Opinion: Will Google and L.A.'s tech industry expansion make housing even more expensive?

Google Inc. is planning a major expansion in Playa Vista, and some see this as further proof that Silicon Beach, or Silicon Valley South, is only going to attract more companies and tech talent to the Westside.

This is great news and a welcome infusion of investment and economic opportunity in Los Angeles. But in growing the SoCal tech sector, let’s not replicate one of Silicon Valley’s biggest problems – the shockingly high home prices.

Thanks in part to tech wealth, Silicon Valley has the most expensive housing in the nation. A four-bedroom, two-bathroom house in Los Altos costs, on average, $2 million. And Silicon Valley has seven of the 10 most expensive cities for houses buyers, according to a Coldwell Banker report.


The median price to buy a home in San Francisco is $744,000, requiring an income of $145,000 a year, mortgage research firm said. But the median income is around $74,000, according to the Census bureau.

Things are not much better for renters. Housing costs in the peninsula, from San Francisco to San Jose, have doubled in the last five years. The average apartment in San Jose rents for $2,230. It’s even worse in San Francisco, which recently surpassed New York City as the most expensive rental market in the nation. A one-bedroom rental averages $3,350.

Right or wrong, the tech industry in the Bay Area has been blamed for fueling the high cost of housing and for gentrification that has made it difficult for longtime residents to stay in San Francisco and peninsula communities. That resentment turned into anger last year when protesters attacked private buses transporting Google workers from their homes in San Francisco to their jobs in Mountain View. Transportation officials made temporary peace by charging tech company buses a fee to pick up or drop off at public bus stops. But the underlying issues of housing and affordability remain.

Back to Los Angeles, where we have our own shortage of affordable housing. One study deemed L.A. the least affordable city in the nation because of high costs and low incomes. And a recent analysis found a buyer in Los Angeles County needs to take home $96,513 annually to afford a median-priced home, which was $481,900 in the third quarter.

But that price is hard to find on the Westside, where Google will expand. The median home price in Playa Vista – a master-planned neighborhood near Marina Del Rey – is $745,000, based on sales from August to November, most of which were condominiums, according to Trulia.

That price might be within range for the 6,000 well-paid, highly educated workers expected to be employed by Google. But based on Silicon Valley’s experience, each new high-tech job helped create four service-sector jobs, according to the Bay Area Council of Governments. Where are those cooks, retail clerks and preschool teachers working near the Google campus going to live?

As I said, the expansion of Google is good for Los Angeles. But wooing the tech industry and their affluent workers isn’t enough. Los Angeles leaders need to make sure the city is building the housing and transportation infrastructure to accommodate not just the engineers, but the nurses, cleaners, dental hygienists, carpenters and the other Angelenos who contribute to the local economy.

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