Microsoft pledges $500M for affordable housing in Seattle area
nytimes.com
nytimes.com
This isn't the first time Microsoft has put its money where its mouth is for its community. They've done a lot for transit in the region, too.
I don't mind so much that they are studiously avoiding the region's most populated city. Not all of the affordable housing and public services needs to be concentrated solely in Seattle. The rest of the region should have these things, from mental health services to public health facilities to shelters to affordable housing. Concentrating them in Pioneer Square around the Union Gospel Ministry isn't the way to go.
But of course, like I said, they should still help solve the problem monetarily.
I'm not in principle against low income people living on the Eastside. In fact, I think most of Bellevue, Kirkland, and the area surrounding the Bel-Red corridor should be upzoned and get more infrastructure - then low income people could actually live there
Eastside cities’ residents want a certain degree of density, safety, cleanliness, etc. They also want to avoid losing the ability to have fast point-to-point on-demand transportation (i.e. driving private cars on roads that aren’t overcrowded), which enables them to live better lives by being able to quickly zip between work/schools/activities at a moment’s notice without dealing with the waiting times and schedules of mass transit.
That’s the lifestyle they have now and the lifestyle they want to sustain. I don’t think that should be demonized - people have different wants and needs, especially if they are raising children.
They also aren’t obligated to make their locale affordable to those who want to move there. After all, we are talking about one of the most desirable places to live, and it shouldn’t be a surprise that it is expensive as a result. Why should that necessitate a slide towards heavy urbanization? I realize some people prefer that denser life and might benefit from it (particularly if they are new transplants) but it’s not for everyone and I don’t think a community is obligated to make accommodations just because others now want to live in a particular location at a price point that makes sense for them. America has many places to live, and jobs are more available than they have ever been historically.
Lastly, cities surrounding Seattle also aren’t obligated to absorb the large homeless population Seattle has, which let’s face it, is enabled by lax enforcement of laws. A lot has been written (and is plainly observable) about the permanently homeless in Seattle who refuse all services and drug dealers operating out of roving RVs. For example take the recently swept Northgate homeless camp - an article I read stated that just one of that massive cluster of campers accepted services from the Seattle navigation team. And recently a lady was pricked by a needle at Northgate mall, not far from this camp. Is it really surprising that people in the Eastside don’t want to welcome the same squalor into their neighborhoods?
Legal or not (and it is becoming less legal in places like California), it's a shitty thing to do.
I'll also get this out of the way: yes, lots of us in Seattle are well and truly tired of the unsanctioned camps at places like Northgate and the RVs parked everywhere. What we're NOT willing to do, at least not yet, is to slam those people with more arrests and more trips through the criminal enforcement system prior to having services in place that will cover a high percentage of needs. (No, our existing shelter system, whether within Seattle or without in the suburbs, does not meet this requirement.) That's mostly humanity but also because the Court of Appeals for the Ninth Circuit says that it is unconstitutional to run someone off from a place to sleep if there are no alternatives and "you must be stone-cold sober in order to enter this shelter" doesn't work for people who are addicted. (That's one reason why the region needs places like needle exchanges and substance abuse centers. Why shouldn't we concentrate them all in Pioneer Square? Well, for one, because the "junkie homeless" are already in places like Bellevue, sleeping out of their cars and scrounging for food, but they camouflage it better.)
Now, as to my original rebuttal. There's a huge need for missing-middle housing in this region. You know, for the people that serve your coffee, deliver your groceries, educate your kids, clean your parks, and paint the lines on those untrammeled roads. The people making well under six figures who shouldn't have to drive for two hours or live beyond the reach of public transit just to get to a job where someone making five times their salary can look down on them for not living in a "good place." That's the kind of housing Microsoft proposes to kick into gear here.
We need all kinds of these services because it's humane and it's fiscally and economically prudent to not sprawl all the way from Bremerton to the Tri-Cities.
I think most of us don't want this to become a place where normal, non-insanely rich people can live.
For whatever inaction the typical eastsider(sorry, I love you all) are commited to, its great that someone, even Microsoft is doing Something.
Actually the working title of the next one is Max Max the Wasteland.
But it might not get made anytime soon.
Frankly, you just sound uninformed here.
Look at the Northgate encampment — 100% were offered services, 90% rejected them to remain dangerous vagrants spreading disease.
Until you accept that a component here is willful vagrancy and criminality, the problem will get worse.
No amount of money can fix your denial of the problem, and your position isn’t one of compassion — it’s an abdication of any responsibility: in blindly throwing money while abandoning the rule of law, you’re not helping the vagrants, you’re not helping the non-vagrant homeless the vagrants prey on, and you’re not helping the regular citizens that are getting assaulted or stuck with needles (such as that lady at a Northgate).
You’re the problem.
I want you to answer me honestly: when I was homeless, did I deserve to be assaulted by other homeless people while the police refused to do anything because you personally feel bad a vagrant might get arrested?
That’s the system you’re advocating for.
And it’s the definition of immoral baizuo policy.
LA has the same problem -- for a lot of the homeless, it's a wilful choice to remain on the streets.
You left out the part where y'all scream and cry nonstop about the 520 tolls, toss massive amounts of cash at fighting the potential I-90 tolls, hold up and stall mass transit (mostly via the massive stacks of cash mentioned previously) that could _potentially_ travel over these routes and bring "bad" people to your utopias, oh – and also want to host an NBA team.
You don't get both. The eastside wants all of the perks of being a large(r) city, with none of the less desirable components. Meanwhile, you travel over the bridges you attempt to regulate so heavily, into our city, to collect your paychecks and claim the name 'Seattle' (because nobody knows the name of your city) and then spend your evenings writing nonsense like this.
The eastside is trash.
Doesn’t everyone? Who actually wants the less desirable components?
So it's making the wealthy pay the price for the zoning policies and real-estate speculation they created.
This seems to be a major part about why many people who are advocates for the poor have an issue with new construction - because it results in displacement of people who can't afford it
LA has the same problem with its attempts to "solve" its homelessness problems, which are at their root zoning problems: http://seliger.com/2017/08/30/l-digs-hole-slowly-economics-f...
A significant number of the homeless in LA (by some estimates as many as half) choose homelessness over shelter because almost all shelters in LA have sobriety requirements (meaning no drugs or alcohol).
There are hundreds of shelter beds in LA that stay empty each night because the homeless who would occupy those beds would rather pass out on the street to their drug of choice.
I also don't think that is the only issue with shelter usage. In Denver, a common complaint I hear is that they choose the street over the shelter because they feel both their physical safety and their personal belongings are more secure on the street. I also try to think about this from my own perspective and if I was in that situation, I'd rather find a "place of my own" on the street over a shelter shared by tons of people (unless it was really cold out).
I don't understand why people want corporations to behave like non-profits. It's a corporation whose sole aim is make profit. But that doesn't mean they can't do something for goodwill that actually benefits the community.
> In the case of their Linux support it's death by a thousand paper cuts.
What does this have anything to do with them doing something good for the community?
Because people act like they're altruistic and nice when the reality is that they're not. I'm not gonna suck your dick because you pulled a PR stunt, I don't swing that way.
>What does this have anything to do with them doing something good for the community?
On the surface level more support for linux is good thing, but like all corporate-developed software it eventually becomes bloated and unstable and dies a slow death.
Your Linux comment seems unrelated.
I'm not sure if road expansion is voted down or some other issue, but I'm glad there's no growth until then, as there are some pretty terrible traffic conditions in the area.
I am personally not in favor of more density here because my lifestyle, and those of many I know, is better suited to the lower density we have on the east side. The balance we have now is one of the main reasons many of us choose to live here, in the PNW. It feels to me like this growth will be good for new transplants at the cost of those who have made a life here already.
You're absolutely right! That's a very real set of problems and a very desirable set of goals you've correctly and wisely identified.
With that said, is this something that companies are best positioned to address? Do we think Microsoft, Google, Amazon, and Facebook will do the best job possible at building out the smaller, more affordable towns to achieve your laudable goal of increased opportunity and geographic diversity? Could it be possible that there might be other structures, already in place, better able to address this problem? Perhaps in ways that are already designed to be democratic and participatory? Do we want corporate behemoths pushing Seattlization on whichever smaller, more affordable location they choose?
Again, you've rightly and wisely identified both very real problems and very real solutions. There just might be some room for nuance around implementation.
Trying to keep a city or town "preserved" is impossible.
"Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region...the remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction."
Here's the projected impact (also somewhat vague).
"The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”
Here's the need: "Seattle region needs 156,000 more affordable housing units [today].and will need 88,000 more by 2040 if the region’s growth continues."
I wish the problem was being solved the way I think it should be solved, but I'm still happy it's being addressed. "Don't look a gift horse in the mouth" applies; we should encourage good behavior rather than taking the chance to be mildly upset about incentives and taxation and all the other angles from which one can be mildly disconcerted by the situation surrounding the action. I'm lacking an idiom here, but I feel like what I want is something like "snatching defeat from the jaws of victory" but for mild disappointment and good news, instead.
I got lost in the middle here -- does more taxes being paid to the state of Washington directly contribute to more affordable housing being built in Seattle?
The closest thing I could find was this: https://www.commerce.wa.gov/building-infrastructure/housing/...
Nice strawman! You're a bit off, though. My wish is for the state to create an income tax. I think it's absurd that we have such a regressive tax structure in this state.
That doesn't encourage anyone to put down roots. That's not healthy for the area. If taxation really is your primary concern, then I hope you choose to leave and move to Wyoming at some point.
Taxes are distributed at the government's discretion so it may not necessarily combat the issue at hand.
I'm not anti-tax, but I do realize tax money is often misused or poorly used, or simply used for things other than what we'd hoped it would be used for, and I don't see that being avoided here
https://www.businessinsider.com/microsoft-employees-income-t...
Exactly. Why put our eggs in MSFT's basket?
And then once constructed, there would be forces wholly removed from the natural demands of the population, as represented immediately by the encompassing markets, determining how the housing is to evolve over time.
People should be much more reserved than they are in terms of handing things over to the state, there is much to be lost.
That is not true. California has a budget surplus right now...
It’s not a poll. One is expected to answer “bad, because...”, as you did.
I think in places like SF or Seattle it’s a combination of government regulation and zoning rules, and idle capital. But at the same time I don’t see why government itself can’t invest in building things like transportation infrastructure to support the increased density (assuming density is something we want - I’m not entirely convinced it is).
Over the last few decades the default state appears to have been “build up” rather than “build up where needed, and out where you can”. Cities from previous iterations of civilization appear to have done the latter, while we mostly just do the former here in the states (over recent decades). LA could maybe be considered an exception, however it’s zoning rules are draconian and density seems to be the way forward less some major overhaul.
The problem is that these things take time, mostly because this isn’t China and Seattle doesn’t have hundreds of billions in Treasuries to do what it wants, nor is it willing to conspire using shady financial vehicles like Chinese local governments.
And governments are absolutely incentivized by opportunity. The prosperity of the people is their entire job. Its why you have a state to begin with. If its unable to fulfill that objective, get a new government.
The proper use of the state should really only be as a reluctant override meant to address explicit market failures, such as monopolies and collusion and negative externalities. Unfortunately, that isn't the way that most people view the role of government anymore, and are increasingly content to see it as a consequence-free button for moral authoritarianism.
Do you have concrete examples? Everything I can think of points to the opposite.
But closer to the topic, look at the government housing programs. Billions of dollars to build housing projects that do effectively nothing to lower the overall market price of housing, while creating slums by concentrating poverty in specific locations, while actively making the actual problem worse with zoning rules.
Because they outsource to a bunch of private contractors, no?
No. The government contracting process is as broken as anything else, but hurry up and wait, FUBAR and SNAFU did not originate at Lockheed Martin. We don't have major military bases in states with powerful legislators because that's what makes the most strategic sense from a military perspective. The VA healthcare system is not a disorganized mess primarily as a result of contractors.
It's a systemic issue with any large bureaucracy, which is why small and local governments are more efficient than large and centralized ones. It's also why small and medium businesses are more efficient than huge conglomerates.
And there is no bureaucracy larger than the US government. People like to compare their cash on hand with Apple's, but governments don't hoard cash like corporations do (and corporations only do it because of dumb tax policies). The US federal budget is around six times Apple's market cap, much less their own annual budget.
But it is a good thing that someone is solving the problem.
See https://www.econlib.org/archives/2016/05/multinationals.html for a comparison of multinationals' management to local companies. I don't have stats for local government on hand, but anecdotally, it's common for it to be even worse than local companies.
No apartments, no affordable housing.
Perhaps increasing supply by developing tech or fighting regulations will be better way to spend money
It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.
Microsoft are increasing the supply of affordable housing by literally paying to build affordable housing. That increase in supply might lower prices, or it might just attract more people to the area and raise demand as well. Either way it makes the area better for Microsoft and its employees.
Eg, a city might have plenty of large detached houses, and expensive high-rise residential buildings but not enough of the more affordable type of buildings like "low rise" developments of 60-100sqm flats.
For analogy, imagine a world with plenty of iphones, but not enough cheap androids. A €200 phone is a decent phone, affordable and €200 is a viable price for the OEM. Subsidies aren't required. For phones, these market conditions guarantee that the supply will be sufficient. In real estate, they don't.
Markets like this will tend to show really price/sqm at the lower end, relative to the higher. Eg a fancy, 250sqm house costs just 2x of an old 65sqm flat even though land and building costs are the same per sqm.
Tacoma has an average home price of $350k. That means, to afford an average home/condo/apartment, you'd need over a $100k+ salary per year. (Using the 28/36 rule). But the average income per person in Tacoma is ~$37k/yr.
That is absolutely a crisis-level problem of massive proportions.
The only way anyone can pretend those prices are even vaguely reasonable, is by comparing it to somewhere like Seattle where the crisis is so much worse.
From that article:
- $225M of the $475M will be loans below market interest rates, directed at middle-income housing.
- The remaining $250M of the $475M will be loans at market interest rates, directed at low-income housing.
Other than optics, I'm not sure what the point of the $250M in market-rate loans is. I'd think that the main constraint on the development of low-income housing is that it's unprofitable, not that it's difficult to secure financing.
> Inasmuch as it means that those working in the construction trades are better off, construction wage growth in the expensive coastal cities is a welcome development, which ought to be celebrated.
> However, construction wage growth could also be part of a dangerous, self-reinforcing cycle. Rising construction costs tend to reduce the supply of new housing because they shift marginally-worthwhile residential development into the red.8 This helps raise housing costs, which in turn feeds back into construction wage growth for at least three reasons:
> - When housing prices rise, workers require greater compensation to subsist.
> -When housing prices rise and the supply of homes is smaller than it would be otherwise, it is harder for people to find suitable homes for sale (and to afford them). This creates a greater incentive for renovation, which exerts upward pressure on labor costs as suggested earlier.
> -When housing prices rise, the pool of potential home buyers becomes more financially select, which likely corresponds to higher expectations with respect to homes’ level of finish.9 Once again, this means that more renovation is bound to take place (including home-flipping), exerting even more upward pressure on labor costs.
A one-off influx of affordable housing could potentially break that cycle by enabling tradespeople to move to the area. I'm not sure that Microsoft's investment is significant enough to have that effect given the existing deficit in affordable housing in the Seattle area, but the theory's there.
[0] https://www.buildzoom.com/blog/whats-up-with-construction-co...
I'm not in favour of the former, I prefer the latter, but I could believe its a conversation about "how" and "what works"
Housing is so short and expensive anywhere near Microsoft HQ that it's a significant factor in hiring. I'm a bit surprised that such corporations don't build dormitories near their campuses suitable for interns and singles.
Buy/build houses and sell to eligible buyers for less than market? Rent at less than market? How does eligibility work?
Is arbitrage a problem?
Renting out but giving a more discounted rate the poorer the tenant is probably the only sustainable approach to keep them having a home as living costs just keep rising. Of course, the discount should gradually dissolve as the tenants get better paid jobs to avoid someone moving in poor and keeping the same flat after ten years of career development. Getting raises or better paying jobs would pay off but rent would just eat a bigger portion of the monthly costs until they would be on par with market rates.
They 'funding /financing buildings, maybe at lower rates than banks, but then MSFT has so much that a lot of it must be making close to 0%. So they solve a problem of theirs since MSFT is there for the long term, get excellent press with virtually no risk. If they default, MSFT might end up as building owners. Hire someone to manage and sell them when time is right. Maybe lose some on taxes and management fees but that is nothing, relatively speaking.
Like an apartment complex can be required to build parking,
tech companies should be forced to provide at least xx% of housing for employees. Just as they bought the land for offices, let them buy land for apartments. Cost of doing bidness :)
First off, all but $25 of the $500M will be loaned out to developers at below-market interest rates and the other $25 will be donated to related services. Good on Microsoft for committing capital that could be put to other uses, but this isn't a donation; it's philanthropic lending. Depending on the interest rates of these loans, they'll wind up keeping much of that principle. Yes, people will surely benefit from this, but this looks really conservative for such a headline.
Corporate taxation is a hot-button issue these days, but one can't help but notice how easy it is to shun government for being wasteful in providing housing services while private industry is being applauded to essentially buy the process of welfare. And while there are heated debates about what major companies should contribute (or avoid contributing) in taxes, can we even agree that affordable housing sponsored by private money is a little contradictory here?
But we need those investments, somehow, and I'm willing to let private businesses make them while we also have the public debate over getting our governments to get moving.
Frankly, given the amount of money each of the big tech companies are sitting upon, they should all be branching out into banking. Maybe charitable loans are a way of doing this without actually going through the hoops of becoming a bank.
This is true of all charitable giving. They still make less money than if they invested their money at market rates. I don’t see why every good act requires a negative knee-jerk reaction.
it isn't as though you go on dates and enumerate your moral failings.
Something I always find really interesting, as a San Francisco resident, is that people seem to think that the market is incapable of resolving the problem of the purported loss of low-skilled workers to act as the baristas, servers, deliveries, etc, because rising cost of living drives those people out. But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city. Now, maybe this is yet an alternative to the more straightforward equilibrium, wherein some of the employers in the city begin to provide lower-skilled workers with housing for the benefit of their own workforce.
I have no idea what Microsoft's motivation for doing this is, but it would be an interesting possibility.
I am not making a case against affordable aviation, but rather giving an example of the fact that many aspects of society is simply not directly-profitable but necessary for a healthy economy and community.
In an economic fairy tale, sure.
In reality, what happens is that people working low-income jobs end up with a two and a half hour commute from half-the-state-away, or, alternatively, living in a slumlord's idea of a barracks. Or, sometimes, both.
It's a 'solution' much in the same way that in the Soviet Union, people would 'solve' the problem of toilet paper shortages by joining the Communist party, which would entitle them a subscription to Pravda.
The wealthiest country in the world can, and should do better.
Edit: meant to say “foreign countries”, but the point is the same.
For example, it's not as though the occupants of SF are going to be satisfied living in a city without access to bars and restaurants, no matter how wealthy they are. There are bars and restaurants in SF as it stands, are their staffs all living in subsidized affordable housing? No. For one, they simply get paid more than outside of the city, because things cost more. They get larger tips because people make more money, and have larger bills to tip on. While some might be subsidized with rent control, others live with roommates, or they live outside of the city. There are any number of circumstances they find themselves in, but the point is that it is worth it to them to be able to work in the city. If it was not, they would not work here. And if they did not work here, their wages would go up in order to fill the demand. And let's take this even further. What if their wages go up so high that the drinks and food begin to cost a very undesirably high amount to the residents? Well then, that begins to affect the desirability of living in the city. Suddenly less people want to live here, because the cost of living is so high. And when less people are competing to live here, rent starts to go down, and so do wages, and prices. The entirety of the system is in stabilizing flux as a consequence of this.
If we're actually arriving at situations where people are making a two and half hour commute as a consequence of them having no alternative options (which is not the same as them making the commute because of better opportunities), then we agree that we're no longer dealing with a viable model. I used to do a 1.5 hour commute each way, every day, for over a year, because it was worth it to me to live in that particular area rather than being closer to my work. If what you're suggesting is that their only options are effectively capable of exploiting them due to no alternatives, you're effectively describing an overall employment crisis. Given a system-wide lack of employment opportunities, which is certainly not the reality we currently find ourselves in, then we surely agree that there is an appropriate role for the state to fulfill in mitigating the situation. But that still doesn't mean that we agree that affordable housing is the correct mechanism for addressing this problem, which we surely do not.
> The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.
https://www.seattletimes.com/seattle-news/homeless/microsoft...
The key is zoning and it sounds like they have some local buy-in from politicians (see the attached statement of mayors in that article). I'm skeptical that happens, NIMBYs have a way of stalling up zoning, but it's a still a step in the right direction.
A sub-prime mortgage is made at market rate--at an unaffordably high rate as a result of the risk. These are below-market rate loans -- loans at affordable rates for the borrower in spite of the risk. The in-spite part is what makes this philanthropic.
The reason I mention this is because I think you need to consider motivations when determining which system is more desirable. What is Microsoft's motivation? It's not the short term gain of capital, since they could earn more elsewhere. And it's also unlikely to be an extremely long term purpose, since those aren't the sort of ideas shareholders often look too kindly upon. I think it's probably similar to what somebody else mentioned. They want to ensure there is a stable supply of low-skill low-earning employees that can provide affordable labor for local companies (including Microsoft) and for their employees. And they're looking at achieving this in the not so distant future.
I find this motivation much more desirable, since sustainability and progress is key. In politics there are many people will keep voting for parties that they perceive as giving them things, even when there is no tangible progress being made decade after decade. Because of this, progress becomes secondary to the act of being perceived as giving ostensibly towards achieving progress, especially as politicians are giving people things with other peoples' money. But for a company, success is going to be quantified in ways where progress is all that matters. If this affordable housing is ineffective, worsens the social situation in the city, or whatever else - then they will have effectively wasted half a billion dollars of their own money. They have a major incentive to make sure this works.
The short version of this is that I definitely don't see affordable housing being sponsored by private interests as being contradictory. On the contrary I'd expect to see far better outcomes from the private than public sector on issues like this when there is a significant private industry benefit to be had from affordable housing.
[1] - https://www.snopes.com/fact-check/lbj-voting-democratic/
"And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable."
So, 85% of the housing created is too expensive to be purchased? Sounds like a pretty poor business model. ;)