Microsoft is throwing an additional $250 million at the housing crisis in Seattle. This additional funding comes after the tech giant announced last year it would put $500 million into an initiative to build and preserve affordable housing in the region. Are they actually trying to fix the huge need for middle- and low-income housing and combat homelessness, or is this extra financial commitment merely a selling point for future employee recruitment?
The Breakdown You Need To Know: Seattle and King County, which is the area where Microsoft is located faces a severe lack of affordable housing and a homelessness crisis. A point-in-time in 2019 survey tallied more than 11,000 homeless people in King County. Black people represent 6% of King County’s population and have the highest homeless rate at 32%. These figures are a 23% over representation for African Americans in Seattle’s homeless sector, according to the U.S. Department of Housing and Urban Development’s American Community Survey. CultureBanx noted that for Latinos the numbers aren’t much better as they represent 15% of King County’s population and 10% of the homeless rate.
“The company knows the challenges it faces going forward and is aware of the huge need for affordable housing in the region,” said Jane Broom, Microsoft’s senior director of philanthropies in a blog post.
They have already allocated $380 million of the initial $500 million commitment. Specifically, the additional $50 million of the new $250 million pledge will provide a line of credit to help the Washington State Finance Commission finance about 3,000 more affordable housing units on the Eastside, in cities including Bellevue, Kirkland and Redmond.
Interestingly enough Microsoft plans to expand its headquarters in the Seattle area, adding 8,000 employees that will need places to live. Seattle’s Eastside suburbs which is near the the company’s main campus in Redmond, will be the primary focus of its affordable housing push.
It’s going to cost quite a lot to get housing on track in Seattle, and it could be argued that Microsoft could do more. To further put this into perspective for you, the company’s total $750 million commitment towards affordable housing represents just 2.3% of its 2019 net income. Microsoft has a market cap of $1.6 trillion dollars which didn’t happen overnight, just like the ensuing housing crisis.
Tech Tackling Housing: They aren’t the only tech company facing similar problems in the city where it’s headquartered. Social media giant Facebook (FB -0.83%) is following in the footsteps of other tech giants in the Bay Area, and announced a $1billion commitment to improve California’s affordable housing options last year. They committed $150 million of the $1 billion pledge for the development and construction of affordable housing, this will include housing for the homeless, something that is desperately needed. In 2017, the San Francisco Homeless Count Survey found the differences between the city’s population and those experiencing homelessness were vastly distinct, with African Americans making up 34% compared to just 6% of the general population.
This investment from Microsoft is better late than never, but only time will tell how effective it will be for residents. At least they won’t be alone in their effort to create more housing options, as Seattle announced it would invest $110 million into building nearly 2,000 affordable housing units in the city.
Source: Forbes
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