Microsoft Corp. (NASDAQ: MSFT) has announced plans to spend $500 million on affordable housing and homelessness initiatives over the next three years. According to Brad Smith, president of Microsoft Corp., the goal is to ensure lower- and middle-income workers can continue to live close to where they work. The initiatives will focus on six cities – Redmond, Bellevue, Kirkland, Issaquah, Sammamish and Renton – where the company has more than 50,000 employees.
According to a statement from the company, the funds will be used to develop affordable housing and help alleviate homelessness in the Seattle area. Microsoft plans to use $250 million for market rate loans to support low-income housing throughout King County. Another $225 million in low-cost loans will be issued to subsidize the construction and preservation of middle-income housing.
Microsoft says that as the loans are repaid, the funds will be used to lend capital to other developments with the same aims. According to the company’s estimates, tens of thousands of units of housing could be created in the area using the method. That would be considerably more than the company would be able to create if it was simply building the housing units itself.
The Seattle region is one area of the country most in need of a substantial increase in affordable housing. Housing costs have risen faster in that region than in any other part of the country lately, making neighborhoods once considered moderately priced unaffordable for most workers. Microsoft said, “This gap in available housing has caused housing prices to surge 96 percent in the past eight years, making the Greater Seattle area the sixth most expensive region in the United States.”
The company is also planning to use $25 million for philanthropic grants for homelessness initiatives and legal aid for people facing evictions from their homes. As of January 2017, the city recorded more than 11,500 homeless residents. A $5 million dollar grant has already been pledged to Home Base, a program created by the Seattle Mariners, the King County Bar Association and the United Way of King County, to tackle these issues.