Why Microsoft is earmarking $500M to help solve homelessness, affordable housing
Microsoft announced Thursday that it will dedicate $500 million toward building affordable housing and fighting homelessness in the Seattle region. It comes after years of debate and proposed solutions among the community.
But threats of a head tax in Seattle was not an inspiring factor for the company.
“Microsoft isn’t based in Seattle,” Microsoft President Brad Smith told Seattle’s Morning News. “The head tax really wasn’t an issue that was ever going to impact us. I think the debate did encourage everybody to think more. But independent of the head tax debate, we’ve just sort of reached, in 2018, a point where the boiling water finally caused the frog to jump. We recognized that this is a real problem. I think it’s fair to use the word ‘crisis’ to describe the lack of affordable housing around Puget Sound.”
The head tax was also called an “Amazon tax” by some city council members, who argued the wealthy companies like Microsoft should be paying for affordable housing. The Seattle head tax was designed to take money from the city’s largest companies to accomplish this. But was repealed one month after it was passed. It proposed to raise for $86 million annually for affordable housing.
Microsoft is offering much more than that. Smith said the company is going to ensure the $500 million moves swiftly toward the problem. The company spent eight months studying the issues and what it could do to contribute to a solution, looking at best practices across the globe. Thursday’s announcement is the result.
- $475 million will flow into lending; through established and new investment vehicles. It will go to low- and middle-income housing.
- $25 million will go to philanthropic grants to address the homelessness crisis.
The money will go toward a range of housing types designed for low- and middle-income brackets. Smith believes the money will help produce tens of thousands of new units, but says that this should be a catalyst for the rest of the region. He stresses that the affordable housing problems facing the Seattle region are going to take even more money than Microsoft is dedicating.
“The first thing we need to do … is help everybody understand the gravity and sheer magnitude of the problem,” Smith said. “Second, we are going to need more capital. We are in a really fortunate position as a company. We have the capital. We are incredibly grateful for the support we have always had from this community. We want to make our success support the community as a whole.”
“Most importantly, in many ways, it’s going to take a lot more than what we are doing today,” he said.
Another important step coming along with the half-billion dollar announcement, Smith notes, is a statement from nine mayors across the region – smaller cities around Seattle. Smith expects city councils around the region to adopt new policies to spur new housing.
“It’s going to take changes in zoning and land use and parking restrictions, and a lot of blocking and tackling to unleash construction funds to get affordable housing built,” Smith said.
“We need to have communities where the teachers who teach our kids, where police officers and first responders who keep us safe, can actually live with the rest of us,” he said. “We need to have a community where people who work in businesses, including Microsoft, the people who drive our shuttles, work in our cafeterias, lower paying jobs, can afford to live as well.”
“The most important thing is to build more housing, it’s pretty straight forward,” he added.