Google will invest $1bn in housing throughout the San Francisco Bay Area, a region plagued by a housing and homelessness crisis that has in part been fueled by the tech industry.

The announcement comes as the tech giant prepares to expand beyond its headquarters in Mountain View and its offices in San Francisco to new campuses in San Jose and Sunnyvale. The $1bn would go toward supporting the development of 20,000 new homes over the course of 10 years, or roughly 68% of the number of units the Bay Area needs to build each year in order to meet population growth.

“As we work to build a more helpful Google, we know our responsibility to help starts at home,” Google’s CEO, Sundar Pichai, wrote in Tuesday’s blog announcement. “For us, that means being a good neighbor in the place where it all began over 20 years ago: the San Francisco Bay Area.”

The first step is to repurpose at least $750m of Google’s land currently zoned for office or commercial space into residential housing over the course of 10 years, allowing for the development of 15,000 homes “at all income levels”, Pichai wrote.

The remaining $250m will go into an investment fund to “provide incentives to enable developers to build at least 5,000 affordable housing units across the market”.

The company also pledged an additional $50m in grants through Google.org to not-for-profit groups focused on homelessness and displacement.

“For several months, we have encouraged Google to make a bold commitment to address our region’s affordable housing challenge,” the San Jose mayor, Sam Liccardo, said in a statement. “We look forward to working with Google to ensure today’s announcement manifests into housing that will benefit thousands of San Jose residents struggling under the burden of high rents.”

The Bay Area has suffered through a housing crisis over the past few years, driven by a lack of affordable housing fueled in part by the economic disparities created by the tech industry. While the industry continues to grow at exponential rates, affordable housing has not been built to meet the need – the Bay Area Council Economic Institute estimates that 200,000 people are forced to commute into the Bay Area each day from as far out as the Central Valley because they cannot afford to live anywhere else.

The day before Google’s announcement, Yolanda Chavez, a San Jose activist with Silicon Valley Rising, wrote a Medium post addressed to Pichai expressing her concerns that Google’s new campus could drive up her rent and force her out of her home.

“I’ve had to sublet a bedroom and my living room out to strangers,” she wrote. “Many of my friends have already been priced out, forced to move to Stockton or Modesto. One now lives in Los Baños, and has to drive back here every day to work. She leaves her house by 4am, doesn’t get home until 11pm, and barely sees her family.”

“I know that if Google comes to San Jose and doesn’t act responsibly to avoid driving rents even higher, I won’t be able to stay here either,” Chavez wrote.

Google’s investment is a “needle-mover”, said Matt Regan, senior vice-president of housing policy for the Bay Area Council Economic Institute.

“It’s not going to solve the region’s housing affordability problems in and of itself. But it sets the standard for others to follow,” he said. “What Google has done is go above and beyond, and I think it sets the standard for local governments as well that they need to go above and beyond to be part of the solution.”

The Bay Area has long struggled to meet its housing needs. From 2007 to 2014, the nine counties of the Bay Area permitted just 57% of the number of units needed to meet population growth, Regan explained. In pledging to support the development of 20,000 units, Google is vowing to take care of 68% of the 29,500 new homes the area is estimated to need each year.

Though Shanti Singh, communications coordinator with the not-for-profit Tenants Together, applauded Google for its investment, she questioned why only a quarter of the company’s overall pledge would go toward affordable housing.

“There’s an enormous need for funding for subsidized housing, especially for people who are being displaced in the vicinity of Google and Facebook and all these companies,” Singh said . “Everyone is struggling to find housing, but we need to be putting the priority on people who are suffering the most.”

Community activists have long called for tech companies to get involved in local social issues, especially the ones they helped create. Now that Google is stepping into the housing crisis, Singh hoped that the company would look into other issues happening within the company’s backyard, such as efforts to repeal a rent control measure passed in 2016 in Mountain View, where Google is headquartered.

“If Google wants to be a neighbor and stand up for the people who are being disproportionately displaced, it also means getting involved in keeping people in their housing,” she said.