by Gary H. London

Google has recently invested $86 million to provide a major source of funding for the construction and operation of 480 affordable rental housing units for low-income families and senior citizens in seven communities throughout the West and Midwest.

The vehicle they invested in was the Low-Income Housing Tax Credit, a fund approach that was created more than two decades ago to instill market discipline into the development of subsidized housing. Low-income-housing tax credits are allocated by the federal government and awarded by the states to projects that meet requirements. Developers sell the credits to investors — generally financial institutions — who are seeking to reduce their federal income tax over a 10-year period.

But after the collapse of Lehman Brothers, the banks have been focused on liquidity and survival rather than offsetting profits. So other companies, including Google, Verizon and the insurance companies Liberty Mutual and Allstate, have stepped in, realizing that they can buy $1 worth of tax credit for 59 cents and receive double-digit yields on their “investment.”

Google and other companies, especially tech businesses, are the new investment players — not the banks who formerly invested in these funds. The tech companies make money, so they have an incentive to offset their taxable gains.

Investing in the Community

Whatever their motivation, the fact that they invest in housing is important to a community.

In fact, Google, Microsoft and Facebook, to name a few, actually participate in real estate development on a more personal level. Hearkening back to the “company towns” of the 1800s, these tech firms are now building an updated more generous version of those living spaces.

The company-town model has renewed appeal, declared a Newsweek magazine (Feb. 21 issue) article in which the weekly profiled examples of how companies participate in the housing and nurturing of their employees.

Google is seeking entitlements to offer on-site employee housing on NASA land near Mountain View to accommodate 60 midsize homes or 400 dorm rooms.

Microsoft has a corporate campus in Redmond, Wash., in which they have linked parcels to create a new town square with shops to serve employees.

Facebook bought a 79-acre space in Menlo Park to provide community-type services for their employees.

The basis is the old “company towns” in which logging companies and others housed their employees and their families. The criticism of this model is that it represents an almost paternalistic approach which speaks against personal freedoms.

The companies are motivated to achieve the results of attracting and keeping employees while helping workers avoid such mundane activities as commuting.

Economic Development

Through investment in housing programs or through participation and venturing in housing and community building, which benefit both companies and their employees, the companies are participating in a form of economic development. San Diego should not ignore this type of development in light of our urbanization problems.

The problems of traffic congestion and other inefficiencies associated with your job being located in one part of the region while your home is located in another area plague Southern California.

There are at least three local “battle fronts” on this issue: zoning and so-called “co-location”; transit planning and freeway expansion; and growth accommodation.

Zoning and co-location: Simply put, all of our cities must do a better job at linking employment and housing. And companies need to step up and participate. Right now, we do a terrible job. A few years ago the City of San Diego essentially codified a separation of work and housing through legislation dubbed “co-location.” City policymakers were pressured by local tech employers who didn’t want to see land currently zoned for them rezoned for housing. Instead of stepping up, as Google did, and realizing that their employees’ needs would be served through housing proposals in their neighborhoods, the companies revolted.

Transit planning and freeway expansion: Sandag has proposed freeway expansion along Interstate 5 and expansion on I-15 is being completed. A quick read of the headlines suggests how mad people are over this freeway expansion. At the same time, governments have now earmarked the greatest amount of funds ever for mass transit solutions.

Population Growth

Growth accommodation: Again, Sandag has projected more than 120,000 housing unit growth over the next 10 years, and essentially said that the region can accommodate it by simply in-filling our existing communities. Fat chance.

Neighborhoods are likely to revolt over density increases. The growing number of young families whose heads are employed in San Diego will want to raise their young families in single-family homes somewhere, perhaps Temecula. It’s cheaper and they are wanted there. They pay a lower price for a home, but this decision costs the region in terms of more freeway congestion.

I am simply suggesting that all of these issues are linked. If our region is to successfully grow and economically compete, we must both come up with good ideas and invite the participation of our citizens, especially the corporate ones.

Steve Hasse, senior vice president of forward planning for home builder Baldwin & Sons, a venerable and still very important player in the development of communities, sees the next wave of responsibility in the development of what he dubs “complete neighborhoods.” As a board member of Move San Diego, a local group (I am also on the board) which explores transit solutions, he is focused on reducing vehicular trips not just replacing them with transit trips. “The continued segregation of land use caused by the traditional Euclidean zoning model requires many of us to make a vehicular trip in many cases to destinations not served by transit,” Hasse said.

Companies like Google and Facebook are raising the bar for corporations and businesses. They have realized that they are the ones creating both the opportunities, but also contributing to the problems. Their direct participation in community building, or through tax incentivized vehicles to finance affordable housing, are ways in which they acknowledge the link between them and the greater community in which they reside.

Addressing quality of life for companies’ workers requires the businesses’ participation. The problem in San Diego is that the big employers have simply elected not to participate in the process of rebuilding a great community.