Tech giant seeks to create tens of thousands of units for low- and middle-income workers
For years, tech companies have been under fire for causing housing prices to soar in certain areas. Now, Microsoft Corp. is doing something about it.
The Redmond, Wash.,-based tech giant has pledged $500 million to create affordable housing and address homelessness in the Seattle area, the Seattle Times first reported Wednesday night. It’s the largest financial pledge in Microsoft’s history, the Times said, and among the biggest housing contributions ever by a private company.
Microsoft MSFT, +0.35% told the Times that most of the money will go toward low- and middle-income workers who are being priced out of the area by skyrocketing housing costs.
“The reality is that a lot of people work for Microsoft. Cafeteria workers, shuttle drivers,” Chief Executive Satya Nadella said at a meeting earlier this week, according to the New York Times. “We have a real challenge. We don’t have enough affordable housing units.”
The Seattle Times said Microsoft is hoping to create “tens of thousands of units” of affordable housing.
In December, a report by King County — which includes Seattle and its eastern suburbs, including Redmond — found the county needs 244,000 additional, affordable homes by 2040 to keep up with the booming region’s growth.
Of the $500 million, the Times said $250 million will go to market-rate loans to build affordable housing around the Puget Sound area; $225 million will be for below-market-rate loans to developers to build housing in Seattle’s eastern suburbs; and $25 million will go to combatting homelessness.
While King County housing prices have fallen recently, it’s not even close to making up for how much they soared in recent years. From early 2012 to spring 2018, the median price of a single-family home there skyrocketed 136%, to $726,000, the Seattle Times reported last month. The median price has since slipped 11% to $644,000.
Microsoft is the second-most valuable company in the U.S. by market cap, worth about $809 billion as of the close Wednesday, trailing only Seattle-based Amazon.com Inc. AMZN, +0.55% . Microsoft shares are up 19% over the past 12 months, compared to the S&P 500’s SPX, +0.22% 5.8% decline over that time.