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Microsoft Will Spend $500M To Address Affordable Housing and Homelessness in the Seattle Region (geekwire.com)
Microsoft is dedicating $500 million to fund construction of affordable homes and homeless services in the Seattle region in an effort to alleviate a growing housing crisis driven by the city's tech boom. From a report: The Redmond, Wash.-based tech giant will commit $475 million for loans to affordable housing developers over three years and another $25 million to services for low-income and homeless residents. It's the largest philanthropic pledge in Microsoft's history. "This is a big problem," Microsoft President Brad Smith and Chief Financial Officer Amy Hood wrote in a blog post Wednesday. "And it's a problem that is continuing to get worse. It requires a multifaceted and sustained effort by the entire region to solve. At Microsoft, we're committed to doing our part to help kick-start new solutions to this crisis." Microsoft's announcement comes amid growing pressure on tech companies to mitigate the consequences of growth. Over the past decade, big tech companies have drawn thousands of newcomers to the Seattle tech region with lucrative tech jobs, bidding up housing costs and often squeezing out low-income neighbors.
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I'm not sure I'd be thrilled about that if I were a shareholder.
Can't get more philanthropic than a loan!
Like most Windows 10 installs=
Why did the chicken cross the road? Because Elon Musk put an AI chip in its head.
As they drive engineer salaries down, they have to do something. So now when they offer shit pay, they can point to the Microsoft Affordable Housing where the servants can live - I mean engineers and other workers.
These last couple of decades has given me a taste of what it was like during the USA's Gilded Age in the late 19th and early 20th centuries.
And how will these houses be sold? On the open market? Oh, that will keep them affordable. Just look at Victoria, B.C.
Otherwise, people will still flock to places they view as being desirable to live in. There is no market answer here, especially from the tech industry who preached how people would be able to work anywhere from anywhere and yet they still build huge centralized gulag campuses. And no matter how wretched it gets paying $1k for a cot in a hallway and commuting 4 hrs a day local governments will still play the sunny movie because they're addicted to tax dollars. The political game demands fuel for the charade.
This is not a charitable donation, it is an investment, a loan for affordable housing. Smart investment considers intangible benefits from the obvious 'good publicity' from corporate responsibility to increasing their own value by increasing the value of the environs. It is not a bad thing, but let's see this for what it is, a smart business move.
Local governments control housing, and local governments are often full of people that refuse to build new housing.
Low supply of housing pushes prices up.
High housing price is a primary cause of homelessness.
Microsoft must somehow convince a bunch of NIMBYs to build housing, which they probably cannot do.
We do know, however, what does not work:
Rent control.
Government built housing.
Rent subsidies.
None of these properly to address the root cause of low housing supply. (Government built housing attempts to, but history has shown that this never leads to good outcomes. Ask minorities what they think of the projects.)
You must build more housing. End of story.
1. The interest rates on the loans are below market, to the point that they will probably just barely make their money back if the loans are paid, depending on inflation
2. They are making loans to begin with - sometimes banks won't give out loans to develop low income housing as it's risky
My Other Computer Is A Data General Nova III.
Every time this has been done it only attracts more. Good intentions sure, but not solving the root of the problem.
Actual fix: Increase public transportation costs steadily until they move to a city that matches their skill set and cost of living.
They should spend that instead trying to make Windows 10 not suck so hard. They probably need this amount just to pay HR to fire all of the failures that are ruining Windows with UWP, S mode, and Cortana garbage.
We have about 250,000 people, and $500 million is about 500 houses here.
Um.
That's not a lot.
-- Tigger warning: This post may contain tiggers! --
Hire indian programmers, get indian software.
The problem is a lack of supply across the entire market.
The solution is to add supply, and thus build a few skyscrapers that are not just for the poor, but also the middle class. The added supply will lower the prices in the area, having a better overall effect.
Will the availability of a low interest loan increase the amount that a lower income person can potentially afford, thus raising the selling price of the property and in turn raising the price of all other similar properties. So then you'll only be able to afford these properties if you can obtain the low interest Microsoft loan? Similar to when we give free rice to third world countries. Our intention is to prevent hunger, but the effect is that local farmers are pushed out of business because they can't compete with free and then they become more dependent on handouts. Or maybe the loans are just a tiny drop in the bucket and won't have a lot of impact on the market, just be the equivalent of hitting the lottery if you qualify.
Pearl Jam played two home shows last year and donated the $ to help homelessness in Seattle.
They are experts if you need a place to crash.
It's the same problem that's plaguing student loans. When you subsidize demand, the average price goes up. That's led to school tuitions spiraling up out of control. If you want to lower prices, you need to subsidize supply. Instead of building additional homes and giving them to people at below-market prices (which has the same effect on market prices as handing those people money), build additional homes and just flood the market with them.
and they use drugs and alcohol to cope. There's been several long term successes with halfway houses that allow drugs and alcohol while constantly offering mental health services, but teetotalers and religious zealots often want nothing of it.
And besides, it's not hard to run a shelter for the occasional poor person kicked out of their apartment. The real challenge for a just society are those people who aren't just a bit down on their luck but who never had any luck to begin with. But it's just as easy to blame them for their illnesses. A hundred years ago I might have given you a pass on that, but it's 2019. Sure, we can't cure their illnesses, but we at least know it's not demons and we know the solution to their problems isn't to ignore them and hope they just go away and stop begging for change...
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So they're going to give cheap loans to corporate developers to build more ghetto housing that will be paid for with tax dollars.
Developers make BILLIONS on the Section 8 formulas... As long as you build housing with cheap enough materials, it is extremely lucrative to rent out under Section 8 and become a slum lord.
Meanwhile our low income population gets to live in substandard housing that falls apart at the seams with landlords that don't do squat about it.
Thanks, Microsoft, for helping to perpetuate the oppression of the working class.
Then "philanthropic" loans like this to the state of Washington would be less necessary. I think it's hilarious when corporations work out complicated schemes to avoid 90% of the taxes they should be owed, and then they come up with some idea to make charitable contributions which still only add up to a small fraction of the taxes they should be paying. Then they hold up these charitable contributions to make themselves look like heroes.
How often have you seen projects of this type come along, then the nearby residents, wealthy or otherwise, decry the proposal? They head to the city council meeting and petition to have the property rezoned to single-building, single-family. "NIMBY! My House's Value! Increase in neighborhood crime!"
Developers over the past 15-20y have expressed little interest in building "affordable" housing. The profit margins are just that much higher for McMansions in new or wealthy neighborhoods.
Short of the government (not MSFT) contracting specific affordable housing projects (that will come in over-budget and under-quality), the status quo will remain.
"The quality of life is determined by its activites."--Aristotle
Even should it work as you describe, aren't the original buyers going to take the best offer? Which, in turn, is unlikely to be from a person who can afford less-than-$x00,000. Also, the tax bills on those houses will rise with the market, not income, and certainly not low-income income.
Assuming they finance it with cash, they're carrying nearly $12B (https://www.nasdaq.com/symbol/msft/financials?query=balance-sheet). Plus, I'd lay odds it's a tax writeoff. Seems a prudent investment, assuming your future employees want to buy homes at some point.
ceci n'est pas un sig.
Let's scale this down to everyday life.
A man with $130 in his pocket and $300 shoes walks past a woman holding a sign that reads "Homeless ... please help". He reaches into his pocket, puts 2 quarters into her plastic cup, then says "I'll back this way in 3 days, you can pay me back then."
.
.
.
(It was recently reported that MS has over $130B in cash.)
"You must try to forget all you have learned. You must begin to dream." -- Sherwood Anderson
The problem isn't simply that houses cost too much, it's that there's not enough property available for sale. Simply giving out loans to help people buy property doesn't fix the underlying problem that there are not enough HOMES for sale.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
My (large Fortune 500) company also puts a lot of money into its community. If your community isn't a desirable place to live, then you'll have trouble attracting talent. In particular, my company is focused on giving to arts and education. I guess the thinking is that if there's entertainment and solid schools it'll make the place desirable for families.
Just a PR stunt and it worked spectacularly. The local paper (and therefore the news services) didn't mention LOAN at all.
so that Gates can't see the homeless encampments from his mansion. Mission accomplished.
No, no, that's just money down a rat-hole.
They gave up on Edge to the superior, open source Chromium. In time, they'll finally have to give up on Windows to the superior, open source Linux.
Microsoft must LOVE homelessness a whole lot to spend so much money on it. The law of perverse consequences suggests this expenditure will vastly increase the homeless problem in Washington. If you are willing to pay for something free markets will cough up somebody, or many people, willing to accept what you will pay.
{o.o}
While this is a nice gesture, Microsoft's $500M is merely a band-aid to a larger problem. As long as there is greater and greater income inequality, the "free" markets will dictate that housing prices will increase so long as there is demand at the top. Lower-income, mainly service, workers will continue to be screwed.
The real fix would come from progressive income and corporate taxation, much higher minimum wage, and much more regulation on companies of all sizes in how they treat their workers (benefits, wages, part-time work, executive greed, etc.).
Your theory assumes that there is zero population growth. If jobs are attracting people to the area, or the population is growing for other reasons, then that offsets the increased supply.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
from buying houses for just this reason. Not sure how well it'll work (I could see them using shill companies) but it's a good first step.
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Reaganomics was a proven disaster and you ought to be ashamed of yourself for pushing so-called "supply side economics" like he did. All supply-side economics does is make the suppliers wealthy, because subsidizing supply does not increase supply, nor does it decrease price. All it does is increase the profitability of the corporation receiving the subsidy, and subsequently, their shareholders.
We learned just this morning that 1% of people own 50% of all stock, and therefore those 1% of people also suck down 50% of all profits made. The rich get richer, and the poor get hungrier.
Reagan was the architect of the downfall of the entire middle class.
A new housing project disguised in modern design