They really should use the money to instead build more remote offices, where housing is already affordable, develop the technologies/processes to support that distributed culture, invest in making those other cities more livable, and thereby bring economic opportunity to a more diverse set of cities/cultures.
I am personally not in favor of more density here because my lifestyle, and those of many I know, is better suited to the lower density we have on the east side. The balance we have now is one of the main reasons many of us choose to live here, in the PNW. It feels to me like this growth will be good for new transplants at the cost of those who have made a life here already.
Here's how the money is being used (somewhat vague).
"Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region...the remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction."
Here's the projected impact (also somewhat vague).
"The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”
Here's the need: "Seattle region needs 156,000 more affordable housing units [today].and will need 88,000 more by 2040 if the region’s growth continues."
I'd much rather see Microsoft (and Bill, Steve, the estate of Paul Allen, etc.) pay more in taxes to the state of Washington and have that affordable housing built that way, but this is better than nothing. Good on MS.
Is it a good or a bad thing when multinational corporations step in and take the place of government?
At least in SF, I don’t think financing is the issue. The city blocks projects that developers are begging to develop for years and create additional loopholes that allow NIMBYs to stall projects. At some point projects are stalled for so long that the cost to build increases so much where the project is not a good investment anymore and the project is abandoned.
Can pouring money to buy housing possibly lower prices on housing? I want to understand, because it seems to me that supply and demand works some other way.
Perhaps increasing supply by developing tech or fighting regulations will be better way to spend money
from the Seattle Times version of the article: $475M for loans to housing developers over three years and $25M for resident services
As great as it is to see this kind of corporate responsibility and acknowledgement of the downsides of local growth, it's not clear to me how Microsoft is supposed to help here. High housing costs are a nasty example of a particular social problem where throwing money at it just doesn't work, even if you're willing to completely take a loss on your investment. To my naïve analysis, if Microsoft just pledges money to build a bunch of housing units, then that throws a wrench in supply/demand, other people pull back on construction to match, and we end up right back where we started. I'm sure there are higher-order effects and the reality is more complicated than this, but I also don't think it changes the fundamental picture much. How is Microsoft supposed to help make more housing available without other developers just canning their own projects and leaving zero net change?
Are they going to be the landlord, or even arms-length invested in the landlord? Or, are they agreeing to fund metro and county housing initiatives which have public boards?
I'm not in favour of the former, I prefer the latter, but I could believe its a conversation about "how" and "what works"
It'll be interesting to see how this turns out.
Housing is so short and expensive anywhere near Microsoft HQ that it's a significant factor in hiring. I'm a bit surprised that such corporations don't build dormitories near their campuses suitable for interns and singles.
I won't claim to know what incentivizes developers to build, but below market interest rates for construction seems like a tiny factor in whether a private developer would choose to build affordable housing vs market rate housing. Does anyone know if this difference in interest rate would actually make it more worthwhile for a developer to build low cost housing vs market rate?
How does this work?
Buy/build houses and sell to eligible buyers for less than market? Rent at less than market? How does eligibility work?
Is arbitrage a problem?
Question: what is MSFT's downside? I guess very little, or close to zero. Unless someone commits downright fraud (i.e., take the money and don't build anything--but no one will let them do this.)
They 'funding /financing buildings, maybe at lower rates than banks, but then MSFT has so much that a lot of it must be making close to 0%. So they solve a problem of theirs since MSFT is there for the long term, get excellent press with virtually no risk. If they default, MSFT might end up as building owners. Hire someone to manage and sell them when time is right. Maybe lose some on taxes and management fees but that is nothing, relatively speaking.
Zoning is one of the big culprits for affordable housing. I'm curious if it would be productive for companies to target zoning laws or if it would create a counter productive backlash.
Just build dorm style apartments for most of your employees and be done with it. Studio apts.
Pay more corporate taxes instead and let elected people decide how to spend it for public services?
Seems to me like a job for the government. And half a billion is a drop in the ocean.
Door key rehash&software updates: 1 hour lock-in midday next Tuesday
Meanwhile crickets in the bay
more of this!
This is great and all, but part of me is really cynical about corporate philanthropy like this.
First off, all but $25 of the $500M will be loaned out to developers at below-market interest rates and the other $25 will be donated to related services. Good on Microsoft for committing capital that could be put to other uses, but this isn't a donation; it's philanthropic lending. Depending on the interest rates of these loans, they'll wind up keeping much of that principle. Yes, people will surely benefit from this, but this looks really conservative for such a headline.
Corporate taxation is a hot-button issue these days, but one can't help but notice how easy it is to shun government for being wasteful in providing housing services while private industry is being applauded to essentially buy the process of welfare. And while there are heated debates about what major companies should contribute (or avoid contributing) in taxes, can we even agree that affordable housing sponsored by private money is a little contradictory here?
What no one seems to want to consider is
Buy a block of LAND
Divide it into FOUR
Put 3 tiny homes on 3 sections
Each Tiny Home has -
- Roof tank water (kitchen)
- Gas Stove
- Solar System - DC Fridge + DC Lights + DC 24" TV (TV Vesa mounted to wall)
- Small front porch
- Small Shed
- Small Car park (2 door sedan/motobike/scooter)
On the 4th segment you have
* SHOWER/Bathroom BLOCK connected to GRID WATER+Grid Sewage
* LAND LINE Internet that is shared via wifi
* 4 big car park Drive way to each place
So instead of renting a block of land with 1 story and 3 bedrooms for AUD$355 per week
you can rent out THREE 1 bedroom tiny homes for AUD$200 EACH
Everyone has piracy and their own space
Everyone has internet and its lower shared cost
Person that owns the block of land now gets AUD$600 PER WEEK instead of AUD$355 for the same amount of PEOPLE
Where is Bezos hiding with his money ? Even after his divorce 500 mil would still be less that 1% of his net worth . . .
Does it mean they are buying 25 houses in Seattle area for the company ownership ?? Are they going into property development now ??
This line made me snicker:
"And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable."
So, 85% of the housing created is too expensive to be purchased? Sounds like a pretty poor business model. ;)
Frankly, good. If the Eastside cities can't or won't step up with building more affordable housing and public services, then I'm glad Microsoft is willing to kick in its money. It's a shame that the counties and cities in the region, by and large, aren't willing to acknowledge that this is a regional problem but Microsoft putting up the money at least removes the "but we can't afford the taxes or find the money elsewhere" excuse.
This isn't the first time Microsoft has put its money where its mouth is for its community. They've done a lot for transit in the region, too.
I don't mind so much that they are studiously avoiding the region's most populated city. Not all of the affordable housing and public services needs to be concentrated solely in Seattle. The rest of the region should have these things, from mental health services to public health facilities to shelters to affordable housing. Concentrating them in Pioneer Square around the Union Gospel Ministry isn't the way to go.