Is this perhaps going to be a small component of a larger solution to the new home construction NIMBYism that is rampant on the West Coast? We can only hope.
1
If this headline was
"Microsoft pledges $475 Million in Loans for Affordable Housing"
it would have been the biggest yawner in today's paper--Microsoft doesn't even have a timeline.
2
Those are going to be 12 nice homes
$500,000,000. Gee, that should be able to house about 1000 families. Pledging 1% of their $23,000,000,000 annual income to compensate for the marginalization of Seattle's middle class. Mighty large of them.
3
Idea: The 150
A 150 square foot wood house with flat roof, front and back wood doors with deadbolt locks, front and side storm windows with screens and optional removable cast iron grates, hardwood floor, closet, bathroom with toilet, sink, and tub, air conditioner vent, electric heat, solar panel, and filtered rainwater tank.
1
How sad that We, The People, have to depend on largess from billionaires, and that it is viewed as even remotely acceptable.
We have become a feudal state as the serfs cheer.
https://emcphd.wordpress.com
10
"I owe my soul to the company store."
3
All these heart-felt but somewhat impractical suggestions seem oblivious of a fundamental economic concept called the law of scarcity. No matter how earnest, only a limited number of people can live in Seattle. Adding housing in under-built areas, replacing single family houses with high-rises, and even mandating two people in every bed can increase the supply, but still cannot meet all future demands.
Housing in Seattle, like many big, crowded, and growing metro areas is expensive because of this simple economic concept. Putting more money into the buyers' collective hands may help some individuals, but it may also push average prices even higher.
4
What about a sunset clause on where the tech workers could live, including cafeteria workers and shuttle drivers? Instead of jacking up the price older homes and apartment buildings, which are more desirable, these workers would need to live in Amazon or Microsoft housing, if you will, for the first ten years? Considering many of the workers would not be from LIC or Seattle, it might help integrate these new workers over time.
2
This seems misleading.
Microsoft pledged to loan money not give it.
7
In medieval times the aristocracy built housing for craft and kitchen workers who labored in their castles. So now we have Microsoft, the new aristocracy, doing the same thing 600 years latter. Let's build an equitable society not dependent on the "good will" of the upper class so maids, teachers and cops can clean their house, teach their kids and keep them safe.
12
I recently had a college educated employee ask for a slight pay reduction so that they could qualify for affordable housing.
This is we are at. You either have to earn $400k or earn less than $30k to have a home. Anything in between you have to move a 1 hour commute away.
Good luck!
13
Microsoft helpscwith urban housing..And Amazon? Cardboard boxes?
1
I never understand these arguements about "affordable housing." The same things could be said about "affordable cars" or "affordable schools." Things cost money. "You don't have the money? Oh, well..." I was recently in a disscussion with someone about commuting... Public transit is typically subsidized by taxes to the tune of 85% of the paid fair. Meaning you'd pay 15 cents of the actual cost of every dollar spent to get your ride. I pointed out that transit plans - like huge buses and huge freeways - kept people doing things that are bad ideas, such as commuting 25 miles to work... forever. Because they could. Eats up land, pollutes, other downsides.. I was then asked, "What about people who can't afford an economical, low pollution, reliable car to get to work?" I said, "You drive a Prius. Should we start by giving someone your car?" She was offended. I'm offended that I keep getting told to solve other people's problems by "giving" something I have to them. You want affordable anything? That's a personal problem... You figure it out without dragging me into it.
2
@Johnny Woodfin
Who paid for that road you drive on? How much government assistance do you receive in the form of a mortgage interest deduction?
7
This is a sadly weird article with a misleading title. Although the focus is supposed to be "affordable housing," all the photos show single-family houses. Excuse me, but people with modest income in Seattle live in apartments. Also, none of the plans discussed here referred to housing *in* Seattle -- just in the suburbs (though at least the title accurately cites only "Seattle Area"). In short, if you're like me -- trying to survive on less than $70,000 a year in the city of Seattle -- Microsoft's plan has nothing to offer you.
It's so sad to see my adopted city, where I moved 30 years ago to escape gentrification in Manhattan, now dying of the same disease.
8
I'm a bit torn on this. On the one hand anyone other than the government would be a far better choice than what usually happens. But I have a bigger problem with companies that would rather import labor than train the people in their neighborhoods to do the job.
Tax credits for companies that train US Citizens over hiring foreign workers or outsourcing from other countries.
Make America Work Again.
5
The devil is always in the details. The financial and public relations benefits to Microsoft should be written about.
Where will the housing be put? Will single family homes be torn down in favor of multi-family housing? Will the quality of life for existing residents be diminished?
How will affordable be defined, and even if it is defined as encompassing very low income people, will these very low income people have their applications for "affordable" housing get considered?
2
This demonstrates why taxes on corporations are useful. We can put the money to various purposes to help society via a collective process called "government". Thinking that "Microsoft" can do the work that is required to administer and design programs for the needy is foolish. Our government (hush, it's a bad word) has developed an expertise in that. And, no I'm not being sarcastic or funny.
6
As an old Telluride guy and one of the founders of "Deed Restricted" ownership and rental affordable housing, I wanted to share my experience of 40 some years. It is important to know about a conference in Aspen in 1972 sponsored by the Aspen Institute and led by Richard Saul Wurman.
The development of Workforce Housing which is not HUD housing and which over the years has been adopted by many states and foreign countries as a tool for providing something other than the "for profit housing" marketplace and Federal housing programs began in Aspen at a conference which is now known as TED and where it all began.
The idea we adopted was "deed restricted" housing which was both ownership and rental.
The deal was that government would subsidize the development of housing and then locals would enter a lottery to win the right to either own a rent a unit at an "affordable price". When someone moved out or decided to sell the property, the price was limited by a maximum of a 3% profit per year and rental housing was held to similar rent increases.
Portland and Seattle adopted the plan years ago during up zonings, but did not follow through when people were not watching.
Housing capitalism can only work in the free market with unlimited land and product within a convenient proximity to the workplace.
The choice of going up or going out and even adding free transit is ultimately limiting and restrictive.
China adopted the program and launched it with $200 million a few years ago.
2
It would be so easy to explain. Why won't the Democrats do it?
We have the data that show:
Progressive taxation built the great American middle class.
Regressive taxation, that now is the case in all states as well as the federal government, is destroying the middle class - but creating billionaires.
For instance Germany, the progressive engine of Europe, has only a fourth of the people that the U.S. has BUT spends 650 times what America spends on training its people for work.
The solution to so many of America's greatest problems is the same: Beat the living stink out of every Republican you can get your hands on.
3
And if Microsoft did nothing everyone would also complain.
Sure this is in Microsoft's interests but it is also in the interests of the community. Kudos to Microsoft for a bold initiative.
7
I'll be cynical for a moment. Microsoft spearheads a campaign to increase taxes on property owners in exchange for transportation which benefits Microsoft. However, Microsoft rejects a business tax designed to improve housing conditions for all residents. Instead, they opt for a one-time, non-continuing donation to the housing problem they helped create.
Yeah, that doesn't sound like generosity to me. That sounds like corporate strategy. Microsoft is betting $500 million now is going to cost the company less in the long run.
5
@Andy
I know from where I state that the city of Seattle government had no real plan for the monies from the absurd legislation that we voted down! As a resident of the city, I am always dismayed that many of their money-raising "schemes" are always "half-baked" requiring not only greater detail(s) but accountability!
In the case of the employee tax, there was neither and we got petitions out on the street and had them overwhelmingly filled. It really made a whole lot of nonsense to tax an employer who is paying taxes, hiring employees who also pay taxes, without really providing a needs/wants of the benefits rather than ticking off the companies that would have to begin layoffs or those employees getting laid off, relocate..another loss of the tax base.
2
Company housing for employees seems like a real double-edged sword. Many people already stay at their jobs because of health insurance, but imagine the disincentive to change jobs when it means a potential disruption to both healthcare and a roof over one's head? And if an employee is fired they get to clear out their desk AND their house? Some may be for it, and the devil is always in the details, but I don't know if I'd want to have my entire life that integrated with my employer.
Also, I think while it's great that tech companies are offering assistance in one form or another, we shouldn't be too quick to accept them as the sole contributors - or solutions - to these issues. Zoning reform, rent control, and similar issues are major concerns in many of these places (not sure about Seattle specifically), and can help reduce the costs and time associated with building.
5
Thank you for mentioning zoning reform. Exclusionary zoning is a big contributor to societal divisions!
1
@Adam
This program isn't about company housing. It appears to finance the building of housing stock, the eventual residents of which are not in any way beholden to Microsoft. So while, the concerns about company housing are legitimate, in relation to this particular program, they are not particularly relevant.
Additionally, those working at Microsoft generally would not qualify for much of the income restricted housing being contemplated.
The zoning issues in the area are highly relevant, and I don't think anyone locally accepts the tech companies as sole contributors or solutions.
1
@AV Regarding company housing, I was responding to the line "Others plan to build housing for their own employees." The article doesn't go into much more detail and doesn't say which companies are proposing, but it didn't seem like it applied to Microsoft.
I was hoping that the other concerns re: zoning were implicit, but mentioned them as the article was silent on them, and many readers may not live in these areas.
A federal tax based on Land Value is needed to incentivize better land use.
1
@Captain Oblivious Homeowners cannot afford more taxes on their homes. More real estate taxes (especially at the clueless federal level) will be the straw that breaks the camel's back and sends more people into a state of homelessness. You cannot tax this problem away. Folks need to earn enough to pay for a decent place to live. Period.
4
While it’s true that this might not be wholly altruistic, as the kicker quote indicates, this is still an important and powerful step for an influential and lucrative tech company (or any behemoth, frankly) to take as workers increasingly have to spend upwards of 40% of what they earn on housing. Many of these companies also claim to value diversity and inclusion - either because they want to retain relevance in the global marketplace or because they realize that a monocultural perspective hurts their bottom line because it stymies innovation. Whatever the motivations, the dearth of affordable housing and companies’ failure to reckon with it is a bellwether for things to come. We are running out of space and the number of jobs that can support the high cost rentals/properties for sale is not growing at the same pace. Long term investments like this are smart for big companies to consider.
3
Moved across the country 4 years ago, and haven't looked back since. Good riddance to ridiculously high housing costs.
1
If you want to "tackle inequality" then you'd end Citizens United. Inequality isn't that hard to fix. It's just hard to get people off the worshipping-corporations success merry-go-round. People think nothing is connected to Earth. These corporations couldn't get rich and successful without soil, water, natural resources. Do you even know where you technology's natural resources come from????? Corporations have become American's God.
9
Full disclosure, I only read the headline
The math doesn't work out, a 2 bedroom condo costs about 1million, divide that into 500 million = 500. You need about 10 to 50 times that amount...
What Seattle needs is a massive rapid and commuter train upgrade, gargantuan broad-spectrum housing construction and guaranteed mortgages normal income earners can pay off before retirement.
6
@Ted They're taking about cost of construction, not sale price. I would say the average cost to construct a unit in Seattle is currently around $450,000.
We need a tax overhaul when Democrats are again in power. So corporations pay their fare share to society. We don’t need “generosity” from these corporations. We need laws to make them share their wealth with the population. Socialized healthcare and university. As in other first world countries that are more fair than the US.
8
Why should they share their wealth outside of with their employees and shareholders? What you’re championing is for are handouts and that’s wrong.
1
Why should they avoid taxes by moving money around offshore, or bribing politicians to keep loopholes or dodges in place, or thru financial chicanery by their armies of accountants?
Some of the largest and most profitable corporations post derisory tax contributions in the low single digits, or even zero, like Starbucks, Amazon and GE.
The loss of tax revenue from corporate America is hurting federal and city/state finances badly, and working and middle class people have to either make up the deficit, or see essential services go underfunded. Shame on those who make excuses for the deceitful rich.
6
So then you were a fan of Trump lowering the corporate tax rate that allowed offshore dollars to flow back into the states?
1
I know Seattle very well. This is a start, but only a start. Seattle is a city where housing costs have gone from very modest to through-the-roof within one human lifetime. It's a supply/demand problem, and there has not been enough new supply. In order for such efforts to be effective, there must be incentives to builders to keep costs down. Seattle is full of new fancy condos/apartments built by private developers that cost as much as the surrounding single family homes. That does not help to lower prices. Modest, efficient construction such as modest condos, townhouses, rowhouses, etc, could lower costs AND help increase density. Achieving that will require some sort of guidance or regulation from the city/regional government, probably. The modest WWII homes that are common in Seattle must have been built in a similar spirit, back in the day. Now the city needs greater density, as in condos/rowhouses/townhouses. But the simplicity of the WWII houses can serve as a model to envision what functional, effective, lower-cost modern housing might look like in Seattle, or in other cities with expensive housing.
4
@CitizenJ There's no economic reason to build modest housing if there is very little supply of cheap land. Although it's politically unpopular–or impossible?–there needs to be up-zoning of more of the city. About 75% of the land is for single family homes.
1
@ENR Agreed. But upzoning, by itself, will fail for the reasons I say above. There must be incentives to build modest housing, not the fancy condos that cost as much as single family homes .
2
@CitizenJ New condos are not expensive because the materials are luxurious: you will not get even close to a million dollar worth of materials in a million-dollar condo in Seattle even if you put marble in the bathroom and gold-plate your taps.
Similarly you cannot build affordable housing just by using simple materials.
What makes everything expensive is the cost of land. If the land costs $500,000 for a property, and that the property costs $200,000 minimum to build with the cheapest materials, you can’t get a property for less than $700,000. Actually at this level of prices, it does not make economic sense to use the cheapest materials: if you can slap a $20,000 flooring to increase the price by $50,000 you can’t expect developers not to do it.
Actually there are a lot of options that cost relatively little on a new build but that have a lot of value (soundproofing, insulation, large windows…): for that reason any new-built will always be in the higher end of the market. You can’t expect it to be in the lower-end of the market, because you will not build an old building with drafty windows and cigarette stains.
Good news is, when you cater to the higher end of the market people who will live in these new buildings will not compete with other people on the rest of the market. So it still helps everyone.
4
In the metro areas that are having a housing affordability crisis the idea that some money from a company or a push by elected officials will do nothing.
The elephant in the room that economists, policy wonks, and elected officials all never talk about is mortgages.
When you buy a house that loan is bundled and sold to investors. Thousands of them. The way that they protect themselves against loss is the ongoing, above inflation, increase in the value of those properties. A few people default, but they get their principle back when the sell the property which has gone up in price since the loan was made on it. The Great Recession is what happens when the value does not cover those properties that go under.
The only way for housing to be affordable for the bottom 1/2 of American pay checks is for the ENTIRE STOCK OF HOUSING to have their value drop or not keep up with inflation which over time is the same thing.
Increase the supply and the price goes down.
Now does anyone really think that all the home owners today will accept a loss in the value of their property and/or the people who hold all that paper will take on more risk?
Of course not. Therefore, it is structurally impossible to reverse the problem and have housing that is affordable to the bottom 1/2 of the pay check class.
We have created a structural straightjacket that only radical chance can undo. People are afraid of radical change and therefore nothing will.
3
@JD If tomorrow house prices go down 20% you have a problem. If house prices for down 20% over even just five years you are fine: investors might take a larger hit, but they will survive it: in five years people will build up equity in their mortgages to cushion the financial blow.
The real problem is property owners, whose interest goes against any plan that would decrease the value of their property (especially if the building happens in their neighborhood, because of NIMBYism). But a tax on property values would put many of them on board, because it would create an incentive for owner-occupiers to have property values (and hence the tax base) decrease.
Tax land value instead, and you have an incentive to build taller buildings (to share the tax load amongst more properties): property owners might actually benefit from selling their plot to build a taller building on it (providing you relax zoning restrictions).
The increased tax intake can be used to reduce income tax, so the operation is neutral for the taxpayer. There is a way out of this crisis.
1
And this is what Republicans always wanted. Corporations deciding public policy, not government. The poor at the mercy of corporate generosity. The working poor, who paid their taxes at a rate much higher than any of these corporations. The working poor who bought the products of these corporations. What depravity.
16
Suppose the same way Dems have pushed out welfare and or other safety nets to enslave their base? Your logic can play both ways.
Corporations are responding to the politicians who can’t ask their base for another dollar for help.
And so, they have generously helped out.
However, you have twisted it as a perfectly good Lib would and you blame it on the corporation.
Soon enough when ALL these corporations have masters AI and the need for humans is obsolete, you will have no one to point the finger at but your crummy policies that pushed them there quicker than what they would have liked.
2
There is mill housing in my NH mill town (from 150 years ago). And good, reliable housing it is. However, you lived in it at the mercy and whim of the "Company" for a century and more.
1
Same thing in the textile mill towns where I grew up in the south. Also in the logging towns on the west coast. Employees lived in employer-owned houses, were made to use their pay to buy groceries & essentials in a "company store." Children went to company-run schools (until they were old enough to go to work in the mill) Basically, the company owned every part of their employees' lives. In remote rural areas where there weren't any other employment opportunities, this was basically a form of slavery.
Then, of course, all the mills, lumber plants, closed. You know the rest....
1
Be aggressive, avoid taxes, make a lot of money, then "give back." Seems like the same formula Gates has been using for a while.
3
Visit any Big Ten school. You see tall dorms and apartment buildings. But apparently building up is too low brow for Seattle and it’s suburbs. You don’t want to spoil the view.
1
@Shamrock You are incorrect. I live in Microsoft's hometown, where six-story apartment blocks are sprouting like weeds wherever there is space for them. Seattle has more construction cranes in operation than any city in the U.S., and most of them are building apartments. Seattle is also starting to upzone what are now single-family neighborhoods. I suggest you visit the University of Washington, which is already surrounded by tall dorms and apartments.
1
Focusing on middle class housing and light rail is an excellent choice for the Seattle area. More distant suburbs have been growing like crazy since the light rail opened. Back in the '70s and '80s we lived in an area near Redmond (Microsoft's home town) and bought a home back then for $24,500 (in the last years of a "Boeing bust" when property values temporarily tanked). We sold that place for 20 times that (3 houses were eventually on those lots). We recently went back out of curiosity and our old place had been completely razed an a mini-megahouse had been built there. (Also razed, all but one of the trees we had planted - sigh).
Middle class housing is ultimately more important than homeless shelters in my opinion because a lack of ordinary housing pushes the marginal families out of their own places. It's hard to hold a job and send kids to school from a shelter.
7
@Kim from Alaska
did you live in the Fall City- Duvall- Monroe- Sultan area? My daughter lived in monroe for 6 yrs and we watched the out of control development that occurred all around. Duvall is practically unrecognizable. It also would take her almost an hour to drive to school , which was only 20 miles away. Her friends who grew up there have all had to leave due to lack of affordable housing and have had to leave their families behind. Enjoy Alaska ! ( I sold out of Portland and now live up in eastern BC)
The median house price in the Seattle area is north of $770,000 so that would be around 650 houses purchased at the median price, or 0.4% of the 156,000 units needed.
This is clearly an area where a change in public policy, not corporate largess, is needed.
9
@Godzilla De Tukwila, wait, now. I thought we let the beautiful and sacred 'freeeee market' decide these things. Make it a matter for public policy?? O Noes!
At this moment, we are experiencing the shutdown that libertarians tell us would be the wonder of a smaller federal government. Now, they say, we'll start seeing other proud, independent Americans pick up the slack, and gather like Tea Party protests to pick up garbage in their nearest national park, yes? Crickets.
Well, then, we'll see evangelical churches all over this nation, who defend trump, opening their sanctuary to furloughed workers, or their homes, or any of those private means we're supposed to rely on instead of govt, right? Silence.
As far as I can tell, no trump supporters actually do anything but whing as he does, blaming all liberals for all challenges, but when they have to walk their libertarian, tax-saving walk, to IMPROVE things, I don't see any of them giving us an example of how their faux ideology works, here and now, in reality. C'mon, step up! Show America how each individual person will do their proud frontier thing or something. Government is small enough to 'drown in the bathtub'. Show us the way to the utopia this can be! What would John Galt do?
2
@Godzilla De Tukwila
The plan doesn't seem to be about buying market rate houses, but rather financing both low income and market rate developments.
You are correct that even then it will be a drop in a large pond of need, but the plan should still be evaluated based on what it is, rather than what it is not.
Lending money to existing projects (that might very well get financing anyway: apparently the loans are meant to be paid back, and earn tax credits, which makes me think that they are not supposed to be charity money) is not the same as actually building the housing that is needed. Capital is not necessarily in short supply these days, otherwise we wouldn’t have rock-bottom interest rates.
Also if the point is to increase supply and to reinvest the money as it is paid back, why focusing on affordable housing rather than market-price housing? By contributing to market-price housing you directly contribute to increasing supply and hence to decrease prices for everyone, not just for the happy few that win the lottery of being granted affordable housing. You also get your money back more quickly, and hence can invest again more quickly. You just do more with the same amount of resource.
Finally what strikes me for the pictures is the low-density housing in them, while we’re talking about a housing shortage... The real question is what are the dynamics that still allow such housing that is not adapted to the current level of demand? How to change these dynamics? Building is cheap and affordable for pretty much anyone, the real issue is the lack of land. And if land were used more efficiently with denser housing it wouldn’t be scarce anymore.
4
@Bob Robert- well bob, do you really think the rest of the world wants to live in Manhattan? We certainly don't, and we're the ones who have a say and skin in the game. Also, the problem is not having more housing for high-paid tech workers, who can already buy in this market. No, we need housing for teachers, and firefighters, and nurses, and government employees, and restaurant workers already priced out of that market, who run everything while the rest of you collect a big paycheck in a glass tower. Without us, your costs of living go sky high when we commute from afar, or just can't get there at all.
While you are certainly entitled to your opinion, that is all it is.
@laguna greg Weird assumptions about me but never mind.
The problem with not caring about providing housing for high paid tech workers, is that tech workers are going to live somewhere anyway: they don’t disappear if you don’t build them housing. And that’s how places that used to be affordable gentrify: because even high-paid tech workers (however you define that) have places that they deem too expensive to live in, and if housing for them is insufficient they will move to these affordable places and price out locals (and teachers, firefighters and nurses).
So yes: you should care about providing them housing. And if building them housing earns money instead of costing anything that makes the plan much more sustainable and easy to implement than “affordable housing”, which is nothing else than subsidized housing (who’s paying depending on the specific scheme).
So the question is not whether you want higher density or not. The question is whether you want higher density or housing costs remaining that high. Everyone (pretty much) prefers low-rise neighborhoods with gardens (especially when they already own a house and don’t care about prices being high); but I don’t think people’s preference for low-rise trumps other people’s needs for affordable housing.
1
@Bob Robert - "but I don’t think people’s preference for low-rise trumps other people’s needs for affordable housing."
Bob, what on earth are you suggesting? Those "people" are the existing property owners, and voters. They already own all that land. The needs of an incoming population of potential buyers are largely irrelevant. And the suggestion that they are is vaguely insulting enough that it will disincent the existing population from ever changing land use policy. Since they are the only people who vote on the issue, it is entirely up to them and no one else.
There can be high taxes and lower property values. Just go to Pittsburgh, Detroit, Buffalo, Cleveland, etc. But if Seattle thinks higher taxes means lower property values, go for it. I can’t wait for the profitable companies to move to Texas. We have plenty of land they can make more money here. Their employees will be richer too.
2
@Shamrock Companies are indeed bad cows to be milked, because they will move eventually (or just won’t come).
Much better to tax property directly (or land) according to its value: its creates an incentive for everyone to lower the cost of housing, and discourages property hoarding (as speculation notably). It also gives the public means that are proportionate to the needs (for policies to lower the cost of housing), and is not easy to avoid (you can’t move your house to Texas).
2
$500 million is chump change for Microsoft. This means nothing.
9
@Joe
Zero would have meant a lot less.
3
@GiraffeSense Let's look at the tax profit they will make from Trump's "tax breaks". The breaks go on forever for corporations, while the working class pays for it after a couple of years of a small refund to them.
3
Given that companies like Microsoft offshore billions in profits to avoid taxation, maybe we could just prohibit such actions and get them to pay their US and state taxes providing more funds for such things as affordable housing.
12
This is no different than the old mill towns of the early 20th century. MSFT is doing right by building housing and they should manage it instead of letting any city organization manage it. It is in reality a way for them to pay their employees more and to insure the needed service people in the community can live in the city.
Subsidized housing holds down wages. Could anyone possibly live in NYC on minimum wage without subsidized housing? I would rather see employers have to pay more to get their employers and they would if not for welfare housing and food.
Microsoft is doing the right thing by building this housing if they are not going to raise their wages enough their employees can afford to live there.
Microsoft should restrict this housing to their employees and the employees of essential service providers to Microsoft like firemen and police and private vendors. It would be wrong to just start building cheaper housing so to attract labor willing to work cheaper than their current employees or to encourage the homeless to move to Seattle.
@mike.massey
What in the world does Microsoft know about housing development?
1
@Ramon Garcia I would sooner trust Microsoft to plan a housing solution than I would trust the politicians in the city of Seattle and King County.
1
If done well, it can work. I grew up in the Henry Ford Homes Historic District in Dearborn, MI. The homes were built in the early 1920's by Henry Ford for the workers in his factories. They were soundly constructed and there were 6-7 designs to choose from. Over the decades the homes were sold to non-Ford employees, but they were still affordable for other middle class families. My father worked at Ford, but on our street there were many teachers, firefighters, and police officers. Obviously, the cost of real estate was much less expensive then, but that doesn't mean that it's impossible to do now.
8
Props to Mr. Gates, BUT ...
Does it strike anyone else as "Sad", that the moral decay of our democratic government defaults to munificence of wealthy industrialists, who have captured the VAST majority of the nation's capital, just to house the people whose economy made them wealthy?
This is the practical definition of "Royalty" and "Nobility", is it not?
By capturing wealth without obligation, the Wealthy impoverish us all, at every level.
We don't want to discourage entrepreneurs, but the nation cannot afford to allow unlimited rewards; it encourages and honors greed.
Where is the tax (OBLIGATION) on those who are allowed to be successful in OUR economy?
17
@Tony E
If only these companies that are the subject of this article were managed by good hearted liberals and not the evil Republicans. I wish Bill Gates was here. He would solve these problems in Seattle, He cares about people.
@Tony E
Satya Nadella is the current CEO of Microsoft. Bill Gates is running a philanthropy right now.
My first thought reading this was that an ultra rich hoarder's group loaned the city a tip after another fine meal.
Elsewhere there's an article regarding corporate social responsibility.
Reading this makes me glad another trillion dollor company didn't bless this area by locating here.
Sooner or later another group will be added to the growing list of low-income housing people.
Poverty is both relative and absolute. To which group do the one's tossing crumbs to the hungry or homeless?
6
@Dave
Be careful what you wish for. Nobody would have believed corporate giants in Cleveland, Pittsburgh, and Detroit would decline and the streets would be full of empty lots because everyone moved away. The high tech and internet businesses don’t rely on geographical advantage. They could pick up and move in a nanosecond to another state or country.
1
Yep, scanning through the comments tells me that people are catching on. Impoverishing a society and then turning around and giving a smidgen back does not suddenly transform a person/family/business into a force for good. It takes a lot of public support to become a multi-billion dollar company these days. It is high time that they, and the elite that run them, pay for this support. It s not about giving more back to society, but rather it is about taking less from society.
9
@PJM
These companies exist to employ people and it shall be the law that no company may lay off workers, or cut wages, or be sold. The government shall hold all of the company patents for the public good. The government shall decide all issues related to the economy. Sound familiar? From Atlas Shrugged, written over 60 years ago.
I keep seeing this story pushed in national news:
“Microsoft’s move comes less than a year after Amazon successfully pushed to block a new tax in Seattle that would have made large businesses pay a per-employee tax to fund homeless services and the construction of affordable housing.”
This is simply not the full picture. Many people in Seattle opposed this tax because it would have hit 500 other companies besides Amazon and was based on revenue, not profit. Secondly, many opposed this tax because there is little accountability on how the current money for homelessness is spent in Seattle. The city failed to provide a comprehensive plan to show how the additional funds would be spent.
I’m no Amazon apologist, but they are not the only reason this tax failed.
11
My question, as always, is why do these companies have so much money? Appropriate taxation would level the playing field and provide for the needs of the communities in which these behemoth corporations exist. Schools, transportation, police and fire all need increased funding when huge companies come to town. City governments need to restrain the give-away impulse that lures these companies if they cannot create and enforce policies that actually reflect the needs of growing cities; that is, require developers build sensible, affordable housing.
14
@Lisa Calef
Free the developers! Let them build up. Don’t distort the market.
1
How 'bout 5B/ten times that by 100K per unit and Amazon matches that for 100K affordable units up to 400K people can live in built?
1
We don't want your charity. We want your off-shore money back home and taxed at the rates we who work are taxed. We want an end to your lobbyists fighting for lower corporate tax rates, rates that prevent our government from doing public good. Unimpressed.
37
Kudos to Microsoft for acknowledging, and most importantly acting on, their responsibilities to the social/economic consequences of their business.
"Good-paying" jobs is not the answer to everything, and adding "good-paying" jobs actually causes those who don't have them a lot of harm.
5
The root cause of vast majority of homelessness in bay area appears to be drug addiction or other lifestyle choices. These people have decided they can simply camp on the sidewalk of some of the most expensive cities and pursue their addiction at the expense of everyone else. Of course there is a minority of homeless who are genuienely down on their luck and deserves assistance to get back on their feet. I do not see how subsidizing the drug addict lifestyle, either by corporate money or tax money, will solve the problem. Enforcement of existing drug laws and showing some toughness against people living this lifestyle will go a long way. The liberal tolerance of drug addiction is ruining California!
4
@Andy
First of all, while the people you see on the street are often obviously inebriated, there are thousands of families, working families, who are in shelters, basements, and on couches, children spread out living with cousins.
These families, the children in particular, need our support. Blame parents all you want--the children did not ask to be born to a disabled, poor, or even addicted, parent.
Second of all, affordable housing is the carrot that can be used to force treatment and allow people to get better. You can't get off alcohol when it is the blanket that keeps you warm at night because your real blanket is soaked by drizzle.
I don't want to be LA either. But if I had to choose which scourge to get rid of, I'd get rid of the red light running, honking, tailgating bad drivers. Those folks kill others. Happy to host a homeless person in a tent if it means fewer people with deadly cars will careen through Fremont.
"The poor will always be with you." We cannot choose whether we are the last stop for people running away from themselves. They will keep driving west, towards promise of a well paid job.
But we can choose how to treat them.
6
@L Throughout California there are lots of families living in motels because they can't afford housing. You don't see these people on the streets and most are not addicts of any kind. Most are working, they just don't make enough money to live on in California. And before you start shouting that they should just move, moving is expensive. You need money to move some place. Most apartments require a security deposit of a month's rent, plus the first and last month's rent in advance. That is thousands of dollars even in states with a lower cost of living. How are you going to get that when you are living paycheck to paycheck?
7
@Joe
In the SF bay area $500 million will build at most 500 homes! San Francisco alone has over 7000 homeless people. And there are thousands of working poor living in substandard housing. The solution is to encourage builders to build more housing and building a transportation infrastructure to connect housing to employment centers. CA, the epicenter of homeless crisis, is doing neither and we just have liberal politicians preaching their usual tax-the-rich-and-corportation mantra!
For the working poor in the San Francisco Bay Area and Seattle, market capitalism has produced an epic failure.
People who own existing housing are extracting stratospheric amounts of money from the economy, at the expense of those who don't. The supply has not kept up with the demand, and what's happening now can be called gouging.
When it comes to necessities, there is no substitute for enough. Until we make a commitment to zone and build a housing unit for every office space, this problem will remain.
If there is a purpose for government in a market capitalist society, it is to step in and correct situations like this. Local governments are now starting to take action, and Microsoft is apparently actually doing something too. It's high time.
13
This is backwards - market capitalism would see the high cost of homes and enter to build more homes and drive the cost down, because there’s profit to be had. It’s government that restricts, rather than enables, the market forces that would solve this problem.
These politicians aren’t controlled by business either, because high housing costs are anti-tech expansion. This is government simply doing a poor job of serving its citizens.
2
@mlbex It is a chicken and egg thing. Do you want to subsidize housing so employers have access to lower wage employees as in NYC and San Francisco or do you want market forces to work and wages to be forced upward??
Microsoft is doing something in their own self interest that will help everybody in Seattle and it is good thing. They are essentially giving raises to their lower paid employees and employees of essential services they need by giving them cheaper housing.
1
@Tim Mosk: Market capitalism has proven that in these areas, it would rather build high-end homes for the wealthy and more office spaces. The builders and investors make more money that way. This also serves the purposes of local communities because high-end housing and offices generate fewer expenses and more income.
It's the confluence of market capitalism and local government that has created this situation. Only now, the will of (many of) the people is forcing them to rethink this situation. The government will have to influence the investors' decision making processes or the current trend will continue. Meanwhile, Microsoft serves its interests by creating something that it's rank and file needs.
1
I left Seattle in 1995 and have never moved back, nor plan to despite long and continuing family ties to the area. The local population does not understand that they live in a regressive tax state; one of the most regressive tax states in the union. They do not understand how an income tax could benefit middle and lower earners. This is where real change could occur. I live in a super progressive tax nation and we pay enormous taxes but the benefits are big and for all to see. Most of all, the people look healthy here. I'm always shocked by the poor health of folks when I visit Seattle. Good book: Saving Capitalism for the Many, Not the Few by Robert Reich
30
@Carolyn- while what you say is true, socialism carries with it its own cultural and economic problems and limitations that the Far Left refuses to see. Enjoy it while you can, because you've traded more than you know to get it.
The housing shortages on the west coast aren’t caused by the success of tech companies, but rather ineffective and burdensome government regulation.
This entire coast has 5 skyscrapers over 60 floors. Housing supply in the Bay and Seattle are both held down by restrictive zoning, even around transit hubs. Ineffective infrastructure makes turns ring suburbs into multi-hour commutes.
People upset in the comments about the effects of tech companies should put on their “companies are self-serving” hat, and reason that Microsoft is doing this because the lack of housing is driving up the cost of their workers, and a big project will give them the press needed to track and scold politicians that refuse to move towards more permissive zoning. Why else provide loans that developers could get elsewhere?
6
@Tim Mosk- our housing policies are not burdensome and ineffective. They reflect the will of voters in this area, who like the city and region as it is and don't want its character to change. You'd know that if you'd ever done more than change planes here.
You also make it sound as if the city was rife with open, buildable land that could be had for nothing if only stingy, Leftist city fathers would say yes. Just the opposite is true. Seattle proper was built out decades ago. The only open land left is in the suburbs or distant rural areas. If you want to build down in the city, you'll have to buy that land and all its improvements first, kick out all the existing residents, and then convince the rest of the property owners to go along with your plans just like anywhere else. So far, that hasn't worked very well because voters don't like it, so I don't see any great success for your plans.
You can throw as much money as you want at this problem and it won't go away. Without rent stabilization rules nothing will change until cities like San Francisco and Seattle will run out of workers who provide the basic city functions like trash, police and hospitals.
Have a look at Vienna, Austria where they solved the problem differently.
3
This could signal a return to the concept of the company town, like Hershey PA. It would be an interesting social phenomenon, particularly since the tech companies might have the ability to pull it off.
1
@Steve Williams
not only was Hershey a 'company town'. It was a 'White' town. While it was true the Hershey was in many ways a real humanitarian, he was also a racist and didn't want Blacks living in his town, staying in his hotels, or as wards in his orphanage.
@Steve Williams- the idea is fraught with so many social, cultural and political problems that I have no idea why anybody is bringing it up.
@laguna greg check out Solomeo and Brunello Cucinelli.
While I think it's all well and good that Microsoft is pledging $500 million for affordable housing in the Seattle area, according to the chief executive officer of Microsoft, Satya Nadella, they "had an incredible year, surpassing $100 billion in revenue as a result of our teams’ relentless focus on customer success and the trust customers are placing in Microsoft”.
Hmm - $500 million vs. $100 billion. Kind of seems like a drop in the bucket for Microsoft, especially when that pledge can be a tax write off.
Apologies for being snarky.
16
@Marge Keller
Yes, It is chump change to global capital -- probably less than the rounding error as they tally profits.
1
In an age defined by a chasm between those who have power and those who don’t, elites have spread the idea that people must be helped, but only in market-friendly ways that do not upset fundamental power equations - From "Winners take all: the elite charade of changing the world" / by Anand Giridharadas.
8
It's a good thing but it's a tiny drop in the bucket. Land and construction are extremely expensive in King County. $250 million of low interest loans might finance 3 or 4 buildings, maybe 300 units -- that is probably 1 percent of what is needed.
8
I applaud Microsoft. I don't think it's ideal for a captialist corporation to perform a civic duty, but our government isn't getting it done and the housing issue isn't going to fix itself.
Seattle should be glad Microsoft wants to help that much. Here in the Bay we have Google, Facebook, Twitter, and Apple and all they do is hide their money offshores to avoid taxation. Income inequality in SF creates some of the most disturbing homeless scenes I have ever seen.
10
I'm no Facebook fan, but they are developing their own housing, on campus.
@Tori
“I don't think it's ideal for a captialist corporation to perform a civic duty...”
And this is among the big failures of capitalism and the big reason America is where it is today. No being or entity exists in a vacuum. Capitalism needs markets and markets need beings that are thriving. If capitalism is causing those beings to not thrive, then it is its duty to address the issue.
Why is it that corporations are now given the privileges of civic citizenship such as unlimited free speech but constantly fight, shirk, and evade the duties of that citizenship such as paying taxes on profits proportional to what workers pay and addressing direct impacts on the communities it inhabits? Capitalists also fight “big government” for the poor and its low-paid workers but expect, as this commenter suggested, government to be responsible for the consequences of its actions, such as housing shortages, environmental destruction, low-paid employees needing public assistance, and more.
No wonder more people are coming to the conclusion that unrestrained capitalism that only takes from society, demanding membership in that society without any of the duties and responsibilities, is ultimately bad for America. Microsoft, a company founded in the waning era of good corporate citizenship, is setting a great example. But If other corporations like Amazon don’t follow suit, they should be taxed for any anti-social effects they incur.
7
@Tori
Who, other than the civil society, should perform the civic duties?
Who, other than citizens, should pay taxes on the city?
Who, other than the governed, should support the government?
Why on Earth would people be exempt from citizenry, civil duty, and government just because they own a company? Isn't it rather the opposite?
Where do you think the government gets power and resources, if not those who live under its protection?
Jesus isn't paying for all this, folks. This is a government by the people, for the people, and if you're not involved then the problems are literally your fault. It is a democracy. The government is you.
4
This is awesome. It would be even more awesome if they built entirely car free neighborhoods. European-style walkable neighborhoods without cars whizzing by - for traffic, affordability, and to save the planet.
9
@Lindsay Sturman- while I appreciate your enthusiasm, do you understand that that tiny amount of money will only pay for 5 or 6 large projects? It's not enough to affect traffic patterns or even the lifestyle of the neighborhood.
Don't blame Amazon...blame the lazy who shop there. We created that monster, and it blocked a tax hike that would have funded housing for the homeless? Fine...keep buying their junk. Soon our ex-government employees will need that tax hike when they lose their homes.
6
Seattle, you have been taxing yourself silly and throwing millions at the homeless problem with nothing to show for it. How about letting the corporations have a try? More tax just gives the city commissioners more money to toss at useless studies and programs. No, we don’t want citizen funded injection sites. No we don’t want a hands off policy that allows people to sleep in the streets, parks, cars etc. while using the city at large as their toilet and garbage pail. Let the corporations and educators have a chance, because your city government is useless at best, and enabling at worst. Thank you Microsoft.
4
@Rainy Night we don’t want safe injection sites? You definitely don’t speak for everyone
5
Microsoft just bought some of the most expensive real estate on the planet for pennies on the dollar in the guise of helping the poor. What a joke. Charity has become the biggest scam in our nation. Tax them and let our corrupt officials take the money for themselves.
6
$500 million for Seattle housing, wow!!! Where’s my pencil? That's almost ... carry the one... why that’s almost 250 houses! 350 if you’ll commute four hours daily. Bravo! So long poverty. So long unnecessary corporate taxes.
14
@Kevin
Huh? 500M by 250 houses = 2M to build each house?
@Primary Power
You are correct. That was my (perhaps failed) attempt to use humor and hyperbole to make a point. Full disclosure: in doing my pretend calculation, I did not use a pencil nor carry a 1.
@Primary Power- do you have any idea how expensive housing has become here?
3
The State of Washington has no state income tax. Consider the enormous number of well paid leaders, executives and staff in this tech rich state paying no state income tax to help this problem. Sales tax in the Seattle area is 10.2%, hurting the poor disproportionally. While it is nice to see successful corporations be responsible neighbors in their community, a well planned state income tax would go a long way toward solving these problems.
28
@HughMacMenamin- we're never going to have one. Voter will never allow it, and frankly it's the smart move on our part.
I would be livid about this expenditure were I a shareholder of Microsoft. They are not in the social services business.
@QED I'm a shareholder of Microsoft and I'm for it. In the real world, Milton Friedman's notion that corporations' sole obligation was to maximize profits has proven to be one of the most catastrophic ideas since World War II.
29
I'm also a shareholder and applaud MSFT for trying. Ideal for corporate to assume this role? No. But we don't have a capable or concerned government to address the issue.
11
@JLPDX
But if large corporations paid their share of taxes, the government would be able to solve housing problems. As it is, our large corporations buy the government and use their control of it to keep taxes low. A losing cycle.
1
Why don't they pay a wage that affords a house?
13
This is an important, positive step for the corporate world. Perhaps the silent Bezos could take on the massive waste and emissions created by Amazon and our get it yesterday mentality. It was of great interest to read that something as simple as not expecting rapid delivery of that “must have” item reduces fuel consumption and emissions as trucks wait until they have a full load before hitting the road. We should also recognize that free delivery is not the reality. Many businesses now roll the cost into their products.
And perhaps we’re past due for our institutions of higher learning to take on the challenge of teaching and deliberating the social and economic consequences and impacts in the pursuit of power and money. This would be valuable in the sphere of politics as well.
7
Wealthy corporations and people paying their taxes is a fair point. There are good reasons for taxing the wealthy.
1. They have the money, to a surprising degree.
2. For example, somebody making $1,000,000 per year finds ways to pay 10% less in taxes. That is $100,000 that has to be made up elsewhere. How many people making $50,000 per year would have to pay extra taxes to make that up?
3. Higher taxes are a bigger burden for lower-income people. A great explanation of that is the parable of "The Widow's Mite."
12
This is a horrible development. As more and more Americans fail to keep pace in a highly competitive global economy, our politics are quickly devolving to the view that corporations are no longer for-profit enterprises, but rather must function to deliver social services to employees and communities. Under siege from this emerging viewpoint, companies seek to buy peace through efforts such as this.
I have no problem with Microsoft's employees making such a contribution from their own salaries or dividends. I object, however, to the company using shareholder funds for this purpose. Unfortunately, there are forces in our society pressing corporate leaders to ignore their fiduciary obligations to shareholders.
It is important to note that there is no way to police this activity. Under this view, corporate leaders can squander billions of corporate resources on pet causes and the like. Investors were far safer when it was clear that executives were obliged to act on behalf of shareholders, and for no other purpose.
As this paper has noted, corporate executives are very well compensated. They have the personal resources to pursue their charitable impulses with their own money. The shareholders' money should be used to maximize shareholder returns.
@AR Clayboy The CEO of Microsoft cannot get middle and lower income employees to work at their established campuses, where a huge part of shareholder value exists. He calls is (rightly) a "market failure". It's the CEOs job to secure employees. The current housing market is a barrier to shareholder value due to the lack of workforce housing.
21
@TSL
Note that he did not build company housing or provide a housing subsidy to MS employees to address the specific business issue you identify.
MS gave away $500 million of shareholder money to the general public.
1
@AR Clayboy- those are loans. It'll be paid back.
And really, you should sell your shares if you're that mad about it, and stay out of this market sector altogether when you buy equities. You clearly don't understand the market forces that drove this decision in the first place, and it's going to be happening more and more.
Rezoning to permit density is a critical part of addressing housing affordability. Disappointing that neither the journo nor any of the companies or people interviews raised this. Putting more money into the existing system will just push prices up further.
3
@Leslie Ehrlich Middles and lower income people have families and want a certain type of housing that densification alone cannot provide. If you need a 3-4 BR at ground level with a small backyard in Seattle, densification doesn't help. Look at the West Coast markets and these are by far the most in demand housing typologies and what are exactly needed for the family demographic.
2
Not doing so will create the homeless issue that silicon valley has.
4
@Leslie Ehrlich It will be interesting to see how the citizens in these local communities react to the offer of more housing and higher density.
Remarkable. Microsoft is located in Redmond, yet due to the region's zoning laws private construction can not build fast enough or within reasonable distance to Redmond. Public transit remains a joke. So employees are left with Seattle as the option where housing is available. Driving value up! NYC, London, Paris etc have all managed this issue reasonably. Seattle pull your heads out of the sand and bring this wonderful City to the world class levels it's people deserve.
@Bradley
No, New York and London have not grown by 20% in the past 10 years.
When we are as old and big as London, NYC or Paris you will see what kind of city we have.
They have a few hundred years, and tens of millions on us. Compare us to Minneapolis if you wish but comparisons to London are absurd. All those cities are both finance and political hubs if not national capitals!
We have problems but "not as good as Paris" is just not making my list. I'm not a Rockefeller either. Oh well!
2
@Bradley- you are way overstating the case there Brad.
Better to put in a universal basic income (UBI) so the money from robots, green energy, etc flows to the average person. Then they can take their UBI and move to an affordable town somewhere much further and buy a house with friends/family. The UBI cash will build local economies and fuel small businesses. These affordable housing units are not a long term solution.
5
@MGL Nonsense. A UBI of $1,000 a month for every US adult would cost about $3 trillion a year, which is about how much money the US collects in income taxes now. Good luck getting Congress to vote for the equivalent of doubling everyone's income taxes.
Don’t forget about seniors! There is not nearly enough affordable housing for them in the US and Seattle is not an exception.
They don’t do tech so you don’t hear much about it but many are quietly suffering in poverty. Especially grandma... Women’s lower wages can lead to lower incomes in social security. The seniors I talk to in their 90s make even less... Could you live on $700 to $1000?
I work with seniors so I hear the reminders of this need daily on the phone. They don’t post or tweet so I’m posting on their behalf. Let’s treat the Greatest Generation with respect.
28
@Melissa Unfortunately, with the election of Ronald Reagan, the nation turned its back on affordable housing. There are some great models for providing affordable senior housing for the greatest generation and now the baby boomers.
Affordable apartments, condos, and coop units for seniors can free up exostomg family homes for households that need the space for their children or future children.
10
@Melissa I work with seniors regularly so I see what you see. On the other hand, some of those same seniors also vote in people and policies that don't help people in need, including themselves. Most polls show that older people tend to vote for Republicans or conservatives rather than Democrats or progressives. Perhaps we need to be more blunt about pointing this out to them.
2
News flash: I do NOT and will never applaud Microsoft, or any of these trillion dollar tech giants until they agree that they are not only woefully undertaxed by earnings comparison to their poor and middle class counterpart citizens, but they are also some of the largest contributors to rising greenhouse gas pollution as well as instigators in the fight against a more inclusive and efficient single payer health care system.
Microsoft 'offering' their $500 million is laughable. The real tragedy is this- Google, Amazon, Apple, Facebook, should all have been being taxed at the 90 percent rate. Had it been, our schools would be running like they should be, our health system would be up to par with all developed nations instead of dead last, our infrastructure would be on autopilot speed dial for regular maintenance and reconstruct.
Instead? THEY tell US what they want to do.
We get the government we deserve. Dream on America. Microsoft and Amazon is your new American government.
43
They're taxed less so that they can do these kind of CSR projects that lighten taxes on us. Washingtonians pay already such a high tax, where there is no other viable solution to the growing housing crisis that mirrors the 90s in silicon valley. Microsoft is a good example to other companies on what they are to do if they don't want raised taxes in their headquarters' cities.
@Richard- no we don't, Richard. We don't pay any income taxes here. We pay sales and use tax, but so does everybody anywhere, and ours isn't any greater than anyone else's. Our property taxes are very affordable still. I dont' know where you get this idea.
@RLC If the US taxed Microsoft at a 90% rate, as RLC suggests, Microsoft would move to Vancouver BC. The Canadian border is only 100 miles north of Seattle.
2
Microsoft is not giving away $500 million. They are loaning $500 million. Big difference. They are getting paid this money back. They should be giving this money to the city, not loaning it to them.
11
Really? Explain why they should give away their money? If you’re not satisfied with their “loan” , you should petition them to rescind and do nothing at all. Because, that sounds like a sound choice.
5
Better yet, why don’t we have the residents who’s home bailies have skyrocketed because of the investments Microsoft made in this particular area and have each of them share their wealth?
1
Microsoft is part of the problem and so they should be part of the solution.
4
Not to long ago the Seattle city council passed a $250 head tax on the largest corporations in the city. The money collected would have been specifically targeted to address housing and services for the homeless, but lead by Amazon the large employers balked and about a month later the city council repealed the tax. Now Microsoft gets to pose as a concerned corporate 'person' while they determine how and when the funds will be disbursed, primarily to benefit their low wage work force. Microsoft disclosed that some of the money may be donated through tax avoidance schemes. Corporations may be "people" according to our enlightened SCOTUS but it is obvious they consider themselves above the law.
14
color me unimpressed. buried in the article it becomes apparent that the money offered by Microsoft comes in the form of loans ... so basically it's an alternative marketing scheme to dupe the rubes into thinking the company cares about its local communities. this is not quite as admirable as if Microsoft had truly paid money out of pocket with no expectation of return.
idea: why not pay fair share of corporate taxes on that $8 billion in net income?
32
So now we let huge corporations and hyper wealthy individuals decide what to do with the money that they saved from the most recent round of tax cuts? Might as well call it what it is: a return to the feudal system where the Lords of the Manor occasionally bestow gifts upon their lowly serfs.
59
@Dave
"he money that they saved from the most recent round of tax cuts?"
It's money they EARNED. It belongs to them.
Whatever is built (and thank you Microsoft) please keep aesthetics in mind. How about dedicated green space so people can enjoy the amazing environment that suburban Seattle has to offer and community gardens. Make it beautiful and useful,not just under market housing. A sense of ownership and pride works wonders for the occupants and for the community as a whole.
5
@Rainy Night
Let’s keep in mind cost and volume (need/demand). In the midst of a housing crisis, an ever increasing homeless population . . . Now is not the time to be thinking about Greenspace. Efficient, functional, durable are better goals. The cost of dirt in the cities is typically as much or more than the actual materials and construction. An acre of Greenspace and 10 families living in a shelter, is not the equation we should be looking for.
3
Why should Microsoft decide what to build? Microsoft should be taxed at a rate that will support new housing, and the decision of what to build and where should be taken by local government.
51
Microsoft has $109 billion overseas, avoiding US taxation. Giving a community $500 million is nothing to these people.
46
@Ak
10.9B a tenth of that rounded up to 11B would build 110K affordable housing units @ 100K cost per AHU.
Rising housing prices represent a supply problem, as governments constantly act to restrict new housing development despite the growing US population. Governments need to allow more and denser housing to solve the problem. Giving poor people more money to spend on housing will only fuel increased housing prices unless there is an increase in supply.
3
Read 'Winners Take All - The Elite Charade of Changing the World" by Anand Giridharadas.
Moves like these are a band-aid and a PR ploy and not an effort to change the status quo. In fact they're an effort to maintain it.
30
They’re moving in the right direction, which is good and maybe even great, but consider that the current lending rate for homes is already low. The feds are at ~2% and the banks want /- 3.5% from the end user. If you can’t afford that rate, you never were going to own a home in the first place! The European Central Bank, by the way, charges Zero % to lenders. You can’t go lower than that!
If these tech giants are really serious about assisting in the low rent segment, they should get into the real-estate business and build their own rent-controlled buildings near their mammoth campuses.
5
@William Perrigo
Oh yes you can. A negative interest rate would be lower.
3
So $500 million? What’s that ..... 500 houses? Maybe?
13
Do you think it costs $100 million to build a modest house?
1
Um, no. It would be 500 houses at a million bucks each. But this not about building higher-end housing. It’s about jumpstarting lower-end housing. Avg price for a house in the Seattle area is in the 600K to 700K range. The money would need to help fund much less expensive housing.
This pledge is not wholly altruistic, as the article noted. But it’s hardly chump change. It’s always easier to spend other people’s money.
2
$3200 per unit ought to buy a lot of housing!! It isn’t even a start. Maybe Microsoft should move to Queens and collect a couple billion from Cuomo.
11
Well, a big corporation makes a smart play for once and actually supports the community that allowed it to prosper. Nice job Microsoft! This is a good start. And it only took a full generation of the crisis swelling and manifesting before your eyes, right across the lake.
3
$500 million should do a lot.
@EJ
But, in the end, do you think it will? It probably won't.
2
The most effective positive change would relaxation of zoning laws. New York, San Francisco, Seattle....pick one, a primary problem is zoning laws that discourage or prohibit density options that would expand housing and accordingly lower costs. As liberals howl about inequality, the worst regions in the US contain the highest concentrations of Democrats who have run these areas for decades. NIMBY is the silent expression while leaders all scream about tax laws, voting rights, etc. Zoning law changes? ....” nothing to see here”.
2
@Rowdy
Why should citizens have to fundamentally alter their cities because industries dont want to pay their employees enough to live where they work?
15
@Rowdy
When did the real estate world become politically rigid?
3
Challenge to Amazon: Pony up another $500 Million to help with the crisis you've helped to create.
11
@Alice S
Even better:
Add a zero to that and have Amazon match it for 10B total by 100K cost per unit = 100K units built.
This isn’t necessarily great news. Microsoft is a corporation that acts only in self-interest. And $500,000,000 isn’t really going to bring the company any grief. People forget that we have our stupid for-profit health care system because, after WWII, industrial corporations wanted to head off the Truman administration’s plan for national health care.
This could very well be an attempt by a huge tech company to head off a government attempt to provide housing through taxation. Remember, Amazon stopped building a tower to head off a crazily small per-employee fee to build more housing.
Don’t praise Microsoft until they explain exactly why they are doing this.
41
I applaud Microsoft for this plan. During the Tech-Bubble, the area where I lived suffered immensely. These tech workers with bundles of cash inflated the housing market, they literally destroyed the working class in the Central Coast. In San Francisco the lower middle class neighborhoods are suffering the arrogance of the tech workers. There should be government regulations, although we live in a Free Market society.... uhm, it seems the poor and working class are condemned to be the “new slaves” in 21 Century USA.
5
If the “Market” can’t provide anadequate supply of housing at a price affordable to the majority of people who live in the market then the market is broken and no amount of subsidized loans is going to fix it. The problem with the market is income inequality which leaves too many people unable to afford what the market produces. Until you fix that you won’t resolve the crisis because in the end market force will keep prices too high for most people.
22
@KPH
A bit simplistic- the main challenge n both Northern California and Seattle has been the flat refusal of suburban communities to accept zoning allowing for higher density development (i.e. apartment buildings). The local communities only want single family homes on large lots, which A) increases their property values, sometimes astronomically and B) at least for some of them reduces their chances of having to share their community with anyone who is a different color than they are.
7
@KPH
"The Market" is a lie promoted and perpetuated by hucksters who want to bend and shift the rules of the game based on how THEY receive an advantage.
1
This comment is off base. I am in favor of townhouses and apartments (that don’t look like the Gulag), but there is more zero lot housing surrounding Microsoft than anywhere I have ever seen perhaps with the exception of suburbs in Southern California. What developers do here is clear cut magnificent trees and flatten hills to build cookie cutter ugly and cheap single family homes. What we need is some planning, some tree ordinances, some thought about shared green space, parks, and aesthetics. What we don’t need is more ugly and thoughtless tract housing in one of the worlds’ most beautiful surroundings.
17
Maybe instead of waiting for gestures like this we could just raise taxes for huge corporations like Microsoft.
145
At the same time, Seattle lacks any semblance of real public transportation that would allow greater access to the city with less traffic.
Additionally, Paul Allen, former CEO of Microsoft, recently bankrolled a successful effort (before his death) to deny the state the ability to impose an income tax. That tax would go a long way in supporting state efforts towards the homeless, public transportation, housing support, etc.
43
@CDW
An income tax would be steep in a state like WA that already imposes some of the highest, if not the highest sales taxes among the lower 48 states.
Sales tax in the Seattle area is over 10% currently.
2
@matty If you had a progressive income tax, you wouldn't need regressive sales taxes that hit middle and lower incomes much harder than the rich.
8
The Seattle region has been a boom town since the beginning, from timber, coal, wheat, fruit and shipping to aerospace and now tech, with all of the good and bad the term implies. Urban and regional planning has been inconsistent. Multi-family has caught up to the market price demand and now rents are falling a little. But affordability is still a huge issue, pushing lower wage workers north and south, while wealthier immigrant families have moved east, stressing the road based transportation system.
There is prime land still occupied by wood mills and other WWII era quonset huts around Lake Washington that can be cleaned up and redeveloped. And there are many areas of Seattle and suburbs where substandard homes, many owned by slumlords, have been sold and renovated or replaced.
Having community minded alternative lenders like Microsoft to complement conventional bank lending. Maybe all of the tech companies could contribute to the Microsoft project.
3
This is awesome!!! Microsoft has,just raised the bar for other corporations,to be a force for good in their communities. If more corporations plough their tax savings and profits back into housing and infrastructure projects, their communities would be more greatful and proud of their successes.
7
$500 million dollars? We are now talking about corporations worth one trillion. These info tech companies are offering Americans what they always do. It's like a generous tip after a business lunch. Don't pretend that you support housing, build your gadgets and widgets in the region you have your offices, don't ask for tax breaks and special considerations when you plan a major expansion. And pay a fair wage. This isn't a new idea. Ask anyone who remembers unions.
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@Ken
Once you can shell out $500 million just like that, then you can come back and complain. Until then, let them be. They're doing a good thing. Sure, they probably could do more, but they are under no obligation to give even a cent - the fact that they're committing half a billion to investments of little direct financial value, simply because it's in the best interests of the community, is something to be commended.
25
I agree wholeheartedly. $500 million is a drop in the bucket for Microsoft. But at least it’s a start and draws attention to the issue.
13
“Like a generous tip after a business lunch.” I still think this is something appreciated by the restaurant and the server receiving the generous tip, but maybe you think both are bad or that the business luncher should hand out free money to both.
While I do agree it would be nice if more companies produced more goods in the U.S., until consumers start voting with their pocketbooks by insisting on American made products nothing will change. If like most consumers, you insist on making your purchases based on price - that being what is the lowest priced, chances are you part of the problem and not the solution. Several years ago I made a conscious decision to purchase U.S. made products whenever possible, and if not available to select a low wage country produced good as the final option. While I own products made in Asia, such as the iPad I writing this response on, many of the products I buy are domestically produced. For example, the vast majority of my wardrobe is U.S. produced - dress and casual shoes made in New England, suits and dress shirts made in NY, jeans in LA, etc. I can tell you going this route reduces your buying options and significantly increases the spend, but at the end of the day I can at least feel good that I’m doing my part to keep jobs in this country; how about you?
With respect to Microsoft and all those complaining, remember they didn’t have to do it. Yes they get PR and tax breaks but so what the money still helps.
7
Yet another example of billionaires using their corporations' status as "citizens" to undercut and circumvent democracy. Instead of supporting "...a new tax in Seattle that would have made large businesses pay a per-employee tax to fund homeless services and the construction of affordable housing". The these "citizen" corporations then turn around and make themselves look magnanimous by donating millions to build housing that the government COULD have built had the tax passed. Here's a question that the reporters need to ask: How much did Amazon and Microsoft save by opposing or remaining silent about the Seattle tax?
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@WFGersen
Note that Microsoft could have easily been accused of hypocrisy or anti-competitive behavior if it had supported a tax that increased costs for competitive companies in Seattle, while it has little base in Seattle proper and thus wouldn't have paid the tax itself. They're doing a good thing. Let them be.
Amazon, on the other hand...
9
That is a very good question, but keep in mind that the Microsoft headquarter is located in the city of Redmond, not Seattle.
Microsoft is in a suburb of Seattle.
Homelessness is a very complicated issue. Several factors play into it which are pervasive and ongoing. Among others are the failure of mental health institutions to provide care for those in need, resulting in citizens being dumped into neighborhoods. The failure of public education to provide adequate social and intellectual tools for citizens to succeed in modern society. And most importantly, the unprecedented breakdown of family units generations ago, especially among minorities, that resulted in large numbers of offspring with no means of support except for inadequate government subsidies. These factors will require a major transformation in policy and thinking as to what role corporations and government should be to support its workers and citizens. In addition, individual accountability will need to take center stage as was the case when immigrants first migrated to the US after it’s independence.
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@Ev "the unprecedented breakdown of family units generations ago, especially among minorities" Uhm, isn't that what we called slavery? People ripping children out of the arms of their mothers isn't new. It's one of the things this country was built upon. Oh, right, it's complicated.
1
@Ev
Sure, all the things you mention contribute to more people on the streets. But in my opinion the driving factor is skyrocketing cost of living. The article said housing prices have doubled in the last 8 years. I'd say roughly the same here in Boise. If you're evicted from your home because the rent goes up too much, and every other place is just as expensive, you're homeless. No amount of mental health care or education is going to change that.
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@Tim Ernst
Yes, cost of living is a critical factor of affordability for any location.
Unfortunately, cost of living is a uncontrollable consequence of the free market capitalism system in which we live. The best defense ordinary citizens have is to be well educated, be aware and critical of government policies, and maintain strong familial and social relationships.
Given an individual's skill set, procuring a lucrative job opportunity is likely the only course a responsible citizen can take, whether we like it or not.
Back in the 1940’s and 50’s, stores in neighborhood strip retail business small businesses and corner markets had residential housing in the upper floors. How about the neighborhood small fast food outlets being designed and built with residential units integrated into the structures on a second story? This would certainly help these businesses to build a cadre of motivated quality staffing with low turnover!
4
@Louis A. Carliner
" How about the neighborhood small fast food outlets being designed and built with residential units integrated into the structures on a second story?"
Wow! The opportunity to live above a 24 hour McDonalds. Who would want to pass up such a delicious housing opportunity? /sarc
Article light. The devil or perhaps an angel is always in the details. The fact that Microsoft will invest implies they own it and seek a return on that investment. The level of ‘subsidy’ is not spelled out- so it could mean anything, couldn’t it ? While it may and probably should be construed as a plus for the city/region; it may to some degree be both self-serving to Microsoft and altruistic in nature. One must ask — why are they ‘investing’ in something apart from their core industry ? For the shareholders and management , it indicates investments in housing yield more than investments in software development etc.
13
Really. And when the next crash comes will they get bailed out as a "financial institution"? In 10 years will we have MS Bank, Walmart Bank, FB Bank?
@Ned
Many large manufacturers have more employees working in finance than on the factory floor.
What a step in the right direction!
But we need to ask, how many of these units will be reserved for the undocumented?
Think about it. A documented American even at minimum wage often makes 2/3 to 1/3 more than an undocumented migrant, just because of their documented privilege. Is this right? Don’t all humans have a right to affordable housing?
If all humans have a right to live here, then all humans should have a right to affordable housing, and if we’re not going to reserve a significant number of these units for the undocumented-disadvantaged, then we need to search our privilege and confront our racism until we do the right thing.
Cities are the preferred destination for many of the migrants seeking better lives here. They’re no different than the millions of documented who go to cities for the same opportunities, and our city sanctuary policies are the right thing to do. But this drives housing supply down, and rents up.
But the undocumented don’t always have the same skills at English, with banking, and with credit that the documented do. So it’s essential that we ensure affordable housing for them too!
2
Good, but why rely in the kindness of corporations to solve the housing crisis and,instead, reinstate a rigorous federal housing program? The federal government met the post-WWII housing crisis effectively (alas for whites only) and can do it again (this time for all).
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@Tom Miller Seattle and Washington State are wealthy enough to tackle this issue if the residents wanted to. It requires money and a relaxation of housing zone regulations. They don’t need the rest of the country’s assistance to make significant strides on affordable housing. Other states and localities with scarcer resources are not as lucky.
4
We could change our country if other companies started giving back to solve the problems they help create. One of the biggest contributor to what is wrong with the US is GREED.
If you have money, you can buy anything in America. We have a president proving everyday. What he and his family are doing, a lot of business leaders do every day too, it has become the way they "win".
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@Carol
I agree. Life in Mauritania is so much better. No problem with greed and money. Almost everybody is poor. High taxes on no income equals no revenue.
In my Midwestern suburban, but close to the city neighborhood, 6-story condo and apt buildings have been built in the last 5-8 years. Before that nothing exceeded 3-stories. The city generates more tax revenue and the formerly sleepy and failing commercial strip has come alive. There was much initial opposition to the lifting of height restrictions but things have worked out. It is absurd to keep building out housing 30-40 miles from the city when you can "build up" closer in. Even during busy parts of the day a trip downtown from my suburb by auto is normally about 10 minutes. If you want a big city, you need big city housing.
13
@Economy Biscuits
Liberals in the Bay Area and Seattle are too smart to build up. That would make too much sense. Better to discourage developers, that way the developers don’t get rich, which is apparently the role of government.
1
The effective spread of neoliberal philosophy across all levels of government has denuded communities of the sense of social contract since the end of the 1970’s. It is fitting that the corporate giants turn their attention to the quality of life for those who have been bumped aside, broadly define as the Middle Class. Neoliberals wanted government out of the way and got it. They now have an opportunity to show some ‘class’ and that is more than needed if we are to function as a society as remembered of times past.
1
This is a very positive move. As someone squeezed out of the DC market, I hope more companies and local politicians make similar moves
4
NYC gave Amazon tax breaks in the amount of $3 billion ÷ 25,000 jobs = $120,000 per job. This doesn't seem like a good deal, but I'm not smart enough to unpack what that means exactly. I have yet to read an analysis of how these kinds of deals affect the communities where they happen. More jobs are good, especially a mix of high paying and lower, support oriented jobs. How much of a positive or negative effect does that have on the tax revenue of the city and state?
3
Homelessness is increasing dramatically over the entire nation but especially where tech companies are based. As real estate prices have increased in these areas , basic affordability has disappeared. Look at San Francisco, Seattle, NYC , politicians are almost controlled by the tech industry. In Long Iskand City, in Queens, Amazon got 3 billion in tax incentives while NYC has record homelessness and record number of low income families that are struggling. The politicians are coerced to give these tax incentives to corporations run by billionaires. Bezos of Amazon was worth 140 billion yet they gave Amazon tax breaks. Bill Gates to escape taxation formed a foundation and with less tax revenue there are fewer services for the public causing record homelessness. Now a few crumbs are being spent. Simply place a one time tax of 40% in all existing foundations to build housing for low income families. Over one trillion would be raised and the majority of homelessness could be confronted.
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@Ralph Petrillo
You mean liberal politicians. And you mean homelessness appears where liberal politicians are in power.
5
@Shamrock
It is not just liberals. The family from Walmart is worth 200 billion and do not build low income housing. The system is set up to coddle the wealthy so somehow they maintain their wealth. Look st the wealthy real estate families in NYC with 200 buildings. How exactly do they keep them if the estate tax is 11 million. Trusts , estates . Foundations. The whole system is built to protect the wealthy who then throw out crumbs.
7
Yes, these foundations are nothing but tax shields that allow the super rich to pursue their hobbies. What gives him the right to eradicate childhood disease in Africa when that money should be properly parked during the government shutdown, like everyone else’s? Just because he’s wealthy, he gets to buy life-saving malaria nets instead of helping to fund over a trillion dollars in government pensions? So greedy.
2
Dear Amazon,
Where's your pledge? This is a great model for you. Your (second) huge postcard I received assured me that you're creating 25,000 jobs and that I should contact my local politicians and support you.
Turn Mr. Bezos' helicopter pad into 25,000 affordable residential pads for the working class residents who can't afford to live in Queens due to your impending Prime presence.
80
This is why I want to move from California to Washington or to Oregon. They appreciate what middle class workers really need--affordable housing; workable highways; interesting cultural opportunities. What's the point of spending billions of taxpayer dollars to save the coastline if only millionaires can afford to live in the beach houses? And what's the point of having a good job, if one has to commute 6 hours per day since affordable housing is so far away?
16
@Iris: you’re a little late Iris, even hours from anywhere on the coast you need a lot of money to buy a beach house, less certainly that California which is in such pathetic shape as to be attractive to only those from third world countries, but still not cheap. As for Portland it went from being according to Tyler Brule, a well respected authority on such matters the best city in the world to move to( a decade or more ago) to what it is today, a very expensive place with terrible weather and a huge homeless population. Yes it has all that supposed great stuff, some tech stuff, lots of of Chinese investors buying condos for their kids while attending Portland State, some good restaurants and food carts but the flip side is many of the former middle class find themselves priced out o& the market, many homeless, ruining even the once great downtown library than now serves as a homeless shelter and bathroomfor destitute folks during the day( the library is still open by the way , just not very pleasant), this requires the presence of a guard and frequent police visits. Sorry for the rant Iris but Oregon is no longer the Oregon of which you speak. This to me brings up the philosophical question of why is “ growth “ considered a good thing, necessity I guess, tech and off shoring have so devestated society that there is no alternative: subsequently there needs to be a radical transformation in corporate taxation to mitigate the misery caused by “ growth”, 90% is a good number.
6
@Ted BTW No cities in North America are on any lists of best places to live internationally, largely as a consequence of “ growth” that resulted in societal issues such as homelessness. Vancouver BC was the last one to vanish off that list largely due to the Colonization by wealthy Chinese that forced out everyone but the wealthiest Vancouverites. Vienna and various Scandanavian countries usually at or near the top, all places with very high taxes resulting in a very high quality of life for everyone( this will last until they are run over by immigration from wars in the Middle East)and helping to keep tech at bay as they aren’t interested in locating to places that don’t give them absurd tax breaks.
5
Not a single detail on what the money will actually build. The problem with directly subsidizing a particular thing—housing, food, whatever—is that the details really matter to actual people (even poor people!).
So when you spend money on a particular program, you create incredible inefficiencies and waste. Why not just a basic income for people so that they can afford food and housing. Pay for it with a cery substantial carbon tax, to discourage moving to even more remote suburbs. Finally, cities need to prohibit strip-mall style single-story build-out: all centers of commerce should have multi-floor mixed-use buildings.
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This is a welcome gesture not only for the financial commitment, but also for the example it sets for others in the business community. It is also a clear demonstration of enlightened self-interest. Companies like Microsoft depend on a steady, educated, engaged flow of people to keep it growing and innovating. A city where their employees can’t afford to live and where basic services are hard to come by because service providers can’t afford to live there will be a negative for recruiting the human capital they need to survive and prosper.
San Francisco is finally waking up to this problem, as shown by the passage of a tax recently to begin to fund solutions to their affordable housing crisis. It won’t solve the problem by itself, but it is a move in the right direction. Notably, many wealthy tech executives and companies opposed the tax, while offering little in the way of alternative ideas. At some point, businesses need to understand that as they get larger, they contribute to a city not only jobs and economic benefits but also challenges like the need for affordable housing, traffic and parking congestion, mass transit issues, public education demands and overall strain on public services. It is irresponsible for tech to gripe about the problems they helped create while claiming to have no responsibility to help address them. These companies like talking about sustainability and ethics but need to step up and demonstrate both to help solve this problem.
17
Are the suburban areas going to permit 70 story buildings of apartments and condos?If not, then I’m not sure the local government really has a commitment to allow construction of affordable housing. There is only one reason anybody builds a tall building, to maximize profit. They build to create more revenue per acre. I’ve been to Silicon Valley where they don’t build tall condos and apartments. That’s why housing is so expensive. Can you imagine how expensive it would be to live in Manhattan if no apartment building was more than 2 stories? Why were the Robert Taylor Homes in Chicago so tall? Anybody?
36
@Shamrock
They are building a lot of very tall apartments in Seattle.
3
@Carol "A lot" is very relative. Apparently it is not a lot in relation to actual demand, because they are still missing about 150,000 housing units.
"Saltaire is a Victorian model village located in Shipley, part of the City of Bradford Metropolitan District, in West Yorkshire, England. The Victorian era Salt's Mill and associated residential district located by the River Aire and Leeds and Liverpool Canal is a designated UNESCO World Heritage Site and an Anchor Point of the European Route of Industrial Heritage....
"Saltaire was built in 1851 by Sir Titus Salt, a leading industrialist in the Yorkshire woollen industry. The name of the village is a combination of the founder's surname and the name of the river. Salt moved his business (five separate mills) from Bradford to this site near Shipley to arrange his workers and to site his large textile mill by the Leeds and Liverpool Canal and the railway. Salt employed the local architects Francis Lockwood and Richard Mawson.
"Similar, but considerably smaller, projects had also been started around the same time by Edward Akroyd at Copley and by Henry Ripley at Ripley Ville. The cotton mill village of New Lanark, which is also a World Heritage site, was founded by David Dale in 1786...."
https://en.wikipedia.org/wiki/Saltaire