Microsoft pledges $ 500 million to address the Seattle housing crisis and it can halve the rent for half of its earnings
Microsoft said Thursday that it will spend $ 500 million on the serious need for affordable housing in the Seattle area.
The company recognized a problem that had helped to create its own success by encouraging booming technical industry in the region, where the Amazon brand of billions of dollars also has a base.
As the cost of housing has increased enormously as a result of job seekers, such teachers and nurses in the city of Washington are exhausted to live on from their job locations and have caused a crisis.
Microsoft (the Microsoft Visitor Center in Redmond, Washington is shown) pledged $ 500 million to address homelessness and develop affordable housing in response to the growing affordability gap in the Seattle area
A man lies in a tent with others in the neighborhood, under and near a viaduct in Seattle (February 2016). $ 25 million will be used for scholarships to tackle homelessness and deportation
Microsoft Corp. President Brad Smith spoke Thursday at a press conference in Bellevue, Washington, to announce a $ 500 million promise by Microsoft. Affordable housing is for low- or middle-income workers in Seattle
In addition to those people with a good average income who spend more time and money on their commute, which lowers their quality of life, the problems include that tent camps full of homeless people become a normal phenomenon.
"A healthy company must be part of a healthy community", wrote Microsoft President Brad Smith and Chief Financial Officer Amy Hood in a blog post announcing the financial commitment.
& # 39; And a healthy community must live within the economic reach of every part of the community, including the many dedicated people who provide the vital services that we all trust. & # 39;
While $ 25 million will be used for subsidies to tackle homelessness, including money to provide legal assistance to people being deported, Microsoft will distribute the rest of the money in two other ways.
It provides loans from the market or less than the market price to developers who want to build affordable housing, the latter of which can make a big difference in what landlords charge for rent.
A total of $ 225 million Microsoft is committed to making loans at yields below the market rate.
Smith (photo) and Microsoft CFO Amy Hood have worked together with the real estate company Zillow for the past eight months. They felt that providing short-term loans could help developers quickly acquire government-owned land while attracting long-term financing for construction
Hood (photo) and Smith wrote: "Although this is only one of the many ways we will try to use money properly, this illustrates that our financial commitment can have a multiplier effect.
Housing policy researcher at the Seattle-based Sightline Institute, Dan Bertolet, said research suggested to repay loans with 2 percent interest, rather than 5 to 6 percent interest, owners of buildings could allow to charge the rent they charge shrink by about half.
Microsoft will borrow the remainder, $ 250 million, against market interest to finance the construction of low-income housing.
In his announcement, Microsoft urged other companies, the state and local authorities to intensify and make it easier to build affordable housing.
The company asked the state to double the budget of $ 100 million for its Housing Trust Fund, which provides scholarships to developers of low-income housing.
Smith and Microsoft Corp. CFO Amy Hood wrote that Microsoft has been working with Seattle-based real estate agency Zillow over the past eight months to investigate housing data and that it has worked with others to study best practices for affordable housing around the world.
One of the lessons was that providing short-term loans could help developers quickly acquire government-owned land while attracting long-term financing for construction.
Loans can go to King County Housing Authority. Executive Dow Constantine spoke Thursday
The mayors of nine cities to the east and south of Seattle promised to tweak building regulations and zoning plans, to streamline consent requirements and to make too little public land available for affordable housing. Seattle mayor Jenny Durkan is shown Thursday
With these and similar investments it is possible to borrow money, accelerate progress, get money back and then lend this money back & # 39 ;, they wrote in a blog. Although this is just one of the many ways we want to use money well, this illustrates that our financial commitment can have a multiplier effect. & # 39;
Mayor of the Auburn backyard in South Seattle, Nancy Backus, called Microsoft's commitment exemplary.
Although the neighborhood is known for some of the cheapest properties in the area, new homes run at least $ 565,000 – far above the city's average value of about $ 375,000.
Pressure from people who left Seattle and left the Eastside because it is no longer affordable has really become a touch on Auburn, & # 39; she said Thursday. We are very hopeful that some of the available financial resources will help to ease that burden and keep affordable housing affordable. & # 39;
In combination, the mayors of nine cities to the east and south of Seattle – including Microsoft's home town of Redmond – promised to tweak construction regulations and zoning plans, streamline consent requirements, and make public land that was of little use available for affordable housing. .
The initiative of Microsoft is because the technical giants of Seattle are faced with calls to help solve the housing crisis of the region.
Last year, the Seattle City Council issued a & # 39; main tax & # 39; on employee hours at large companies – only to abruptly abolish under pressure from Amazon.
A few months later, Amazon founder Jeff Bezos announced a contribution of $ 2 billion to set up a fund that will open kindergartens in low-income neighborhoods around the US and give money to nonprofits that help homeless families .