The shortage of available land in Silicon Valley has made it difficult to increase the supply of housing. Google estimates the fund and the repurposed land could spur the building of at least 20,000 homes in the Bay Area.

“We hope this plays a role in addressing the chronic shortage of affordable housing options for longtime middle- and low-income residents,” Mr. Pichai wrote in a blog post

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Google made its announcement a day before the annual shareholder meeting for its parent company, Alphabet. In the past, the company has been criticized at those meetings for not doing enough to ease the housing problems in the area.

Google recently proposed plans to add new offices in Mountain View, where it has its headquarters, and in nearby San Jose. In those development projects, the company has pushed for a mix of office and retail space along with residential properties, a departure from the sprawling office parks that are common throughout Silicon Valley.

Since 2005, California has added 308 housing units for every 1,000 new residents, about half the level of New York, according to the McKinsey Global Institute. That long-term shortage has only been worsened by the growth of tech: Over the past eight years, the Bay Area has added about 676,000 jobs and 176,000 housing units.

The result has been punishing rent increases, rising homelessness and campers parked on Silicon Valley sides streets. California now has not only some of the highest wages in the country but also the nation’s highest poverty rate once the cost of living is figured in.