It was only a couple of weeks ago that I was writing about the Google City, in Toronto, and now the tech giant is making property headlines, again.
This time, the firm has announced that it’s going to fix the Silicon Valley housing crisis.
Silicon Valley, or at least the San Francisco Bay area into which Silicon Valley has plonked itself, the latest example of that great American tradition of land grabbing, was never designed to house the world’s biggest tech companies.
Its stark desert landscape had no desire to be a property hotspot with an ever-increasing population, watched by the globe.
That’s why it now has a serious housing problem. With, it seems, an unwillingness from most parties to undertake any new residential construction projects, the problem has been allowed to fester.
Perhaps growing impatient, or perhaps listening to the disquiet of its staff, Google has announced it will tackle the housing shortage by teaming up with modular homes company, Factory OS.
Together, they promise to build 300 apartments in the Valley, a deal reported to be worth $25-30 million.
This is the latest in a series of events which have seen major tech companies make moves into the world of property.
Google announced its smart city, Facebook promised to build 1,500 apartments in California, Uber teamed up with Moda on Build to Rent developments, Elon Musk’s Tesla is producing solar roof tiles and we’ve come all the way from EasyJet to EasyProperty.
It seems the rules of business are changing; we are entering the age of ultra-diversification. A company that experiences extraordinary success now looks far beyond its established market for scope to expand and diversify. Market domination is no longer enough.
Why is this happening? I think there are a couple of reasons, maybe three…
1. They have cash to splash
They have money; more money than many countries, and are looking for ways to make use of it.
2. Traditional industry is slow to react
Google are swooping in to provide homes long after the traditional property and construction companies have proven reluctant to act.
3. To better the world
It should be observed that most of this ultra-diversification is helping to solve both local and global problems. Silicon Valley is in desperate need of more homes, Google, a key part of the community, is stepping up. Meanwhile, Tesla is helping to save the world by reducing our reliance on fossil fuels.
I guess even EasyProperty would claim it’s helping the people by making house buying ‘cheaper’, but I’ll leave you to make your own mind up on that one.
What does it all mean for the future of property?
I think it’s a really exciting time. Companies like Google and Facebook are famed for thinking outside the box, being bold and confident in decision making, with an astute insight into the trends of today and tomorrow.
Just imagine the possibilities if they keep showing an interest in the property industry.
And I see no great threat to our industry. The tech giants are simply acting as investors. In order to execute their ideas, they are enlisting the expertise of companies from property and PropTech; Google with Factory OS and Uber with Moda.
These acts of collaboration are really exciting to see. PropTech has been somewhat suspicious and secretive, something which is normal for a young industry which is yet to established its true potential. But as it matures, those initial concerns are wavering. PropTech companies are opening up to collaboration with peers both inside and outside the world of property.
Of course, before I get too excited, we do have to wait and see how successful these ventures transpire to be, but this, to me, is the best news I could possibly bring you right now, given where the property industry currently stands, and where it wishes to go.
Collaboration is essential if the property industry is to continue to bloom. If ultra-diversification contributes towards that, it’s all good by me. But what do you guys think?