Apple Commits $2.5B Toward California Housing Crisis
- Nov 05, 2019
Apple is looking to take a bite out of the housing crisis in California.
The tech giant announced it will commit $2.5 billion towards efforts to solve the severe lack of housing and affordable housing in the Golden State. Apple’s pledge follows similar announcements made recently by fellow big tech firms Facebook and Google.
READ ALSO: Will 2020 Bring a Housing Bubble?
It’s been a game of musical chairs over the past several months, as the some of the biggest and most well-known tech firms in the world have traded off announcing multi-million and billion-dollar investments towards combating the housing crisis gripping cities across the country.
Microsoft kicked off the commitments in January, when it announced it would invest $500 million to affordable housing in the Seattle area. Five months later, Google doubled Microsoft’s pledge with a $1 billion investment in Bay Area housing and a plan to build 20,000 units. And just two weeks ago, Facebook announced it was committing $1 billion toward affordable housing efforts in California.
A five-piece plan
Apple’s investment is broken down into five segments:
- $1 billion toward an affordable housing investment fund: this will go toward a first-of-its-kind affordable housing fund in California that will allow the state and others with an open line of credit to develop and build new housing for very low- and moderate-income residents.
- $1 billion toward a first-time homebuyer mortgage assistance fund: this will help first-time homebuyers with financing and down payment assistance.
- $300 million toward Apple-owned and available land for affordable housing: Apple plans to make land it owns in San Jose—worth about $300 million—available for the development of new affordable housing.
- $150 million to the Bay Area housing fund: in a public-private partnership, Apple will launch a new affordable housing fund with partners like Housing Trust Silicon Valley. The fund will offer long-term forgivable loans and grants.
- $50 million to support vulnerable populations: this will support the nonprofit organization Destination: Home, which works to end chronic homelessness in Silicon Valley.
Apple CEO Tim Cook said in the announcement that the company, which has called Silicon Valley home since 1976, feels a “profound civic responsibility” to help keep the region a vibrant area where people can afford to live. As housing costs have skyrocketed, residents have been leaving the area in droves. Between April and June of this year, nearly 30,000 people left San Francisco, according to the US Census Bureau, while homeownership in the Bay Area hit a seven-year low.
Christopher Ptomey, executive director of the Terwilliger Center for Housing at the Urban Land Institute, told Multi-Housing News that while Apple and other companies committing funding and land to develop low-cost housing is notable and a step in the right direction, it also illustrates “the failure of markets and public policy to meet critical housing needs.”
“Apple’s commitment is substantial and much needed but will not have its intended impact without the support of local government and residents,” said Ptomey.
“Even with enhanced access to financial resources, the costs associated with regulatory requirements and processes and with combating NIMBYism frequently make it difficult, if not impossible, to produce units affordable to moderate- and lower-income households.”