California, United States (Reuters): The techno-giants including Facebook and Alphabet Inc's Google have announced to build a housing vicinity in Silicon Valley to facilitate its employees for the first time due to increasing housing prices creating tension among numerous employees.

Tech companies have responded with measures such as internet-equipped buses for employees with long commutes. Facebook has offered at least $10,000 in incentives to workers who move closer to its offices.

Those steps, though, have not reduced complaints that tech companies are making communities unaffordable, and they have mostly failed to address the area's housing shortage.

Sam Khater, deputy chief economist at real estate research firm CoreLogic said, "The problem with Silicon Valley is you don't have enough supply to keep up with the demand."

With Facebook's construction plan, the company said it wanted to invest in Menlo Park, the city some 72 kilometres south of San Francisco where it moved in 2011.

The company said it wants to build a "village" that will also have 1.75 million square feet of office space and 125,000 square feet of retail space.

John Tenanes, Facebook's vice president for global facilities, said in a statement, "Part of our vision is to create a neighborhood center that provides long-needed community services."

The 1,500 Facebook housing units would be open to anyone, not just employees, and 15 percent of them would be offered at below market rates, the company said.

Facebook said it expects the review process to take two years.

Alphabet has taken a smaller step, buying 300 modular apartment units for short-term employee housing, the Wall Street Journal reported last month.

Menlo Park Mayor Kirsten Keith said in an interview that there were concerns about whether the Facebook plan would increase traffic, a subject the city's planning department would study.

She said, though, that Facebook's plan fits with the city's own long-term plan for development, and that the city was excited about the additional housing.

Facebook's Tenanes said the density of the proposed development could also entice spending on transit projects.

"The region's failure to continue to invest in our transportation infrastructure alongside growth has led to congestion and delay," he said.