Microsoft pledged $500 million to develop affordable housing and address homelessness. This pledge, its largest ever, comes in response to Seattle’s widening affordability gap.
A large portion of the money will be spent on increasing housing options in the Puget Sound region for low- and middle-income workers. Those workers are being priced out of Seattle, and many of its suburbs as much of the new buildings target wealthier renters.
At this time, it is unclear what impact on affordable housing this fund will have on the region. According to Microsoft President Brad Smith, the company hopes that the $500 million will help to create “tens of thousands of units.”
Microsoft’s pledge comes less than a year after Seattle City Council failed to pass a “head tax” that would have meant companies making more than $200 million a year had to pay $275 per employee in taxes. That money would have been spent on resolving housing issues and homelessness.
“At some level we as a region are going to need to either say there are certain areas where we’re comfortable having more people live, or we just want to permanently force the people who are going to teach our kids in schools, and put out the fires in our houses, and keep us alive in the hospital, to spend four hours every day getting to and from work,” Smith told the Seattle Times. “That is not, in our view, the best outcome for the community.”
The money will be split three ways. $225 million will be loaned at below-market rates to developers who build for households making less than $124,000 a year. $250 million will be loaned at market-rates to help support new construction for people earning roughly $50,000 a year. Last, $25 million will be donated to services that assist low-income and homeless peoples. Loans will be made out over three years.