Pros and Cons of Big Tech's Ambitious Project to Create "Company Towns"
Do you want to live inside Google? We already live there online. I'm not sure that I want to in real life (IRL), but it might be the future.
Do you want to live in a community developed and owned by Google, Meta, Tesla, or Amazon?
That question is something many of us will soon ask ourselves as big tech firms move into the real estate development space building “company towns”.
The housing affordability crisis has prompted big tech companies to begin to create homes near their facilities for employees and the surrounding communities.
For example, in Mountainview, CA Google parent Alphabet plans to build 7,000 residential units, with 15% affordable and ~290,000 SF of retail and more than 1M SF of office space. The details are highlighted in the table below. Alphabet intends to create three neighborhoods in the city that will be walkable, sustainable, diverse, and mobility-friendly. To learn more, you can find a link to the masterplan website here.
In late 2022, Meta Platforms was approved to build “Zucktown,” an “urban village” that would span 59 acres with homes, offices, retail, and a hotel. The project is located in Menlo Park, CA. The development will replace an office park and will be headed up by Signature Development Group and Peninsula Innovation partners on behalf of Meta Platforms, Inc. You can learn more about the mixed-use development here. In addition, here is a link to all the municipal approval drawings on the City of Menlo Park website. Below is the master plan of the entire urban village, showing the new uses, buildings, and open spaces.
These idyllic settings look like pure perfection for those able to land a home or office in these “Truman Show-esque” “urban villages.”
While I love the idea of living inside Google, insert ironic face emoji here , I feel like I already do—just online. The more time I spend on my computer in a virtual world, the less I like the idea of living in a space owned by big tech.
Call me a Populist, but I’m not sure I want Google and Meta to own my information in both the real world and online. And while I’m not always a fan of the ACLU, can we get some privacy, please?
The other issue I have with these “urban villages” is when you have a neighborhood that is totally designed by one architect or development company, you end up with a bland, vanilla, boring place with no real heart.
In Florida, Disney and Universal are getting involved in the Orlando area. Universal Studios, in conjunction with local developer Wendover Housing Partners, is planning Catchlight Crossings. This project is intended to create affordable housing for the company’s employees by adding more than 1,000 apartments near its theme park. The project is expected to deliver units for lease in 2026. The provision of more than 20 acres of land for the project is part of Universal’s larger plan to create housing diversity named Housing for Tomorrow.
Similarly, Disney donated 85+ acres for the development of more than 1,450 mixed-income apartments near its Flamingo Crossings Village. The intent is to create housing for theme park workers so they can live in the area comfortably after the massive rise in rents over the past 3 years. The development will be managed in partnership with the Michaels Organization, a prominent multifamily developer and owner. It is also a part of the larger Storyliving by Disney initiative, where they intend to develop mixed-use communities across the U.S. If the idea of living in a Disney-produced community is not new to you, you may be familiar with Celebration, FL, or Golden Oak on the Disney property.
While I don’t know if living in one of these corporate “branded” housing and mixed-use urban villages is for me, there are definitely some benefits. These types of developments are known for their cleanliness, safety, and reliability. Google, Meta, Disney, and Tesla are companies that are run with a focus on efficiency and service, which can translate into an exceptional experience. I have heard people rave about Celebration, FL, and how great it is to live there.
In addition to concerns about cultural and economic diversity, corporate real estate owners tend to evict residential tenants at a higher rate than those with non-corporate owners. This raises the question of whether this type of housing will solve the issue of affordability or make it worse.
Research from the Atlanta Fed found that corporate landlords are far more likely to evict tenants or, at least, use the threat of eviction. The trend holds true even when controlling for neighborhood variables such as education, employment, and racial composition.
The Atlanta Fed research report also noted that corporate landlords charge more in fees to squeeze more profits out of the same-size portfolio. This, of course, is basic corporate management of revenue and expenses and should be expected—but it’s not great if you’re living in these situations.
Ultimately, these types of company towns can be part of the solution to creating enough affordable housing in areas where there is a gap in supply. There is an urgency to house people, especially those working in service jobs or entry-level white-collar jobs. The ability to build housing fast enough and in close proximity to employers is certainly a great need. While other policy and market-based solutions can begin to alleviate the supply constraint issues, corporate towns provide near-term options for those working and living near a Google, Meta, or Tesla property.
Still, I’m not sure I want to live inside Google.
Dive deeper into this topic with these links:
https://www.bloomberg.com/news/features/2024-01-13/disney-dis-universal-theme-parks-build-homes-to-fill-workforce-housing-gap
https://www.zerohedge.com/personal-finance/are-meta-and-google-americas-next-big-landlords
https://www.corporatehousingtravelers.com/post/what-is-corporate-housing
https://creditnews.com/markets/are-meta-google-and-amazon-americas-next-big-landlords/
https://www.worldwideerc.org/news/mobility/the-global-corporate-housing-shortage#:~:text=Other%20factors%20affecting%20the%20shortage,labor%20in%20the%20construction%20industry%2C
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From Halfcourt Links: