Dive Brief:
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Microsoft will invest an additional $250 million to address the Seattle-area’s affordable housing crisis, on top of a $500 million commitment the company made last year.
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The new investment comes in the form of a no-cost line of credit to the Washington State Finance Commission and should help fund about 3,000 additional affordable housing units.
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With the latest injection, the tech giant has allocated $380 million of its total $750 million commitment to support the creation or preservation of more than 6,671 units, according to a release.
Dive Insight:
Microsoft says there was a deficit of about 316,000 middle- and low-income affordable housing units in the Puget Sound area last year, which was an increase from the 2018 gap of 305,000 units.
"The problem is straightforward: Our community isn’t building enough housing that’s affordable to low- and middle-income families, particularly in Seattle’s surrounding cities on the eastside of King County. The solution – as many of us know – is complicated," Microsoft Philanthropies Senior Director Jane Broom wrote in a company blog post.
However, the company did have some progress to report since last year. A Microsoft analysis found that the year-over-year growth rate of that deficit has decreased from 10.8% in 2017 to 3.6% in 2019. Other points of progress from the past year include a $60 million investment with the King County Housing Authority to preserve 1,209 middle-income housing units, and a $5 million grant towards 800 additional permanent supportive housing units for adults experiencing homelessness.
"We’re very pleased that they [Microsoft] are continuing to find creative ways to move the needle in terms of addressing the affordable housing crisis in the region," Rhonda Rosenberg with the King County Housing Authority told Smart Cities Dive in a statement.
Microsoft also announced three local affordable housing projects:
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Evergreen Impact Housing Fund: A partnership between the Seattle Foundation and Washington State Housing Finance Commission, with support by JP Morgan Chase & Co. Microsoft will add $50 million to the fund to help with the development of 1,250 low-income housing units on King County’s eastside.
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HomeSight Othello Square Project: A $2.5 million grant supporting a project that has 192 affordable housing units; a small business incubator and cultural preservation efforts in Seattle’s "most diverse neighborhood."
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Rise Together: A $2.5 million grant that is a collaboration between six nonprofits to preserve their communities by adding 400 low-income hunts in three Seattle neighborhoods.
"It will take all of us working together — business, philanthropy, government, service providers and community members — to reach our goal of creating 244,000 more affordable homes by 2040," King County Councilmember Jeanne Kohl-Welles wrote in a statement to Smart Cities Dive. "Microsoft has stepped up to the plate big time which hopefully will spur similar actions by our other major funding partners.”
Microsoft is just one of the tech behemoths attempting to curb the affordable housing crisis, a problem that many critics say these companies helped create. Apple recently pledged $2.5 billion to create more affordable housing in California; Facebook and Google have pledged $1 billion each in land grants; and Amazon has pledged $20 million for affordable housing near its new Arlington County, VA location.
Despite the billions invested, many remain skeptical about the effectiveness of private companies tackling the issue of affordable housing. Many of these commitments, particularly the land investments, stand to benefit the companies in the long-term, not local residents, according to reporting from NPR.
Nevertheless, cities are struggling to get ahead of the housing deficit without additional support. Los Angeles Mayor Eric Garcetti, for example, recently requested federal help with the city’s homeless problem, following a report that found the state is experiencing a 16.4% increase in homelessness, about six times the national rate (2.7%).
