Working for Quicken Loans, a company that believes in investing in the local community or “socially responsible investing,” hearing about another large corporation doing the same always piques my interest.
Even though there are tax benefits for companies who invest in community-related projects, I think the goodwill resulting from these endeavors is worth more than any tax credit… and also the fact that people in need benefit from it makes this a win-win situation.
What Is Socially Responsible Investing?
You’re probably wondering what “socially responsible investing” means. It’s an investment strategy also known as sustainable or ethical investing being used by many companies, including Google. From the company’s perspective, it helps diversify their portfolio by focusing on projects or investments that meet certain criteria. Some focus on a specific geographic area, others in the type of project or investment. For example, Quicken Loans has made significant investment in the city of Detroit by buying and renovating properties in need of some TLC.
This type of strategy has grown by more than 22% to $3.74 trillion in total managed assets in the last couple of years, according to Forbes. Companies and investors are trying to not only focus on the strategy that yields the highest return, but also to be socially conscious and sustainable.
Google Expands to the Real Estate Market
We all know about Google and their heavy investment in innovation and technology. For example, remember the $280 million deal to fund solar homes and the 2010 wind farm? Did you know that they’re now investing in real estate through affordable housing?
Yup, Google is now in the real estate business. They’ve expanded their portfolio with $6 million in a housing development near headquarters in Silicon Valley in Mountain View, California. Not only is Google offering affordable housing to those making an average of $44,000 a year, half the median income of that area, but it has also added the “Google factor” to the development’s amenities. Residents of the Franklin Street Family Apartments enjoy free internet access and computer equipment, a fitness room, courtyard, community room, kids’ play area and other services like ESL and computer classes. To check out a slideshow of Franklin Street Family Apartments, visit the Silicon Valley Business Journal.
The Mediterranean-inspired building is an environmentally friendly development with solar panels and energy-efficient appliances, among other “green” features. The units have one to three bedrooms and up to two bathrooms, and the rent prices range from $837 to $1,122. The median rental price in the greater Santa Clara County area is $2,693, according to the Zillow Rent Index.
As interest rates rise and are expected to be at or above five percent by next year according to Zillow’s director of economic research Svenja Gudell, it’s important to keep investing in affordable housing to alleviate the increase of home prices and interest rates to those who need it the most.
This isn’t the first time Google has invested in real estate. In 2010, Google invested $100 million into eight projects, including a senior housing complex.
What are your thoughts on Google’s investment in the real estate market?