Question

Recently, Google, Inc. proposed an expansion to their facility in Mountain View, CA. The expansion would add office space for 10,000 new workers. To address concerns about traffic congestion, Google did not include a plan for additional parking in their proposal. Their intention was to provide the new workers with the incentive to use alternative transportation methods to get to work, thus preventing a negative impact on traffic in the area. The city of Mountain View turned down Google’s proposal, primarily because of concerns that the expansion would cause an increase in housing prices in the area. (https://www.mercurynews.com/2015/05/01/mountain-view-to-play-solomon-with-google-linkedin-expansion-plans/)

If Google’s proposal had been approved, what impact would the additional 10,000 workers have on the housing market in Mountain View?

Answer 1

Lack of parking space for the additional 10,000 workers would mean that workers would have to look for houses near to the Google office to cut their travel time as well as travel expenditure. This would have put tremendous pressure on the residential housing market of Mountain View, CA.

Since, it takes several years to build new houses, so the additional demand for residential housing would have put pressure on the house rent in Mountain View to increase. As a result of this, residential housing in Mountain View would have become significantly expensive in the short-run as well as medium-run till the time new houses are built in the long-term.