Microsoft announced this week it will donate $500 million to develop affordable housing in the Seattle area.
Microsoft’s Largest Donation Ever
As the high price of tech income drives up housing costs around company headquarters, Microsoft has decided to address the issue head-on. In what will be the largest donation in the company’s 44-year history, Microsoft announced this week it has pledged $500 million to develop affordable housing in the Seattle area.
Affordable Housing for Employees
In a statement announcing the initiative to the Seattle Times, Microsoft president Brad Smith said most of the money will be aimed at increasing housing options for low- and middle-income workers. As Mr. Smith described them, these employees, “teach our kids in schools, and put out the fires in our houses and keep us alive in the hospital.”
Funds to be Used in Three Ways
Microsoft, which holds $135 billion in cash reserves and short-term investments, says the funds will be used in one of three ways:
First, Microsoft will loan $225 million at below-market interest rates to developers in order to construct housing for middle-income employees on the city’s Eastside. This development is targeted at households making between $62,000 and $124,000 annually. Currently, Microsoft has over 50,000 workers in the Eastside area and is planning to hire thousands more.
Second, $250 million will be loaned at market-rate to develop affordable housing for people making up to 60% of the local median income of $48,150 for a two-person household. This $250 million will be the second-half investment of a $475 million capital investment Microsoft is making in the Puget sound area over the next two years.
Third, the remaining $25 million will be donated to local low-income and homelessness initiatives. From this amount, $5 million will be used to staff a King County Bar Association legal clinic for tenants facing eviction, and another $5 million will be used to help consolidate the city’s homelessness resources.
An Initiative in Response to the Company’s Regional Expansion
The new housing initiative comes in the wake of an announced multi-billion dollar expansion of Microsoft’s Redmond headquarters. The planned expansion will see the company add 2.5 million square-feet of new construction, and another 6.7 million square-feet of renovated construction. When the project is complete, the company will have room to hire as many as 8,000 additional employees.
A Move that Makes Sense
Regarding the new housing initiative, Microsoft president Brad Smith remarked, “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. That is not, in our view, the best outcome for the community.”
Plans have already begun to move forward on the new initiative.