Companies Step Up in 2019 to Tackle Housing Affordability Crisis
The U.S. is mired in a housing affordability crisis, where hardworking American families already reeling from stagnant wages and climbing costs of living are being squeezed by skyrocketing housing prices. A brief scan of daily media headlines from across the nation can paint a grim picture, leaving the impression that there’s little good news on the housing front. But this week, Apple made a massive splash by committing $2.5 billion to help alleviate the crisis in California, showing that big corporations have a role to play in solving this national problem by investing in the communities in which they operate.
While Big Tech has defined economic success for many regions in recent years, it’s undeniable that the influx of young, educated, high-earning tech employees chasing jobs in Silicon Valley and beyond has exacerbated housing supply shortages. In areas that are “hot” to live in – where tech giants have decided to set up shop – job growth has outpaced housing construction, leading to an unsustainable surge in housing prices. But Apple and others aren’t simply washing their hands clean of the crisis. They’re engaging in meaningful public-private partnerships and injecting private investment – to provide some much-needed relief for its employees and communities.
As we approach the end of 2019, let’s take a look back at some big companies that made sizable commitments this year to help tackle the housing affordability crisis:
At the very beginning of the year, Microsoft laid the gauntlet down, pledging $500 million over three years toward developing affordable housing and addressing homelessness in the Puget Sound region.
Kaiser Permanente established a $200 million fund to address housing stability and homelessness in the Bay Area, with a $5.2 million contribution that helped a local nonprofit buy an apartment building and keep it affordable for tenants.
Over the summer, Wells Fargo pledged to spend $1 billion in support of affordable housing initiatives.
Amazon donated $8 million to fight homelessness in the two cities in which its headquarters are located, Seattle and Arlington, VA, which builds on Jeff and MacKenzie Bezos’ launch last year of a $2 billion fund committed to assist the homeless.
Google also announced a $1 billion investment to ease the Bay Area’s housing crisis with plans to work with local governments and developers to repurpose $750 million of land it owns for housing and establishing an affordable housing investment fund.
Last month, Facebook launched a $1 billion initiative that aims to create 20,000 new housing units over the next decade, with $250 million going toward a private-public partnership with the state of California that will provide state-owned land to developers at negligible cost.
And as mentioned up top, Apple committed $2.5 billion – including $300 million worth of land it owns – for affordable housing development, $1 billion in an affordable housing investment fund and $1 billion to help first-time buyers secure mortgages.
All told, that’s over $8 billion earmarked by these companies to address housing affordability, largely focused on increasing the supply of housing to drive costs down. It’s not a silver bullet – there are no silver bullets when it comes to solving the affordability challenge. But it’s hard to argue that these companies aren’t trying to make a difference. Presidential candidate Bernie Sanders, who never passes on a chance to whack corporations, insists these billions of dollars aren’t enough. But these companies are taking proactive steps to contribute to solving the problem. Unfortunately, when states like California pursue Sanders-style rent control that inevitably puts a chill on investment and development, these efforts will have a limited impact.
In truth, this injection of dollars won’t solve the problem on its own. It’s just one element of a successful all-of-the-above strategy. The real solutions lie in giving relief to families that need it in the form of rent subsidies and tax credits, commonsense zoning reforms that prioritize the construction of a variety of types of housing and incentivizing construction on the local level to allow supply to catch up with demand. Every tool that encourages investment and construction of the new housing these regions desperately need should be used, including the kind of investment big corporations are pursuing. Families struggling to keep up with the cost of housing where these companies are investing will surely be thankful for the help.