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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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Like most Windows 10 installs=
Why did the chicken cross the road? Because Elon Musk put an AI chip in its head.
Not all shareholders have a goal of making maximal profit. Why is it assumed that the sole reason for owning shares in a company is to see financial returns. For example, I invest in Tesla not wanting much of it back but rather to see people get affordable electric cars and to dramatically reduce the 40,000 people killed in traffic accidents by enabling autonomous vehicles. Making a difference like that to me is more important than making money.
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.
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.
We have about 250,000 people, and $500 million is about 500 houses here.
Um.
That's not a lot.
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Well, you don't see it because you are such a far outlier from the norm on this.
99.9999999999% of people invest for the sole reason of making money. Period.
Heck that is pretty much one of the cornerstones of why investing like this was invented.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
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.
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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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
Sarcastic enough? Let me ask you this then, why do people beg for loans more than loan sharks beg you to take a loan?
Obviously Microsoft is offering better loan terms or loans to higher risk people than a bank would provide. Is it charitable to take a chance on people, I think yes in many circumstances.
It would be nice to make money, I said money wasnt the sole or even greatest reason. I do believe in capitalism you know. By your assertion, if Microsoft were to get into a highly profitable human trafficking business none of the shareholders would want to get out of it (assuming the profitability/legal ramifications were not in question).
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.
Are you suggesting their prior business practices rule out that market?
99.9999999999% of people invest for the sole reason of making money. Period.
You really shouldn't make such categorical statements without having any clue about the subject in discussion. You're wrong by at least 19.9999999999%.
From this study, published in 2017: more than 20% of the assets under professional investment management in the U.S. are in SRI (Socially Responsible Investing ) assets. People who put their money in those vehicles care both about making money, and about the ethics thereof.
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}
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.
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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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