Microsoft Pledges $500 Million for Affordable Housing in Seattle Area

Posted on January 17, 2019 by Paul Thurrott in Uncategorized with 26 Comments

Implicitly acknowledging the devastating effect that its growth has had on the Seattle area, Microsoft today announced that it will do something to help: It is pledging $500 million in aid aimed at helping to increase affordable housing in the area.

“If we’re going to make progress, we’ll all need to work together as a community,” a blog post attributed to both Microsoft President Brad Smith and Microsoft Chief Financial Officer Amy Hood reads. “Ultimately, a healthy business needs to be part of a healthy community. And a healthy community must have housing within the economic reach of every part of the community, including the many dedicated people who provide the vital services on which we all rely.”

The $500 million will be split between loans and grants “to accelerate the construction of more affordable housing across the region,” Microsoft explains. Almost half of that sum will go towards preserving existing affordable housing—which is no doubt now surrounded by McMansions—in Bellevue, Kirkland, Redmond, Issaquah, Renton and Sammamish. (Microsoft’s corporate headquarters are in Redmond.) Half will go towards new affordable housing across all of the King County region. And $25 million is headed to philanthropic grants to address homelessness in the greater Seattle region.

Microsoft is also working with local government to help solve the problem, a partnership it says is crucial for success. The mayors of Bellevue, Kirkland, Redmond, Issaquah, Renton, Sammamish, Auburn, Kent and Federal Way have all agreed to take steps related to zoning, permits, and tax incentives to aid in this effort. And Microsoft is now petitioning the Washington state government to double its investment supporting very-low-income individuals and families.

Microsoft currently employs about 135,000 individuals, about 50,000 of which are crammed in and around Redmond. Its expansion, not just in recent years, has led to overcrowding, traffic, and a dramatic spike in home prices in the area.

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Comments (26)

26 responses to “Microsoft Pledges $500 Million for Affordable Housing in Seattle Area”

  1. Avatar

    ajgisler

    Again private businesses solving the problem of what government created. If Seatle would just step aside and stop giving power to the NIMBY's then there would have never been a problem in the first place.

  2. Avatar

    yaddamaster

    pointless posturing that solves nothing. There is a shortage of housing and the master plan for King County (greater Seattle area) ensures a shortage of housing. We're tearing down small houses and commercial centers all over the eastside and packing in 600+ unit mixed use developments everywhere - and it's still not enough. $500 million going to non-profits (no matter how well intentioned) will do exactly nothing.


    Best thing these companies could do is open up offices in Moses Lake, Spokane, Couer d'Alene, Bellingham, etc - places that actually want to grow and can accomodate growth. Unless you want King County to turn into the Bay Area 2.0......

    • Avatar

      Greg Green

      In reply to yaddamaster:

      Sounds like this won’t help those with middle incomes. They’ll continue to get squeezed as land goes to the wealthy and taxes go to the poor.

    • Avatar

      MikeGalos

      In reply to yaddamaster:

      If you don't put jobs where people want to live, you don't get the people who can do the jobs. These aren't unskilled jobs where you can train anyone willing to live there on the job.


      You'll note the thousands of "technology zone" projects done by governments all across the land where local, county and state governments created zones of lowered taxes and perks for high-tech corporations to set up shop. You'll find one in pretty much every dying small city and town. They don't work because the people needed to do the R&D jobs they're trying to attract don't want to live in the boonies away from education and shopping and cultural events nor to live in a "company town" where the cost of changing jobs is relocation to a different city.


      That's why Google and Apple have branch campuses not far from Microsoft and why companies still locate around the cities attractive to workers in their industry even if moving to Moses Lake would be cheaper for them.

      • Avatar

        yaddamaster

        In reply to MikeGalos: I have a number of friends who eagerly volunteered to move to Quincy when MS opened their massive datacenter there. If MS opened a dev center in Spokane, I'd volunteer in a heartbeat. Or any of the options mentioned. And I suspect that if you offered that option to anyone currently making the horrible commute from Everett or Lake Stevens to Redmond they would as well.


  3. Avatar

    chrisrut

    Good. Glad to hear it.


    Just a few years back corporations were granted the rights of persons - it is thus appropriate that those "persons" act as good neighbors, and take care not only of their own corpus - the investors - but the neighborhood(s) where they live.

  4. Avatar

    hrlngrv

    Use Google Earth's satellite view. Lots of undeveloped land in the Greater Seattle area. If the surest way to reduce housing costs is MORE SUPPLY, how many EXISTING Seattle area residents would FIGHT any new housing developments in order to maintain the current ambiance? I'm sure the people of Redmond and immediately surrounding towns would trade some development for less traffic, but I doubt people 15 miles away who don't work for MSFT would.

    Given such probable opposition, the surest way to reduce housing costs in Seattle would be for Seattle-based companies to open locations in, say, Youngstown, OH or Erie, PA. That is, use all the wonderful technology which makes it less necessary for every employee to be concentrated in a single region.

    Also wouldn't hurt for MSFT, other Seattle-based employers, local and state government to [re]read Economics for Dummies and this time perhaps realize that when some goods get too expensive, it's time to consider substitutes. For housing, that means putting jobs in other places where housing costs are considerably lower. Alternatively, keep doing what they're doing and subsidize it to make the problems even worse. In time, nasty, brutish, short and murderously expensive may reinforce the lesson that the only cure for high housing costs is geographic dispersal.

    This isn't technology. It's basic economics. It's possible to resist economics, but it takes a commitment like Netherlands resisting allowing the Atlantic Ocean to occupy its sub-sea level areas, and it'd cost a lot more than US$500 million once-off.

  5. Avatar

    Dan1986ist

    Makes since, if Microsoft wants to people to work there, people need to have affordable housing.

  6. Avatar

    eeisner

    This is incredible, and so badly needed. Unfortunately and very sadly, the homeless problem in Seattle is getting absolutely out of control (as I'm sure you've seen at Build), and the explosion of housing/rent, along with the lack of affordable housing are both definitely large contributors to the problem. Huge props to MSFT for doing this - I know Amazon built a homeless shelter on their campus, but would be great to see them, as well as Boeing, Starbucks, T-Mobile, and all of the other large corporations in Seattle step in where our city council has failed.

  7. Avatar

    Daekar

    So... their solution is private and government subsidizing housing rather than decreasing demand by dispersing their workforce into satellite campuses or pushing government to invest in public transit?


    The road to hell is paved with good intentions.

  8. Avatar

    ecumenical

    "Implicitly acknowledging the devastating effect that its growth has had on the Seattle area,"


    Oh, come on Paul. You're better than this. I'm sure Cleveland, Detroit, Milwaukee, St. Louis etc. wish they could be similarly "devastated." Are there challenges from growth? Yes. Is it worse than the alternative? Not by a long shot.

  9. Avatar

    lvthunder

    It sounds like the government city planners have done a poor job managing the area.

    • Avatar

      hrlngrv

      In reply to lvthunder:

      To whom do governments answer?

      Do the people already living AND VOTING in the Greater Seattle area want more housing and less greenery? I suspect not. Do ANY current homeowners and landlords, presumably voters in the area, want LOWER housing [edit] prices?

      This is a classic economics and politics problem, and no amount of subsidizing housing expenses will offset the apparent need for new housing construction. Sadly, there's no practical way to align the interests of current property owners and newcomers.

      The 2nd best MSFT could do would be to build its own housing estates and mass transportation between such housing and its work locations. Employees wouldn't be forced to live in MSFT housing, but they'd have the option. With luck that'd take enough strain off 3rd party housing stock that K-12 teachers, police, firefighters, supermarket staff, etc could afford to live within 30 miles of the MSFT campus.

      The best MSFT could do would be geographical dispersion.

    • Avatar

      ecumenical

      In reply to lvthunder:


      Not really - they're just stuck with low-density suburban development patterns around Redmond and the other east side suburbs from the 1950s. This makes it a mathematical impossibility to add lots of people without generating huge amounts of traffic and forcing people to buy houses ever-farther out, because there's no redundant street grid and only a tiny supply of houses in convenient range of the main campus.


      The local governments are retroactively addressing this with the construction of a large new light rail system and increased density around major transit nodes (and note that MS is also rebuilding its campus to be oriented toward the new light rail station), but the effects will take years or decades to fully take hold. The town of Redmond itself has also added a ton of new housing in and around its downtown (again, near a new station). Rents in the region are now levelling off or even dropping thanks to such measures, but for-sale housing remains critically undersupplied.

  10. Avatar

    MikeGalos

    While Microsoft has contributed to the housing and traffic problems in metro Seattle, their campuses are spread out across multiple suburban cities on the Eastside (the area across Lake Washington from Seattle) and grew in areas that had been relatively undeveloped 40 years ago when Microsoft's growth started. That's allowed for designing traffic solutions to meet the increased traffic and expansion of those Eastside towns into what had been rural areas.


    The bigger problem has been the comparatively sudden growth of Amazon which has most of their campus in a series of buildings in the South Lake Union neighborhood of Seattle itself. Since that's an urban area on a isthmus the growth has been up and not out and that's driven downtown housing and downtown traffic way, way up.


  11. Avatar

    bharris

    I really don't have a problem with it in real world, practical terms but I would rather see philanthropy done by individuals and not corporations since they are really giving away someone else's money, the shareholders', without letting them have a say in it. I realize 500 mil is nothing so I'm talking more principle than having any effect on shareholders' value...

  12. Avatar

    karlinhigh

    Microsoft currently employs about 135,000 individuals, about 50,000 of which are crammed in and around Redmond. Its expansion, not just in recent years, has led to overcrowding, traffic, and a dramatic spike in home prices in the area.


    Boeing is not far away, either. That whole region seems jam-packed with commuting employees.

  13. Avatar

    justme

    Hmmmm...while investment in affordable housing is a good thing, what about the infrastructure of the area? With the bonkers traffic the entire Seattle region has, more investment in transit would also help. If you want cars off the road, you have to give folks an affordable and usable alternative.

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