The company is set to create a purpose-built village, including supermarkets, swimming pools and a visitors’ centre, near its offices in Menlo Park, California.
Detailed plans published online show a large campus with homes, parks and office space.
Firms such as Google and Facebook have transformed the west coast since the tech boom began more than a decade ago.
However, house prices have rocketed as workers flock to the area, putting pressure on transport infrastructure and a limited housing supply.
Local people say the changes have made the area unaffordable, and workers endure long daily commutes.
“The problem with Silicon Valley is you don’t have enough supply to keep up with the demand,” said real estate economist Sam Khater.
John Tenanes, Facebook’s vice president for global facilities, says the plan for homes is part of the social network’s vision “to create a neighbourhood centre that provides long-needed community services”.
In an online statement Mr Tenanes said the project would be planned with the input of community leaders and that 15% of new homes would be priced below market value.
He also suggested congestion had been caused by a regional “failure” to invest in transport infrastructure, and said he hoped the new campus might encourage more development.
Menlo Park mayor Kirsten Keith said the city was “excited” at the prospect of new housing for the area but expressed concerns that the plan would increase the strain on local infrastructure.
In previous attempts to address the problem, Facebook has offered employees transportation on internet-equipped buses and incentives of at least $10,000 for those moving closer to the office.