Seattle, USA – July 10, 2014: A homeless man sleeping on 4th avenue in downtown mid day next to an apartment sign that reads now renting.Getty
Microsoft is trying to build a more inclusive Seattle with a $500 million cash injection into the city’s affordable housing projects. The tech giant created a $475 million trust fund to support the creation of middle-income housing along with a $25 million donation to address homelessness. In a city that’s home to two of the largest tech companies, Amazon and Microsoft, can a society that values private profits more than public welfare ever truly address the problems of its own making?
The Breakdown You Need to Know
Since Microsoft has committed such a small portion of the money to addressing homelessness it will be hard to move the needle. Previously CultureBanx reported Seattle has the third largest homeless population in the U.S., after New York and Los Angeles. A point-in-time count last year tallied more than 11,600 homeless people in King County which is the area of Seattle where Microsoft is located. Black people represent 6.2% of King County’s population and have the highest homeless rate in the area at 29.2%. These figures are a 23% over representation for African Americans in Seattle’s homeless sector, according to the U.S. Department of Housing and Urban Development’s American Community Survey.
The $25 million in grants to service low-income and homeless residents in Seattle is merely a drop in the bucket for the software company. To further put this into perspective for you, the company’s plan represents just 2.7% of its annual net income. Not to mention in the past decade they have made $184 billion in net income. It could also be viewed as a one-time 31% increase in the company’s advertising budget.
Affordable Housing Awareness: Microsoft’s capital pledge to affordable housing projects should be more accurately categorized as an investment. Developers will have access to $225 million in below market interest loans to build units aimed at households with $62,000 to $124,000 annual income. None of these people would be considered to be living in poverty. Additionally, $250 million in market rate loans will be extended to build housing for households with less than $48,150 annual income, still well above the poverty line.
Seattle’s Eastside suburbs which is near the the company’s main campus in Redmond, will be the primary focus of its affordable housing push. Microsoft plans to disburse these funds over the next three years.
The company’s loan arrangement allows them to keep reinvesting the funds in other projects. Since they are planning on expanding their headquarters in the Seattle area, adding 8,000 employees that will need places to live, this could be a lucrative plan for the company. However, some could argue the $500 million commitment is merely a selling point for future recruitment. As the concept of corporate responsibility continues to evolve it will be interesting to see what other tech companies decide to address the issue of housing inequality head on.