Microsoft announced Wednesday it would loan up to $500 million to address homelessness and help build affordable housing in the Seattle area, which has been plagued by skyrocketing real estate prices as tech companies have taken over the Emerald City.
The software giant, which isn’t based in Seattle but nearby Redmond, said it would work to open up housing options for low- and middle-income workers almost immediately, with plans to invest the money within the next three years. It’s the largest pledge in the company’s history and comes on the heels of gangbuster profits for Microsoft under the leadership of CEO Satya Nadella.
“We believe everybody has a role to play, and everybody needs to play their role,” Brad Smith, Microsoft’s president and chief legal officer, told The New York Times.
Smith told The Seattle Times the effort will benefit working families who “teach our kids in schools, and put out the fires in our houses and keep us alive in the hospital.” Officials told the newspaper that it was too early to say how many affordable units could be built with the funding, but Smith noted he hoped it would help create tens of thousands of new homes.
“It is very difficult for folks earning what would be an average salary to buy what should be an average house, or rent,” Dow Constantine, the King County executive, said in a video announcing the initiative. “And that gap creates lots of costs for them individually and for all of us as a community.”
As part of the effort, Microsoft will split up how it loans out the money. Some $225 million will be loaned at below-market interest rates to developers to spur construction of affordable housing, $250 million will go toward market-rate loans to low-income families around the region and $25 million more will be doled out as grants to housing affordability efforts.
The loans will go toward project all over the greater Seattle region, and Microsoft has said it hopes the investment will prompt other major companies to follow suit.
The move comes after Amazon, the Seattle region’s other major tenant, moved to block a citywide tax meant to combat homelessness and housing affordability issues. Seattle passed the tax before officials repealed it last June amid warnings from Amazon that the measure would affect its bottom line. It would have required large companies to pay a per-employee tax to fund homeless services and housing construction by generating up to $50 million in revenue annually.
Seattle has the third-largest homeless population in America, behind New York City and Los Angeles, according to the Department of Housing and Urban Development. At the same time, home prices in the area have skyrocketed, nearly doubling in the past eight years, according to the Times.
While Microsoft’s efforts could be a boon for the area, the company estimates all of King County needs about 305,000 affordable housing units to keep up with demand and the area’s expansion.