Microsoft Commits $500M to Affordable Housing in Seattle
- Jan 18, 2019
One of the world’s biggest tech companies is taking on the affordable housing crisis. Microsoft announced this week that it is committing $500 million toward advancing affordable housing solutions, through loans and grants towards construction and preservation of housing units.
Of the $500 million, $225 million will be invested at lower than market rate returns to inject capital to subsidize the preservation and construction of middle-income housing, the New York Times reported. The investments will be made initially in six cities outside of Seattle: Bellevue, Kirkland, Redmon, Issaquah, Renton and Sammamish.
Another $250 million will be invested at market rate returns to support low-income housing across the entire King County, Wash. region. The remaining $25 million will go toward philanthropic grants to address homelessness in the greater Seattle region.
“We believe that additional capital at market lending rates can help accelerate the construction of low-income housing across the region,” the company wrote in a blog post announcing the investment.
FILLING THE GAP
The tech giant presented data showing the gap between job growth and housing growth in the Seattle area, where the company is based. Since 2011, jobs in the region have grown 21 percent, while growth in housing construction grew just 13 percent. The gap caused housing prices to surge 96 percent in the past eight years, making the Seattle metro area the sixth most expensive region in the U.S.
Microsoft partnered with real estate listing database Zillow to analyze data on the region, which the company has been working on for the past several months in order to help address the affordable housing problem.
“We believe the state government has an important role to play as well,” the company wrote in the announcement. “In the state legislative session that began this week, we’ll encourage the legislature to support the private sector by making additional housing investments and through policy changes to preserve and develop affordable housing.”
A rapid hiring pace by tech companies over the last several months has led to a surge in multifamily construction in the Seattle area, along with soaring single-family home prices.