Microsoft Puts $500 Million Towards Affordable Seattle Area Housing

AlphaAtlas

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Microsoft says they're committing $500 million towards an affordable housing program in the Pudget Sound region around Seattle. More specifically, $225 million will be invested "at below market rate returns, focused on preserving and developing new middle-income housing on King County’s Eastside," $250 million will be invested "at market rate returns," while $25 million will be donated as a philanthropic grant to address homelessness. Microsoft points out that the Seattle region has seen a 21% increase in jobs and a 13% increase in housing since 2011, and feels at least partially responsible for the growing housing problem. The Seattle Times notes that the announcement comes days after Microsoft revealed plans to modernize their Redmond campus, and that the company is sitting on $135 billion in cash reserves and short-term investments, to put things in perspective.

Microsoft made a video for the project, which you can check out here.

For Microsoft, the fund is also a call to action. The company wants philanthropies and businesses to step up with aid, Smith said. Smith said he’s open to others contributing to Microsoft’s fund and has had talks with executives at other companies. But few have the same amount of cash on hand, he said. He noted Boeing has much of its money tied up in aircraft construction. Smith said he’s talked with leaders from Amazon, but declined to disclose details. Convincing the private sector to jump on board might be hard. In Silicon Valley, companies such as Cisco and Microsoft’s LinkedIn have donated $52 million toward a similar housing-loan program, but companies like Google and Facebook have instead chosen to build or advocate for housing near their Silicon Valley headquarters.
 
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Verge

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225 below market rate, 250 at market rate. The headline kinda makes it sound like they are donating money lol.
 

Danny Dawg

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And just like that all of the government permitting and other BS that stands in the way of development over there disappears overnight . . . maybe the $25 million in grant money is the grease payment.
 

steakman1971

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Coal mines used to provide housing and stores (at cost!) to their employees. Maybe this will be a new trend in tech - sleep in your cubicle, never leave the office. I already know a few people that do this (although they own homes or have apartments), it would just save them rent/mortgage money.
 

modi123

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Google, and a few other big'uns out west, have folk that sleep in their cars and vans in the parking lot. Saves on rent, and the 24/7 facilities make it do-able.
 

Jagger100

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Coal mines used to provide housing and stores (at cost!) to their employees. Maybe this will be a new trend in tech - sleep in your cubicle, never leave the office. I already know a few people that do this (although they own homes or have apartments), it would just save them rent/mortgage money.
What used to happen in those coal mines is that expenses seemed to magically match your salary so you ultimately you were working for food and shelter, somewhere between an indentured servant and slave. And you could never save enough money to leave. Essentially the convergence of Communism and Corporate Monopoly. You work for the same authority you get your needs from.

At least right now you have a monopoly you work/buy that item from that entity. But these megacorps are spanning industrial sectors. They are also working together in endevours other than the direct concern of one or both corps. Case in point Mastercard pressuring Patreon over content on Youtube. So, we're all headed for this situation in the not distant future.
 

nutzo

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Seattle has a 21% increase in jobs? But I thought the $15 min wage would decimate jobs?
That's since 2011, or only about 3% a year.

The $15 minimum wage mainly affect the low income workers, not people that work at Microsoft and other high-tech companies.
(like all the food places that have closed down over the last couple years).

Without the $15 minimum wage, it's likely the job growth numbers would have been higher.
 

ronin4740

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Great! So Microsoft accomplishes this... Guess what happens? Folks with lots of money will buy these as investment properties and turn around and rent them at 2-3x what the mortgage is because that's the going price of housing in the area. Net result? Nothing changes.
 

Wrecked Em

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Honestly, the reason most people live on the Eastside to begin with is because they don't want to be near middle-low income households.
 

PeaKr

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Maybe the government should close the loopholes on m$, amazon and apple, tax them fairly, then control how the money is shelled out to public programs and housing development, you know, do their jobs. Beware of corporatocracy, its not your friend.

Seattle has a 21% increase in jobs? But I thought the $15 min wage would decimate jobs?
An increase in jobs doesn't tell you about the negative effects of too high an increase in minimum wage. Including its effects on workers. In the last paragraph is a link to the NBER's report on the subject.
 

DocNo

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And just like that all of the government permitting and other BS that stands in the way of development over there disappears overnight . . . maybe the $25 million in grant money is the grease payment.
Yeah - they don't have a problem because Microsoft made a bunch of people successful, they have problems because like in San Francisco there are a bunch of idiotic policies that severely restrict supply. So of course demand goes up!

Then again what do you expect when people elect socialists that have no idea how real world economies work.
 

DocNo

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Maybe the government should close the loopholes on m$, amazon and apple, tax them fairly, then control how the money is shelled out to public programs and housing development,
Plenty of housing development would happen if the the brain dead local governments would get out the way of it.
 

sfsuphysics

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More specifically, $225 million will be invested "at below market rate returns, focused on preserving and developing new middle-income housing on King County’s Eastside," $250 million will be invested "at market rate returns,"
Sounds like an investment to me, "below market rate" still is going to return pretty decent dividends if that market rate is the Seattle area, and "market rate" is just going to bring in money hand over first. Presumably this is going to go in a direction opposite of Single Family Homes, and more condo/apartment lifestyle in a "community" area since those always look nice in slideshow presentations. Since the land is more expensive than the housing chances are most of that is to buy property, so maybe a few thousand units, won't change the rates of housing in the region one penny (for the supply/demand argument that always pops up), and more likely than not is going to make the quality of life worse for those who live in the area because now there's going to be a lot more traffic and you know there's not going to be enough parking for everyone living there and it'll just pour onto the city streets around other peoples houses.
 

meme

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The solution to expensive housing in desirable cities like Seattle is simple.

Build lots of tiny apartments. If a 700 square foot apartment is renting for $2000, you can rent out 150 square foot apartments quite cheaply.
 

c3k

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If MS can toss half a billion out (at least, that's how they're spinning the PR) on a "feel good" project, I don't think I need to EVER pay sticker on another MS product again.
 

nomu

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Since the land is more expensive than the housing chances are most of that is to buy property, so maybe a few thousand units, won't change the rates of housing in the region one penny (for the supply/demand argument that always pops up), and more likely than not is going to make the quality of life worse for those who live in the area because now there's going to be a lot more traffic and you know there's not going to be enough parking for everyone living there and it'll just pour onto the city streets around other peoples houses.
Seattle Times said:
As a result, luxury units have made up 85 percent of the 62,000 market-rate units opened in King County since 2010, according to RealPage. Just 9,000 new units aimed at middle-income earners have been built in King County so far this decade.
("Middle-income" is up to $110,000 for a household, assuming an upper bound at 120% MHI)

A few thousand units will make a difference. The question is if even a few thousand is possible.
 

Comixbooks

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They have these apartments on the other side of town they are as big as a bedroom. I couldn't imagine living in one of those. Plus you have to be 55 to live in one. A lot of people live in less than ideal housing.
 

pizzahut4life

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More people moving to Seattle with no plans because they heard a whisper of low income housing. Sure they won't end up on the streets..
 

WBurchnall

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Great! So Microsoft accomplishes this... Guess what happens? Folks with lots of money will buy these as investment properties and turn around and rent them at 2-3x what the mortgage is because that's the going price of housing in the area. Net result? Nothing changes.
Maybe, unless they lobby state lawmakers or city officials to allow them to only sell to individuals within a certain income bracket. IE you have to make under $200k per year to buy this property. Right now, I think that might be quasi-illegal to do so however with a bit of changing of the laws to suite corporate interests (happens alllllll the time it seems lately), why not?
 

blade52x

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Catch: MS employees won't be considered middle class so they won't qualify for this housing anyway.

... until a $250K household income is considered middle class in certain areas of the country.
 

sfsuphysics

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("Middle-income" is up to $110,000 for a household, assuming an upper bound at 120% MHI)

A few thousand units will make a difference. The question is if even a few thousand is possible.
But the problem is that this housing isn't reserved for existing residents, it's for whomever wants it including people moving there. But my point is the 1000 or whatever units aren't going to put a dent in the overall cost of housing.
 

CombatChrisNC

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RTFQ.

Only $25m is actually being given away as grants. The rest are investments. MS is going to make money on all this. The real headline should say ''Microsoft enters real estate business".
 
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