Google said it would build 10,000 units of desperately needed housing in Silicon Valley — but there’s a catch (GOOG)

An artistic rendering shows the new Google campus in Mountain View’s North Bayshore area.City of Mountain View

Google seems to be as much a real-estate developer as a search engine these days.

The tech giant wants to build a sprawling new campus in the North Bayshore area of Mountain View, a city in Silicon Valley that already hosts a majority of the company’s properties.

But there’s been a hiccup in Google’s play for the development, which could include nearly 10,000 homes, 3.6 million square feet of office space, and a public park.

The Mercury News reports that Google is threatening to block the construction of 9,850 homes in North Bayshore — which the company said it still supports — unless city officials give it permission to build another 800,000 square feet of office space beyond its original proposal.

The Mountain View City Council found itself in a standoff with the company on Tuesday night. Google warned that it would drop housing from the project if it doesn’t get its way.

Joe Van Belleghem, senior director of design and construction for the Bay Area at Google, reportedly told city officials, “Just to be clear: no new office; no new housing.”

“That caught everybody by surprise,” Mountain View Vice-Mayor Lenny Siegel told The Mercury News. “Forgetting the issue that Google has loads of cash, my view on that is that … our North Bayshore plan shouldn’t make the jobs-housing imbalance appreciably worse.”

An artistic rendering shows the new Google campus in Mountain View’s North Bayshore area.City of Mountain View

The San Francisco Bay Area has too many workers and not enough dwellings to house them. This imbalance causes home prices and rent to climb sky-high. Google’s critics say that adding even more office space without proportional housing would worsen the housing crisis.

In a statement, Google reiterated its support for the desperately needed housing.

“We are supportive of the preliminary approval of a North Bay Shore precise plan which includes 9,850 units of housing, 1,600 of which would be affordable,” Belleghem said.

Siegel is optimistic that things will work out between Mountain View and Google.

“They have in general a high level of corporate responsibility and they’ll come to their senses,” Seigel told The Mercury News. “We are heavily dependent on them to do a lot of things we want to do, so they’re trying to use that to get what they want.”

The Mountain View City Council will vote in November on the final plan for North Bayshore.