The software giant has announced that it will spend $500 million in order to make housing in Seattle and its surrounding suburbs more affordable for people in the community. The Seattle area has long seen rocketing housing prices due to the demand from high-paid employees from Microsoft and Amazon, which are both headquartered in the area.
This means that while well-paid Amazon and Microsoft employees might be able to afford a house in Seattle, other more critical members of the Seattle community, like nurses and teachers, are being priced out of the housing market. This in turn leads to a community where the well-off might have homes, but there’s a lack of people who can provide critical skills to the community because they can’t afford to live there.
Microsoft wants to help change this with its half-a-billion-dollar housing initiative. Writing in a blog post, Microsoft president Brad Smith and CFO Amy Hood said:
If we’re going to make progress, we’ll all need to work together as a community. We recognize that Microsoft is in a unique position to put the size of its balance sheet behind this effort. But we believe that every individual and every business, large and small, has a responsibility to contribute. This includes new initiatives to share data on where jobs are being created and the home locations and commuting distances for employees. It also includes new work to develop the detailed public policy changes that will be needed to provide more affordable housing.
Ultimately, a healthy business needs to be part of a healthy community. And a healthy community must have housing that is within the economic reach of every part of the community, including the many dedicated people that provide the vital services on which we all rely.
As for the $500 million initiative itself, Microsoft says that it will be divided into three separate pillars:
- $225 million at lower than market rate returns to inject capital to subsidize the preservation and construction of middle-income housing. These investments initially will be made in six cities east of Seattle and Lake Washington: Bellevue, Kirkland, Redmond, Issaquah, Renton, and Sammamish.
- $250 million at market rate returns to support low-income housing across the entire King County region. We believe that additional capital at market lending rates can help accelerate the construction of low-income housing across the region.
- $25 million in philanthropic grants to address homelessness in the greater Seattle region. We are announcing today the first $10 million of these grants. This will include a $5 million philanthropic grant to the newly announced Home Base program created by the Seattle Mariners, the United Way of King County, and the King County Bar Association. This program helps keep people facing eviction in their homes through legal aid, access to flexible funds and case management. We are also committing $5 million to support a new joint agency on homelessness being formed by the city of Seattle and King County.