UPDATED, Sept. 29, 2019: Microsoft announced it will provide a 15-year, $60 million loan to the King County Housing Authority (KCHA) to assist in the acquisition and protection of five residential apartment complexes in King County. This is the company's first significant investment from its $500 million affordable housing initiative, announced in January.
The loan is part of a greater partnership announcement that outlined $245 million of investment to protect 1,029 affordable rental units across King County. The county provided KCHA with $20 million in low-interest debt and additional credit enhancements, while KCHA issued $140 million in bonds.
The announcement from Microsoft says rent prices for units in King County have increased 43% over the last decade. Microsoft hopes its multi-million dollar commitment will make housing affordable "for generations to come."
Dive Brief:
- Microsoft announced it will commit $500 million to addressing the affordable housing crisis in the greater Seattle area. This includes the cities of Auburn, Bellevue, Federal Way, Issaquah, Kent, Kirkland, Redmond, Renton and Sammamish.
- The announcement coincides with an announcement from the mayors of those nine cities to consider zoning changes that would accompany new housing efforts.
- While the lion's share of Microsoft's funding will go toward preserving and creating housing for low- to mid-income residents, $25 million in philanthropic grants will address homelessness. Most of the capital will be deployed over the next three years.
Dive Insight:
Seattle-based tech giants often take a lot of the blame for bringing thousands of high-paid tech jobs to the Seattle region and driving up the cost of living. And a number of these companies taking heat for causing the affordable housing crisis also face criticism for not doing enough to help solve the problem. Microsoft's $500 million commitment is aiming to tackle that problem head-on.
"If we’re going to make progress, we’ll all need to work together as a community,” said Microsoft President Brad Smith and Microsoft Chief Financial Officer Amy Hood in a joint statement. “Ultimately, a healthy business needs to be part of a healthy community. And a healthy community must have housing within the economic reach of every part of the community."
The company stated that the rise in housing costs pushes out low- and middle-income people and the problem is even more pronounced in the smaller cities that surround Seattle. Metropolitan King County Councilmember Jeanne Kohl-Welles addressed that phenomenon in a press release about the Microsoft housing funds, saying, "Unfortunately, because of our skyrocketing housing costs, such workers as well as many middle-income professionals, are having to move further and further from where they work to find affordable housing."
The widespread nature of the housing problem prompted leaders in Seattle and other King County municipalities to vow last month to create a single, independent entity to provide a unified response. "We have an opportunity to turn our fractured approach to preventing and addressing homelessness into a much more unified and impactful one," Seattle Mayor Jenny Durkan said in a statement.
