Million dollar houses in Silicon Valley should only cost $50,000: Google CEO Larry Page

Google CEO Larry Page thinks houses in Silicon Valley are needlessly expensive. He believes million dollar homes should be going for $50,000 (approx. Rs 30 lakh). In an interview with Richard Waters of the Financial Times, Page’s thoughts on the issue were elaborated as follows:

Even more than technology, he puts this down to policy changes needed to make land more readily available for construction. Rather than exceeding $1m, there’s no reason why the median home in Palo Alto, in the heart of Silicon Valley, shouldn’t cost $50,000, he says.

However, Page’s idea that all it takes is changes in policy to free up development to create more housing units to drive down prices might not be so simple. New York City and its surrounding areas are just about as developed as it gets. Houses in the New York metro area cost nowhere close to $50,000.

Could policies free up more development to increase supply and thus lower prices? Sure. But the infrastructure — trains highways, etc. — in the New York metro area barely supports all the people that live in it. If there were more people it would be a disaster.

And then, there’s other problems with $50,000 homes. It costs more than $50,000 to construct the homes. People that have already paid $1 million for their homes aren’t going to allow $50,000 to exist since it would wipe out the value of one of their biggest investments.

However, in response to that last argument, Page says, “You can’t wish away these things from happening, they are going to happen.”.