It's been 3 years since Microsoft pledged to tackle Seattle's housing crisis. Here's where the effort stands.

Dive Brief:

Three years in, Microsoft’s pledge to address the affordable crisis in the Seattle area has resulted in the company allocating $583 million to date to the creation or preservation of approximately 9,200 housing units.
The tech giant launched its Affordable Housing Initiative in 2019 in response to the Puget Sound region’s housing crunch, which has been exacerbated by an influx of tech workers. Two years ago, Microsoft expanded its commitment to $750 million in total spending, including capital sourcing, land acquisition and grants to local organizations.
Microsoft announced last week that it would increase its investment in an expanded land acquisition program with the Washington State Housing Finance Commission from $25 million to $75 million, aiding developers in purchasing land for affordable housing. The company will also debut a new financing model that will help organizations acquire housing properties and convert them into middle-income housing.

Dive Insight:

Seattle has long struggled with a housing crisis. According to a report released by the city of Seattle in April 2021, nearly 46,000 households in the city spend more than half of their income on housing costs. Over the past decade, the report found, median home values have increased 80% compared with a 55% increase in county median family income, while the increase in new jobs has outstripped the creation of new housing units.

Some critics have placed the blame for the crisis on tech companies like Microsoft and Amazon, which brought in high-wage jobs and squeezed out middle- and low-income residents. Microsoft’s response, supporting the construction and acquisition of thousands of new homes, has been well-received by some local leaders. In a blog post, Microsoft Philanthropies Senior Director Jane Broom wrote that it will take more than Microsoft’s $750 million pledge to fix the housing shortage, however.

"As we continue our work to address the region’s affordable housing crisis, this effort is about much more than dollars spent and units produced," Broom wrote. "The need for housing across income levels is growing and the problem is becoming even harder to solve."

Microsoft has targeted its efforts across a range of initiatives focused on homelessness and low-income and middle-income housing. For example, a $17 million investment went to the housing authority in suburban Renton, Washington, to help purchase an apartment building and convert it to housing for families making between $69,000 and $139,000.

Through what Microsoft calls the Middle-Income Tax-Exempt Mezzanine program, the company will purchase bonds to fill a funding gap that exists between federal investments in low-income units and private investment in high-income units. The model, Broom wrote, "will unlock more opportunities for developers to create housing for people such as first responders, teachers and health care workers so vital to our communities."

In addition, Microsoft announced $3 million in cash grants to organizations fighting homelessness and a $3 million bridge loan to Congregations for the Homeless to support the construction of a new shelter for men experiencing homelessness. David Bowling, executive director of the nonprofit, said that bridge loan allowed his organization to start construction on its new shelter even before closing its fundraising efforts, potentially averting a year of delays for the project. Additionally, he said, the backing of a giant like Microsoft "sends a message to the entire community that this is something worth investing in."

The Microsoft effort joins other recent initiatives by large corporations to help fill the gap in affordable housing funding. Apple, for example, has pledged $2.5 billion to help fund affordable housing in California, and Google and Facebook each committed $1 billion to housing.

Bowling said that even as tech companies have contributed to the housing problem, he welcomes their support in tandem with work from the public and nonprofit sectors.

"I think it’s right that as we see amazing economic development in this region … and housing prices that continue to skyrocket and push people into homelessness, companies should be a part of the solution," he said. "It’s not just their job to solve this, but without them, we’d be missing a key element."