SV@Home has been a key partner in helping to maximize the amount of affordable housing and overall housing units in the Diridon Station Area and greater Downtown West. “We as an organization are very happy with how this has worked out,” says David Meyer, Director of Strategic Initiatives at SV@Home, an affordable housing advocacy group in Silicon Valley. “We need to get more affordable housing units built, and the only way to do that is by capturing funds and resources. Getting to 25 percent affordability with what Google is doing across the station area is a great achievement. We also recognize that it’s not over yet and there’s still a lot of work that has to be done.”

BY: Benjamin Schneider┃Nob Hill Gazette
PUBLISHED: June 8, 2022

San Jose leaders have big plans to turn Diridon Station into the “Grand Central Station of the West,” connecting the new and improved Caltrain service to BART and the California High Speed Rail. But these efforts won’t mean much if the area surrounding the station remains in its current state, where acres of surface parking lots are among the few destinations within reasonable walking distance.

Soon, the neighborhood is poised to change dramatically, thanks to a company that has historically been much more focused on digital real estate than physical real estate. Google’s Downtown West plan for the area surrounding Diridon Station, which was fully approved by the San Jose City Council last year, will see the construction of 4,000 homes and nearly 8 million square feet of office and retail space over the next decade.

The megadevelopment is just one of several plans in the works for high-density, mixed-use, transit-oriented tech campuses in Silicon Valley, including three other Google projects and one from Meta. Together, these projects represent a revolution in the way Big Tech companies approach the cities in which they’re headquartered.

They also raise new questions about the tech industry’s role in the life of the Bay Area. Already dominant in cyberspace, companies like Google and Meta will soon take on an even bigger role in metaspace. While their new campuses should help cities meet their ambitious housing production goals and bolster public transit systems, they could also create a sense of inescapability; that we are citizens of the platform, both online and off.

The tech campus has evolved over the last half century from a disposable landscape of nondescript office buildings to a jewel box collection of massive trophy properties jam-packed with amenities, to an office environment integrated into a dense urban neighborhood. These changes reflect the increasing rootedness of the biggest tech companies in Silicon Valley, and their efforts to address the massive housing and transportation problems they helped create.

Since the emergence of the Silicon Valley tech campus in the 1950s, form has always followed function. Stanford Research Park and Hewlett-Packard’s Palo Alto campus established the template of the low-slung, architecturally bland and profoundly car-dependent tech campus that developers and startups would follow in the coming decades.

“You had a business culture and a physical form that are related to one another and associated with one another,” says Benjamin Grant, an urban designer with Sitelab Urban Studio and formerly a policy analyst at SPUR, where he authored a report called “Rethinking the Corporate Campus.” (Sitelab is working with Google on its Downtown West plan, but Grant is not personally involved.)

“There’s a management style that comes out of Hewlett-Packard, what they used to call ‘management by walking around’ — the idea of a big, open flexible space that could be rapidly reconfigured for different kinds of teams working together,” Grant says.

This office design was conducive to rapid growth or contraction, a reflection of Silicon Valley’s boom and bust cycles. These economic forces begat what Louise Mozingo, a UC Berkeley architecture and environmental planning professor and author of Pastoral Capitalism: A History of Suburban Corporate Landscapes, dubbed the “hermit crab” model, where the campuses of obsolete tech companies would be inhabited by the next big thing. Silicon Graphics’ Mountain View campus, for instance, became Google’s headquarters. Sun Microsystems’ campus in Menlo Park became Meta’s.

Of course, today’s tech giants — Google, Apple, Meta and their ilk — have far eclipsed their predecessors in terms of size and wealth, rounding out the top 10 list of the world’s most valuable corporations. As they grew, these companies sought to create headquarters befitting their newfound status, commissioning eye-catching new buildings by brand-name starchitects.

The most famous such campus is Apple Park in Cupertino, designed by Lord Norman Foster and opened in 2017. The sleek ring-shaped structure has become one of Silicon Valley’s most recognizable landmarks, earning nicknames like “the spaceship” and “the doughnut.”

“Investments that various companies are making are investments with a long time horizon. It takes a lot more than the length of a pandemic to build a new neighborhood.”— Benjamin Grant

Not to be outdone, Apple’s peers began to push ahead with their own starchitect-designed offices. Meta, then known as Facebook, brought on Frank Gehry for MPK 21, a playful rectangular edifice with a 3.6-acre rooftop park completed in 2018. Google hired Bjarke Ingels for its Charleston East campus, a series of tent-like structures clad in “dragon scale solar skin,” as Google CEO Sundar Pichai described them at a press conference last year, and which opened in Mountain View in May.

These buildings are unquestionably unique from a design standpoint, but in their urban form they reprise many of the same tropes that defined the 1950s tech campus: closed off from adjacent neighborhoods and accessible almost exclusively by car or company shuttle. These architectural marvels, which had been in the works for years, came online in a world where the old philosophies of office design looked increasingly obsolete.

As the Web 2.0 boom reached its peak at the end of the last decade, and housing prices hit unthinkable highs, big tech companies were feeling the heat. “Jobs-housing imbalance” and “supercommuter” entered the popular lexicon. Vast homeless encampments began to tarnish Silicon Valley’s sparkling image. Even well-compensated tech workers found themselves taking on multiple roommates and enduring harrowing commutes. Meanwhile, more and more tech companies, like Salesforce and Twitter, were embracing downtown San Francisco as their headquarters, luring top talent with the promise of easy commutes plus a plethora of culinary and cultural destinations nearby.

“The past 10 or 15 years have been a period of tremendous flux and change in the world of technology campuses, driven in significant part by the planning crises of the Bay Area: the housing crisis, the transportation challenges, the cost of doing business here, and our general failure to grapple with regional growth in an effective way,” Grant says.

In 2019, the tech giants responded with their most abundant resource: cash. One after the other, Google and Meta made $1 billion pledges to affordable housing in the Bay Area. Apple upped the ante to $2.5 billion. Those pledges, combined with a desire to maximize the value of their land and create workplaces that would attract top-tier talent, helped create the conditions for the latest generation of campuses. So far, these developments exist only on paper, but several are moving forward quickly, despite the disruption caused by the pandemic.

While Bay Area companies rethink their office strategies, “the urgency for housing remains,” Grant says. “The investments that various companies are making are investments with a long time horizon. It takes a lot more than the length of a pandemic to build a new neighborhood.”

Google’s Downtown West plan is the furthest along, with vertical construction beginning as soon as next year. During the planning stage, local activists got Google to commit to a $200 million community benefits agreement, funding anti-displacement measures, workforce development training and other community programs, as well as 1,000 units of on-site affordable housing.

“We as an organization are very happy with how this has worked out,” says David Meyer, director of strategic initiatives at SV@Home, an affordable housing advocacy group in Silicon Valley. “Getting to 25 percent affordability with what Google is doing across the station area is a great achievement. … We also recognize that it’s not over yet and there’s still a lot of work that has to be done.”

But Google’s development plans go well beyond San Jose. The company is planning three other massive, mixed-use campuses throughout Silicon Valley — two in Mountain View and one in Sunnyvale. Collectively, these projects could yield nearly 20,000 homes, with 20 percent offered as affordable housing, and more than 10 million square feet of office space. Two of these projects, Middlefield Park in Mountain View and Moffett Park in Sunnyvale, would straddle a VTA light rail line, providing convenient transit connectivity to the campus — a rarity in Silicon Valley.

Over in Menlo Park, Meta is in the midst of the environmental review process for Willow Village, a new neighborhood with offices and 1,730 homes, with 18 percent to be affordable. The development will include a new Main Street lined with shops and a quarter-mile-long elevated park à la New York City’s High Line.

These massive, ambitious developments are possible in part because of Silicon Valley’s disposable landscapes of yesteryear. “These are places where you can come in and completely redo everything without there being massive direct displacement of people,” Meyer says.

These proposals also come at a time when city governments are facing increased pressure to approve housing development. By giving these projects the green light, Menlo Park, Mountain View and Sunnyvale could take a big bite out of their state-mandated housing production goals.

In fact, these housing laws are what enabled the approval of The Rise in Cupertino, the closest thing Apple has to a mixed-use megadevelopment of its own. The Apple Park–adjacent project, which includes 2,400 units, half of which will be below market rate, and over 2 million square feet of office and retail space, was approved against the will of the Cupertino City Council thanks to SB 35, a law that streamlines development in cities behind on their affordable housing goals. Currently under construction, the Rafael Viñoly–designed project will include a 29-acre living roof — the world’s largest — putting Meta’s 3.6-acre rooftop park to shame.

As the tech giants get into the housing business, they’re working to turn the tide of a housing shortage that’s been decades in the making. And in some respects, their efforts are one step forward and two steps back: Despite its massive housing component, Google’s Downtown West development will itself produce many more jobs than homes. That’s partly a reflection of the fact that office development is far more profitable than housing development. The Bay Area projects with the highest percentages of affordable housing — Downtown West, The Rise and the San Francisco Giants’ development at Mission Rock — are made possible by cross- subsidizing the housing component with the office component.

“We need to get more affordable housing units built, and the only way to do that is by capturing funds and resources,” Meyer says. For now, channeling the profits from office development “is one of the main ways that we’re able to do it.”

As for the critique that Google and Meta are re-creating the company towns of yore, Grant doesn’t buy it. “I think we need to be careful about scolding companies for not doing their part to meet their housing needs and then scolding them for doing their part to meet their housing needs,” he says. “To the extent that these very, very large, wealthy organizations are starting to take seriously the need for a more efficient and sustainable land-use pattern, that’s really important.”

But to do so, these tech companies are going to have to get used to a different pace of doing business. “These companies like to move fast and break things, solve it by next year,” Grant says. “But it’s taken us an entire generation to get ourselves into this housing crisis, and it’s going to take at least another generation to get out of it.”

And What About San Francisco’s Vertical Campuses?

In April, when Elon Musk tweeted about Twitter company headquarters being turned into a homeless shelter, a shiver ran down the back of San Francisco. Things already seemed uncertain for the City’s urban tech campuses, which gleamed so brightly above before COVID, yet now seem to loom like giant question marks.

When a political daredevil scaled Salesforce Tower in May, some joked it was the first day that someone worked on every floor of the building in two years. While Silicon Valley tech companies are expanding their office space again south of the City, sometimes in vast projects such as Google’s mixed-use projects in the South Bay and Meta’s projects on the Peninsula, is San Francisco’s urban tech scene collapsing?

The answer is no, says Colin Yasukochi, executive director of tech insights for CBRE Group, a $28 billion commercial real estate services and investment firm. Instead, here’s what is happening:

San Francisco did two things very well two years ago. We shut the City down and set remote workers up. Those remote workers have a lot of power in tech, and they are voting with their backsides by keeping them on the couch. “Because of the very tight labor market for tech talent we have here in the Bay Area, employees have a lot more bargaining power to shape return-to-office policies than they would under most ordinary circumstances,” Yasukochi says. “What’s really interesting is, when you look at where a lot of these younger folks live in the City — whether it’s the Marina or the Cow Hollow area, or parts of Pacific Heights — those neighborhoods are bustling with people going to restaurants and bars and stores. They’re just not really coming back to the office yet.”

But that doesn’t mean the urban tech campus is in danger of disappearing. Young tech workers “want to live in urban areas where there’s things to do and they can meet people and socialize. I don’t think that pattern of human nature is going to change,” Yasukochi adds. Still, it’s going to take a while for offices to fill up again — and that may only be midweek. San Francisco offices are now about 30 percent full again, CBRE data shows. Salesforce says about a quarter of its San Francisco workforce is going back to the office at least some of the time. LinkedIn, which has a beautiful building at 222 Second Street with firehouse-sized glass doors, says 87 percent of its employees want to come into the office at least some of the time.

Twitter, steeping in Musky uncertainty, did not respond to requests about its San Francisco office plans. But Yasukochi says the urban tech scene and Twitter workers are not as vulnerable as they may seem right now.

“If you decide, ‘I’m going to move to another state or another city,’ it’s not like you can expect even a significant portion of your workforce to move. Most of them have some sort of grounding here in the Bay Area. They’re not just going to up and move. Oftentimes when a company announces they’re moving to another city, it’s administrative. They may move a few key employees.”

Got that? Don’t worry about urban tech going away — even if Musk tries to take Twitter to Texas. But there is something real to worry about: inflation, or a possible recession.

“Inflation is here. It’s real. It’s affecting a lot of people and a lot of things,” Yasukochi says. “That’s something we’re watching closely, and so far we haven’t seen additional impacts beyond what the pandemic has already created. But it could be an issue in the future.” San Francisco is resilient and has ridden out the earthquakes of previous tech booms and busts, he continues. “Whatever the next big thing is, we’re going to be part of it.”

In the meantime, the downtown tech workforce is appreciating the gradual comeback.

“I waited in line for lunch for 20 minutes last week,” says Jack O’Holleran, CEO of the blockchain startup Skale Labs, which has offices in the Ferry Building. “That’s a good sign. It hasn’t happened in two years.”

It’s the little things.