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Microsoft upped its commitment to its affordable housing initiative by another $250 million last month, bringing the total to $750 million since its initial announcement about a year ago. Concurrently, the tech giant announced $55 million in investments and grants towards its original $500 million commitment.
The latest quarter-billion dollars will be in the form of a line of credit to the Washington State Finance Commission, according to Jane Broom, senior director at Microsoft Philanthropies. The capital will be deployed so WSHFC can “preserve and recycle the state’s limited tax-exempt private activity bond volume cap.” It will enable the financing of approximately 3,000 additional units of much needed affordable housing.
Other projects Microsoft announced at the same time as the no-cost $250 million line of credit to WSHFC included:
- Evergreen Impact Housing Fund (EIHF), a newly launched partnership between Seattle Foundation and WSHFC with support from JPMorgan Chase & Co. Microsoft will support this fund with a $50 million contribution to promote the development of approximately 1,250 low-income housing units on the eastside of King County. Bloom described EIFH as a first-of-its kind structure that leverages the Low-Income Tax Credit program by offering last dollar investment to efficiently develop affordable housing that wouldn’t otherwise be built.
- HomeSight’s Othello Square Project, which will receive a $2.5 million philanthropic grant to support the project. Located adjacent to Othello Light Rail Station, the project (described as Seattle’s most diverse neighborhood) encompasses 192 units of affordable housing, early learning education, small business incubation, cultural celebration and preservation, and financial services.
- Rise Together, a collaboration of six nonprofit organizations that are focused on preserving their communities by creating 400 new units of low-income housing in Seattle’s Central District, Capitol Hill and White Center neighborhoods. The partners will receive a $2.5 million philanthropic grant.
Since inception of its initiative, Microsoft has invested $380 million in grants and loans, which the company estimates will result in the creation or preservation of 6, 671 affordable homes.
As part of the announcement, Bloom said the initial response to Microsoft’s request for proposal (RFP) was “less than we hoped and showed us just how difficult it is to create affordable housing where it typically doesn’t work.” Nonetheless, she said they are starting to see a pipeline of new ideas and projects on the Eastside “where there really wasn’t one before.”
When Microsoft first announced its affordable-housing initiative, it said it intended to concentrate $225 million in below-market-rate-loans on the Eastside, where most of its local workface is located.
Bloom cited data from a collaboration with Zillow that shows there was a gap of approximately 316,000 middle- and low-income affordable housing units in the Puget Sound area, up from the 2018 gap of 305,000 units. She also said Microsoft’s data science team found the year-over-year growth rate of the affordable housing gap has slowed from 10.8% in 2017 to 10.5% in 2018, and to 3.6% in 2019, noting while encouraging, “it’s clear that what we really need to do is see the housing gap fall, not continue to increase.”
“We will double down in the coming year to work together with local mayors, councils and city staff and push harder for the critical policy reforms we believe are vital in order to move forward,” Bloom stated in a blog post. She also recognized that achieving a decrease in the affordable housing gap will require a spectrum of new financial, technical and societal approaches that are created in partnership with people who share a collective vision. “Our community needs to come together and act with greater urgency, creativity and shared accountability.”
More details on Microsoft’s affordable housing commitment may be found by visiting: news.microsoft.com/affordable-housing.