Microsoft is increasing its spending on affordable housing and homelessness philanthropy in the Seattle area by 50 percent.
The company announced it will spend an additional $250 million on the issue, on top of the $500 million fund launched one year ago.
Microsoft started a trend in the technology industry when it announced the affordable housing pledge. In the year that followed, several of Microsoft’s tech titan peers followed suit. Their increasingly large housing commitments have changed the dynamics of tech philanthropy. Once a pioneer, Microsoft is now in the middle of the pack when it comes to the overall financial commitment of each company.
But today Microsoft is upping the ante. The new $250 million will come in the form of a line of credit to the Washington State Housing Finance Commission. The capital will allow the commission to provide more tax-exempt bonds for affordable housing projects, Microsoft said.
Microsoft is still doling out its original $500 million budget in the form of grants and loans. The novel financial model of the program is designed to spur long-term housing production in the Seattle area, where Microsoft is based.
The company has spent $380 million to advance that goal, including the donations announced today. Microsoft says its initial $500 million fund will preserve and create more than 3,700 of affordable housing. The company estimates an additional 3,000 units will become available as a result of the $250 million line of credit.
“2020 will be the year of action for us,” said Jane Broom, Microsoft Philanthropies director, in an interview with GeekWire this week. Her team plans to “prime the pump and really bring more of these projects to fruition in a much quicker manner” this year.
Big tech companies have drawn criticism for the housing crisis confounding cities like Seattle and San Francisco for years. Over the past 12 months, many of those companies have responded with philanthropic initiatives designed to rein in runaway housing prices and growing homelessness populations.
In November, Apple eclipsed its peers by announcing a $2.5 billion pledge to help alleviate California’s housing crisis. The announcement followed similar ones from Facebook and Google, which have launched housing programs of their own, each valued at about $1 billion.
The housing initiatives put four of the five most valuable tech companies in the world in a new role. They have become affordable housing financiers and government partners on one of the biggest challenges these regions face.
“We welcome any entity, any person that wants to get involved in solving this affordable housing crisis, of course, here in our own state but around the country as well … we’re thrilled about it,” Broom said. “We’d love to see more of that come up here to the Washington state area, though.”
Amazon’s philanthropy on the housing issue diverges from other tech giants. The company’s financial commitment is smaller and the focus is more narrow: helping homeless families get back on their feet. Amazon is opening a shelter at its corporate headquarters for homeless families in partnership with Seattle non-profit Mary’s Place in early 2020.
The company has also donated space for restaurants operated by FareStart, a job-training nonprofit. Amazon estimates the collective value of its contributions to Mary’s Place and FareStart — including annual rent — to be more than $130 million. Amazon CEO Jeff Bezos launched a $2 billion philanthropic initiative in 2018, with half of the funds earmarked for nonprofits that help homeless families.
Despite those commitments, there is a perception by some Seattle residents that Amazon has not done enough to mitigate the city’s housing and homelessness crisis, which has been branded a state of emergency since 2015.
Microsoft’s housing initiative is primarily focused on the “missing middle,” that is, housing for low- and middle-income residents who are essential to a thriving community. The company hopes its funding will lead to more housing for teachers, police officers, firefighters, nurses, and other workers who have struggled to keep up with the Seattle area’s skyrocketing housing costs.
In addition to the $250 million bump, Microsoft announced several new housing projects Wednesday. The company will invest $50 million in the Evergreen Housing Impact Fund to build about 1,250 housing units on the east side of Lake Washington. Another $2.5 million will come in the form of a philanthropic grant to HomeSight’s Othello Square project.
Those funds will go toward a culturally-based community with about 192 units. Microsoft is also donating $2.5 million to Rise Together, a collaborative of six organizations building culturally-based housing in Seattle’s Central District, Capitol Hill, and White Center neighborhoods. That donation is expected to spur about 400 housing units.