The US has a long history of corporate towns. Milton Hersey build Hersey, Pennsylvania for Hersey Chocolate employees to live without having to experience “poverty, nuisances, and evil.” US Steel built Gary, Indiana and Kohler Plumbing build Kohler, Wisconsin. And, of course, Apple built Zhengzhov in China, population now 350,000, to accommodate Chinese workers who build the world’s iPhones.
These company towns earned mixed reviews from their employee residents as the economy and markets changed over time. In Kohler alone, 40 striking employee residents were shot and 2 striking employee residents were killed in a clash over labor conditions.
Hardy Green, the author of The Company Town, says that today’s company campuses (Apple, Intel, Google, Facebook, Amazon, etc.) that provide free meals, nap pods, concierge services, onsite laundry services, etc. may be “…the best option for many, just as a benevolent dictatorship can be okay for as long as the benevolence lasts.”
The Silicon Valley Leadership Group and Silicon Valley Community Fund tell us that from 2010-2015, the number of jobs in the region grew by 367,064. The problem…only 57,094 housing units were added to accommodate that growth of +360,000 people.
Currently, cities across the Silicon Valley region are struggling to provide housing for these people and the result is that many of them have horribly long commutes (+2 hours in each direction) and/or live in their cars. The median price of a neighboring single family home in the area is now $968,000 and the median apartment rental in Silicon Valley has increased +37% since June 2011.
Two such companies that have added to that growth are looking to build company towns, Google and Facebook. Let’s take a look at both.
Google Town, aka Alphabet City, is intended to accommodate the influx of people who have already taken and will continue to take thousands of Google jobs.
The Mountain View City Council just approved Google Town’s ambitions to build a mixed-use development in its North Bayshore neighborhood. There are to be 10,000 units, mostly apartments, 5,000 homes, and 3-6M square feet of office/commercial space. The residential units can be 15 stories high. Google currently owns +50% of the land slated for this development.
Mark Golas, VP and CEO of Goggle’s Global Real Estate Investment and Development, said, “We are pleased with the Mountain View City Council’s decision to adopt the (plan) and look forward to collaborating with the City of Mountain View to create a complete neighborhood for the community to live, work, play and stay.”
Google is promising to place the public “in the very heart of Google’s vibrant community.” Its carrots include office buildings, stores, cafes, gardens, theaters and products to test and drive.
Facebook’s real estate vice president, John Tenanes, tells us, “We want to balance our growth with the community’s needs.” Facebook is offering a custom built city on its 59-acre site. Wedged between the Menlo Park neighborhood of Belle Haven and the City of East Palo Alto, Facebook’s town, aka Zucktown, is planning for 1,500 apartments, 225 of which are to be offered below market rates. Additionally, 8 acres within Zucktown are to be devoted to parks, plazas, bike-pedestrian pathways, pools and open to the public.
Part of Facebook’s commitment to build Zucktown is to finish a pedestrian bridge over an expressway that connects the proposed town with the railway running alongside the property. This bridge would provide access for bikers and birders to trails that encircle the San Francisco Bay.
Will Alphabet City and Zucktown actually be built? Likely, in regards to Alphabet City and maybe, in regards to Zucktown. Facebook has to take some steps to quiet furor over Cambridge Analytica and privacy breaches. And in regards to both Zucktown and Alphabet City, if/when they are built, will they actually help to solve their employees’ and Silicon Valley’s housing problems or will they just be creating more?