Silicon Valley giants don't just build offices now. They're also responsible for housing.

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Reid Hoffman, LinkedIn IPO

REUTERS/Mike Segar

LinkedIn and Google showed up Tuesday in front of Mountain View's city council with plans for a combined 4.1 million square feet of office space to accommodate their expanding workforce. But attached to their corporate blueprints came a stack of community benefits, and a key bargaining chip: housing.

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Nestled in between two of the country's most expensive housing markets, the city of Mountain View, California has seen not only extraordinary growth, but also the strain of Google's "appetite" (as one city council member called it) for real estate and the effect of tech wages on the affordability of housing.

To mitigate that, both LinkedIn and Google flaunted their housing options in front of the city council in hopes of swaying the politicians to vote for their competing plans. The corporate neighbors have been battling over North Bayshore, a primarily office-park area that Google has dominated for years, as LinkedIn tries to nudge its way in.

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Google had a clause in its expansion plans stipulating that if the council awarded the company at least 1.5 million square feet of office space, it would build 150 affordable housing units. Additional undeveloped company-owned land, although not current zoned for housing, could also come into play. Google VP of Real Estate David Radcliffe said that the company has contemplated building about 1,800 apartments on the land, and he suggested that it could potentially also include affordable housing.

It's a move that is becoming commonplace for tech companies as their surrounding communities feel the strain on their housing supplies.

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Facebook is building a $120-million, 394-unit apartment community within walking distance of its office that will include 15 affordable housing units subsidized by Facebook. And the company is potentially considering another 3,500 units, according to the Wall Street Journal. Google has also invested in other affordable housing units in its local community and out-of-state, including $6.5 million in a 51-unit Mountain View complex in 2013 and another $100 million in projects outside its hometown boundaries.

In the end, LinkedIn walked away the victor on a close 4-3 vote, and Google's housing plans are stymied.

LinkedIn won't be building apartments on site. But the $40 million housing impact fee that LinkedIn must pay could be used to build approximately 80 housing units, according to the estimates of the Mid-Peninsula Housing Corporation, which is working with LinkedIn.

These aren't company towns like Pullmans of the past, where virtually all of the residents were employees.

Facebook's apartments, which are likely closest to realization, would hold just about 10 percent of the company if filled with only employees. If revived, Google's plans called for affordable housing in addition to its employee block. And LinkedIn is passing the baton and their check to MidPen housing to focus on affordable housing.

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Still, it's clear that companies looking to expand in the San Francisco Bay Area must come to the table with more than just offices. The needs of the communities they're displacing in the process are just too large.

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