for construction that was scheduled to begin in 2026. The company told Engadget at the time that it was still figuring out "how to best move forward" with the San Jose campus in a way that would cater to its "future needs." Workplaces have changed tremendously over the past few years, after all, mostly due to the COVID-19 pandemic — Google, for instance, adopted a hybrid work schedule that allowed employees to work from home for a couple of days a week. Earlier this year, Google parent Alphabet also laid off 12,000 workers after going on a hiring spree during a period of growth.
In Lendlease's announcement (PDF), it said that the companies have decided to end their agreement after Google did a comprehensive review of its real estate investments. They've apparently determined that the "existing agreements are no longer mutually beneficial given current market conditions. Based on what a company spokesperson told CNBC, though, Google hasn't entirely killed its housing projects. "As we've shared before, we've been optimizing our real estate investments in the Bay Area, and part of that work is looking at a variety of options to move our development projects forward and deliver on our housing commitment," Alexa Arena, a senior director of development at Google, told the news organziation. San Jose Mayor Matt Mahan also told CNBC that this development "doesn't change Google's commitment to San Jose or their timeline" and that it gives the company more flexibility to choose the "best possible developers" for the project.
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