Microsoft’s president Brad Smith and chief financial officer Amy Hood announcing $500m investment to tackle the housing crisis, 16 January 2019 (Microsoft)

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Microsoft to pump $500m into affordable housing

18 January 2019 | By GCR staff | 0 Comments

In a bid to tackle a housing crisis which the success of companies like itself helped create, software behemoth Microsoft will invest half a billion dollars in affordable homes provision in the Puget Sound region of Washington State, where its headquarters are.

On Wednesday (16 January) the company said housing costs have risen across the region, which includes Seattle, Microsoft’s home of Redmond, and nine smaller cities, hitting people on lower and middle incomes.

Thanks to the success of Microsoft, Amazon, and other tech companies in the area, Puget Sound has become the sixth most expensive region in the country, where a 21% increase in jobs since 2011 has been met with only a 13% increase in housing units, Microsoft said after an eight-month probe into the issue.

While technical staff of these firms may enjoy housing security, teachers, nurses, first responders and other workers face long commutes and homelessness, Microsoft’s president Brad Smith and chief financial officer Amy Hood wrote in a blog post, noting that Microsoft set up in the city in 1979 with just 30 employees.

“If we’re going to make progress, we’ll all need to work together as a community,” they said.

“Ultimately, a healthy business needs to be part of a healthy community. And a healthy community must have housing within the economic reach of every part of the community, including the many dedicated people who provide the vital services on which we all rely.”

Most of the cash will be disbursed over the next three years in the form of loans worth $475m and a $25m grant to tackle homelessness.

Microsoft will lend $225m at below market rate returns for preserving and developing new middle-income housing on King County’s Eastside, and $250m at market rate returns to support low-income housing across the King County region.

Twenty-five million dollars in “philanthropic grants” are on offer to address homelessness. Two initial commitments include $5m for local non-profits to prevent people from becoming homeless by providing legal representation, helping with back rent and offering caseworker help; and $5m to help the city of Seattle, and King County, to create a “consolidated entity” to address homelessness.

Accompanying Microsoft’s announcement was a joint declaration from the mayors of nine of the largest cities around Seattle to “take steps” to increase affordable housing capacity.

Mayors of Auburn, Bellevue, Federal Way, Issaquah, Kent, Kirkland, Redmond, Renton and Sammamish will “consider changes” in zoning to increase the pipeline of housing in selected areas, providing desirable public land near transit locations, addressing permitting processes and fees, and creating tax incentives for developers.

The New York Times called Microsoft’s initiative the “most ambitious effort” by a tech company to address inequality, and notes that it comes less than a year after Amazon resisted proposals for a new tax in Seattle on big companies to build affordable housing and fund services for the homeless.

Photograph: Microsoft’s president Brad Smith and chief financial officer Amy Hood announcing $500m investment to tackle the housing crisis, 16 January 2019 (Microsoft)