- Microsoft to decides to fund US$500M for housing
- Bay-area is flooded with the workers of the nearest companies
- Residents are blaming companies for the situation
- most of the workers are poor and homless people
- silicon valley united to provide homing for these homeless people
Microsoft’s promise to pony up US$500M (RM2.05B) for Seattle-area housing has Silicon Valley buzzing, full of hope that tech titans here will pour similar sums into the housing shortage in their own back yards.
The Redmond-based software giant will dole that money out as loans for low and middle-income housing, and as grants to fight homelessness, the company’s answer to its hometown’s rising prices and jobs-housing imbalance.
Bayarea needs a serious funding
It’s a drool-worthy amount to Bay Area housing advocates, who for years have been urging local cash-flush tech companies to set aside more funds to build and preserve affordable and work-force housing.
“I’m hoping this exciting news is one more prompt for employers, individuals and foundations of all types to step forward,” said Carl Guardino, president and CEO of business-backed public policy and advocacy organization the Silicon Valley Leadership Group.
Kaiser Permanente is the first to fund
Healthcare giant Kaiser Permanente on Tuesday said it will spend US$5.2M (RM21.41M) to buy an affordable apartment building in Oakland – part of the company’s ongoing US$200M (RM823.58M) effort to tackle homelessness.
In November, Cisco, LinkedIn and Pure Storage collectively pledged US$20mil (RM82.35M) to build affordable homes in the Bay Area. Cisco had previously contributed US$50M (RM205.89M) to fight homelessness. Facebook has raised nearly US$20M (RM82.35M) for affordable housing through its Catalyst Fund. And both Facebook and Google’s plans to expand their Silicon Valley campuses include housing.
This month, political pressure has been ramping up for companies to do more. Gov. Gavin Newsom last week called on Silicon Valley corporations to “step up” and contribute to fighting the housing shortage, and said he’s already in talks to make that happen. San Jose Mayor Sam Liccardo on Tuesday expressed a similar sentiment, and hinted at similar plans in the works.
“It’s great to see enlightened tech companies like Cisco … and now Microsoft step up to show that we’re all grappling with this housing affordability crisis together,” Liccardo wrote in an emailed statement.
Microsoft is putting big numbers
Microsoft pledged US$225M (RM926.52M) in loans Wednesday evening for middle-income housing, US$250M (RM1.02B) in loans for low-income housing and US$25M (RM102.94M) in grants for homelessness solutions.
And it seems Microsoft doesn’t intend the money to stop there, said Julie Mahowald, acting CEO of Housing Trust Silicon Valley. Microsoft based part of its fund on the Housing Trust’s tech-backed affordable housing fund, and reached out to the organisation months before Wednesday’s announcement.
“I think they’d like to spur additional investment,” Mahowald said.
Money from private companies can play a crucial role in getting affordable housing off the ground, said Alex Sanchez, executive vice president of ROEM Development Corporation, which builds affordable and market rate projects throughout the Bay Area and California.
“There is a massive need,” he said, “and they have to be a piece of the puzzle.”
Google also joins hands
Google invested US$6.5M (RM26.76M) in equity into ROEM’s Franklin Street Family Apartments, a 51-unit affordable apartment complex that opened in Mountain View in 2013. The building, which cost a total of US$23.4M (RM96.35M) to build, is reserved for residents making 50% or less of Santa Clara County’s area median income – US$66,500 (RM273,840) for a family of four. Google also donated US$81,859 (RM337,087) for computer equipment and free internet access for the building’s residents.
Now ROEM is in talks with other companies about funding additional projects, Sanchez said.
It costs about US$500,000 (RM2.05M) to build one unit of affordable housing in the South Bay, Sanchez said, meaning Microsoft’s money could fund only about 1,000 local homes. But when leveraged with tax credits and money from state and local governments, those funds perhaps could build three times that number, he said.
Microsoft’s announcement is Exciting
But there are very few employers with the finances to shell out US$500M (RM2.05B) for any project, including housing, Guardino said. And even if dozens of companies put up funds of that size, nothing can be built unless it’s approved by local officials. As part of Microsoft’s US$500M (RM2.05B) announcement, nine Seattle-area mayors have pledged to consider changing their cities’ policies to better accommodate housing development.
Doug Shoemaker, president of affordable housing developer Mercy Housing California, called Microsoft’s announcement “exciting”. He’s already seeing Silicon Valley companies express interest in tackling the region’s affordable housing crisis, but he hopes Wednesday’s news will accelerate that pace – and perhaps make investment in housing a standard part of doing business.
“It’s high time,” he said, “that we asked our corporate citizens to think of themselves as citizens, and not just corporations.” – The San Jose Mercury News/Tribune News Service