Microsoft is part of the fabric in the Seattle region and across Washington state. While the company is currently embarking on a multi-billion-dollar regeneration of its Redmond campus, the company is also giving something back. Microsoft this week announced a $500 million fund to boost development of affordable housing solutions in communities around Seattle.
In a blog post penned by Microsoft president Brad Smith and CFO Amy Hood, the company says the focus will be on the Puget Sound regions. Why? Because that’s where Microsoft’s first 30 employees lived in 1979.
Aside from nostalgia, Puget Sound is among the communities around Seattle facing an affordable housing crisis. Microsoft says not enough homes have been built. Since 2011, jobs have increased 21 percent while new house builds have grown 13 percent.
“This gap in available housing has caused housing prices to surge 96 percent in the past eight years, making the Greater Seattle area the sixth most expensive region in the United States,” the post says.
“Median income in the region hasn’t kept pace with rising housing costs, increasingly making it impossible for lower- and middle-income workers to afford to live close to where they work … and people who are homeless face problems that are even more daunting.”
Spreading the Fund
Microsoft wants to spearhead efforts to change the housing gap by spreading its $500 million fund across three main areas:
- “$225 million at lower than market rate returns to inject capital to subsidize the preservation and construction of middle-income housing. These investments initially will be made in six cities east of Seattle and Lake Washington: Bellevue, Kirkland, Redmond, Issaquah, Renton and Sammamish.
- $250 million at market rate returns to support low-income housing across the entire King County region. We believe that additional capital at market lending rates can help accelerate the construction of low-income housing across the region.
- $25 million in philanthropic grants to address homelessness in the greater Seattle region. We are announcing today the first $10 million of these grants. This will include a $5 million philanthropic grant to the newly announced Home Base program created by the Seattle Mariners, the United Way of King County and the King County Bar Association. This program helps keep people facing eviction in their homes through legal aid, access to flexible funds and case management. We are also committing $5 million to support a new joint agency on homelessness being formed by the city of Seattle and King County.”
$10 million in grants has already been announced. Microsoft has pledged $5 million to the Home Base program. This initiative was created by the Seattle Mariners, King County Bar Association, and the United Way of King County to help people facing eviction to pay legal costs.
Another $5 million has been promised to a new collaborative agency formed by the City of Seattle and King County to combat homelessness.
“Our goal is to move as quickly as possible with targeted investments that will have an outsized impact,” Smith and Hood wrote.
“With these and similar investments, it’s possible to lend money, accelerate progress, be repaid and then lend this money again. While this is just one of the many ways that we’ll seek to put money to good use, it illustrates our financial commitment can have a multiplier effect.”