Microsoft recently announced a $500 million affordable housing initiative for the Seattle area, yet another example of a private, non-housing entity getting involved in the industry to address issues of affordability and homelessness.
“Ultimately, a healthy business needs to be part of a healthy community. A healthy community must have housing within the economic reach of every part of the community,” wrote Microsoft president Brad Smith and CFO Amy Hood in a blog post.
Microsoft’s funding will be separated into three “pillars.” The first two come in the form of subsidies: $225 million in below-market-rate loans to subsidize the construction and continuity of middle-income housing in six local counties; and $250 million in similar loans to support low-income housing in King County. The loans are available to local suburban mayors pledging zoning changes, the creation of new tax incentives for construction, for providing public land near transit stops, and more. The third pillar translates to $25 million in philanthropic grants to address Seattle’s homelessness crisis.
It’s the latest in a recent string of similar initiatives. Healthcare consortium Kaiser Permanente is investing up to $200 million for affordable housing efforts, and the Partnership for the Bay’s Future looks to raise and funnel $500 million in private funds to create and maintain 175,000 affordable units.
While these organizations hope to help create greater equity in local access to shelter and affordable homes, the shift to such models will likely challenge developers and builders, as well as the public review and approvals process, in affected markets.