Microsoft Will Spend $500M To Address Affordable Housing and Homelessness in the Seattle Region (geekwire.com) 158
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.
Loans get repaid; how is this an expenditure? (Score:2, Insightful)
Title
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I was wondering the same thing: when is a loan philanthropic?
when you get big tax benefits, that's when
Rates (Score:5, Informative)
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
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Only a greedy Jew considers money lending to be "philanthropic".
Only religious nut cases willfully refuse to understand such a basic financial principle as the time value of money.
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They would be helping the needy already out of their own pocket.
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Microcredit [wikipedia.org].
This is the enterprise of making philanthropic loans. And it has proven to be one of the most effective tools ever devised for lifting people and communities out of poverty.
Re:Loans get repaid; how is this an expenditure? (Score:5, Interesting)
it's an expense when you loan the money and then you put the amount owed as receivables onto your balance sheet and recognize the repayments as revenue
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Re: Shareholder interests (Score:5, Insightful)
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.
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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
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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 [tiaa.org], published in 2017: more than 20% of the assets under professional investment management in the U.S. are in SRI (Socially Responsible Investing [wikipedia.org]) assets. People who put their money in those vehicles care both about making money, and about the ethics thereof.
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Re: Shareholder interests (Score:2)
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).
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Re: Loans (Score:2)
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.
Will Those Homes Update At Random Times? (Score:5, Funny)
Affordable housing for cheap workers (Score:1)
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.
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Here's a time machine. Want to go live back in that guilded age?
Just medical advancement one makes 10 years ago a murderous place compared to today.
But please, live in the fantasy rhetorical world of class warfare.
Re: Affordable housing for cheap workers (Score:1)
When poor and middle class incomes have dropped, and the wealthy have increased theirs due to using bribes err campaign contributions to enact policies conducive in doing so, that is the very definition of class warfare.
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Yet the average lifespan of most Americans has gone down over the last ten years.
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I'm pretty certain the GP was implying he did *not* want to live in that age. Is a whoosh on order here?
Investment not charity. (Score:5, Insightful)
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.
Re:Investment not charity. (Score:5, Interesting)
Charity is when you give someone some money on the street or the Red Cross some money to deal with future disasters. Philanthropy is when you demand the guy on the street goes to homeless shelter or complain because the Red Cross does not spend money on the disaster you want
The reason home prices are so high is that certain groups of people like to live together and they like to have high home values so undesirables don’t go there. To see these groups of people just check the demographics of Seattle, San Francisco, and houston, each with very high densities of very well paid engineers.
Affordable housing can temper the tragedy of gentrification by providing resources to displaced people who can no longer afford to inhabit the area. More than likely it will just excaberate the problem by causing more to want to live there, encourage even higher prices to keep the undesirables out, and promote the myth that certain groups of people have the right to live wherever they wish, even if they. cannot afford it,
it is like socialism for the entitled.
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More than likely it will just excaberate the problem by causing more to want to live there, encourage even higher prices to keep the undesirables out, and promote the myth that certain groups of people have the right to live wherever they wish, even if they. cannot afford it,
Issuing a loan for the creation of affordable housing perpetuates the myth that housing is affordable? Isn't that like saying that cheap food perpetuates the myth that starvation is avoidable? /s
More likely is that the artificial suppression of the influx rate (due to inflated prices) is reduced, leading to more people who want to live there actually being able to.
Remember kids: people getting what they want is BAD!
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this was exactly my point. Certain groups believe that living in Seattle and eating artisanal farm to table porchetta benedict with sous vide ovos is a birth right. They can’t understand that eating a mug of oatmeal with raisins is not starving. They think if they have to have 7-11 coffee instead of Starbucks it is a police situation.
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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.
Cost of living is also a driving factor in Microsoft's wages. Their employees may be on better terms with the locals leading to happier workers and lower turnover. And it may get goodwill with the local officials who could otherwise try to tax them to fix the housing problem. The PR is nice, but there's probably quite selfish reasons for wanting to put a damper on the housing market.
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Heroin made the housing prices insane for 250 miles around Seattle? Try again.
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Agree on the drug problem, but that is an extreme end of the spectrum.
However loaning out $500MM in base-tier financing (the base 10% of a total project cost) does help get housing built. That is the money with nothing physical to back it up yet, and it is much higher risk. You can easily help get $5B in housing built every 3-4 years.
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Well, if you quit giving out free needles, and looking the other way when heroin/meth addicts do drugs out in the streets
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Yes we have the history of prohibition to prove you right.
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Not thinking prohibition...just saying to NOT make it an inviting place to come and do heroin and meth.
Hell, I don't really think it is the govt's business what you put in your body, legalize it, but even if you did that, do NOT give out free needles, and overlook people living in your streets/sidewalks just laid out doing drugs.
Arrest them for vagrancy, doing drugs out in public could enforce those laws, basically don't make the city an inviting
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it gets expensive dealing with the diseases that are encouraged by needle sharing. You are right that they shouldn't be doing drugs on the street with the quality of todays street drugs. Somewhere safer would be a good start. Ideally remove the stress of where their next drugs are coming from so they can get a job and be productive members of society.
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fuck'em...let them deal with the repercussions of their own actions.
That stuff usually ends up killing you, if that's the risk they take, then so be it.
One
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They've been experimenting here with giving some junkies heroin (in a clinic) with good results, as in people getting a job and taking responsibility for themselves. These people are self medicating their pain for a reason and to just write them off seems pretty heartless. Should we write off people who break a leg, what about with bad eyes and needing a crutch in the form of eyeglasses?
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The problem is...pretty much no one in history has chosen to voluntarily break their own leg, or cause their eyes to de
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Heroin is really cheap. Much cheaper then running prisons and a police state to deal with illegal drugs as well as the crime created by artificial shortages raising the price and encouraging cutting the heroin with much stronger (deadlier) drugs.
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Well, if you quit giving out free needles, and looking the other way when heroin/meth addicts do drugs out in the streets, and build up sidelwalk shanties ....and generally quit making it an inviting environment to COME to and DO drugs and live that type of street lifestyle....you will quit making it a place that invites migration of that type of crowd, and your trouble with it will start to rescind.
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Sounds to me like nature cleaning out the gene pool.
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Sounds like an example of pure capitalism killing people. Something was sold that was misrepresented as a fairly harmless substance and killed 11 people.
And yes, pure heroin, sold for a reasonable price, is fairly harmless. it does have a habit of causing constipation though so maybe it should be illegal.
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You GOTTA be kidding me?
Since when has heroin EVERY been a relatively harmless substance?
Continued use almost always ends up with death of the user by overdose.
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Pure heroin is fairly harmless besides being addicting. Shit my aunt was given it when giving birth (last one in Canada). What's harmful is what it is cut with, along with the shortage of clean needles and what needs to be done to pay for it due to it being illegal.
There's no reason that someone can't live a long life while using heroin regularly as long as they know the dosage to use, something hard to do with street drugs. Look at some of the Rolling Stones as examples of surviving a long time while being
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Well, you're talking about Keith Richards.
That man really should NOT still be alive....I do think he should donate his body to science so we can figure WTF in his genes allowed him to live this long.
I will give it to you, that purity of heroin, likely does help, and did with Keith too, he had the $$.
But Keith finally had a wake up call, and said, this isn't working and q
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Have to fix the root cause (Score:2, Insightful)
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, bu
Re:Have to fix the root cause (Score:5, Interesting)
There are other "root causes". Let's just say "poor life choices" is one of them, because it incorporates quite a few variations.
Around here, those without shelter primarily consist of people who have rejected shelter being offered to them, because there are too many "restrictions" attached... Like giving up drugs (including alcohol) while in the shelter. There are multiple unfilled, low-skill jobs available... but all of them require that you show up regularly for them, and many require drug testing.
Counseling is available for those who need it... but many refuse it.
These issues won't be dealt with by building more buildings.
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> it's poor's fault they're poor
+1!
Well, I don't really argue the point: more buildings probably won't help. Finding a use for the huddled masses would (yes, "easy jobs abound", how informed you are) but warm bodies just aren't useful anymore. Staffing agencies are a market built around that glut, they are literally paid to cherry-pick on an oversupply that has only survived while industry was dependent on them - reducing or eliminating dependency is Just Good Business, the socioeconomic stage isn't my p
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We can use them as fertiliser or as a nutritious dietary supplement.
Re:Have to fix the root cause (Score:4, Insightful)
While I agree with your sentiments aren't you lumping all the homeless together?
Does anyone know what percentage of the homeless _don't_ want help? (Or DO want help)
Re:Have to fix the root cause (Score:5, Informative)
It's not JUST homelessness. That's a problem, and it's one of the worst in the country, but poor life choices do not drive the price of a 400 sq ft studio up past 1k/month.
Building more housing most definitely WILL help the root issue, providing the rich don't just buy them all up and rent them back to us at todays cost.
If the affluent want to enjoy living like royalty, then they need to ensure the servantry can afford the servants quarters.
I've been trying to buy a home in the Seattle suburbs for 2 years. Every time I find something I want and get to making an offer, I am outbid by 100k, sight unseen, with no strings attached. These are not families bidding me out, its wealthy investors.
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It's not JUST homelessness. That's a problem, and it's one of the worst in the country, but poor life choices do not drive the price of a 400 sq ft studio up past 1k/month.
"Moving to a place where the housing prices are insanely high" probably counts as a poor life choice.
Building more housing most definitely WILL help the root issue, providing the rich don't just buy them all up and rent them back to us at todays cost.
What else do you suppose they ought to do with all that "quantitatively eased" money they're swimming in, bereft of other good investments to park it? If snapping up all the real estate they can is the best-returning investment they can find, that's what they'll do.
If the affluent want to enjoy living like royalty, then they need to ensure the servantry can afford the servants quarters.
Traditionally the servants lived on premises, in the cellar or the attic. By that logic, the "big tech" royalty ought to build housing for their
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"Moving to a place where the housing prices are insanely high" probably counts as a poor life choice.
I grew up here. Not that it matters, but having been all over the world, nothing in my opinion quite beats the greater Seattle metro.
What else do you suppose they ought to do with all that "quantitatively eased" money they're swimming in, bereft of other good investments to park it? If snapping up all the real estate they can is the best-returning investment they can find, that's what they'll do.
The rich can do whatever they want with their money,including continuing to buy up all the real estate, but if these homes are built with private grant money, public money, or any other kind of public help in the name of helping the housing crisis, then I feel at a minimum- the right of first refusal should go to single working families before they are offered to the land baro
Canada banned foreign investors (Score:2)
Mental illness is rife among the homeless (Score:5, Insightful)
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...
Re:Have to fix the root cause (Score:5, Insightful)
This post is great in that it illustrates the very worst approach to solving homelessness. One that's been proven to fail over and over and over and over again, with almost a century worth of data to back up that notion.
You must treat homelessness first, then drug addiction next. Having warmth, shelter, food, and security is essential to building a foundation to which one can then deal with addiction.
If you're going to help people, help them. Put away your paternalistic moralizing. Tying benefits to purity tests is a recipe for failure.
Re:Have to fix the root cause (Score:5, Informative)
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Was this a typo?
In MOST states, you don't have to register (document) your firearms.
Did you mean undocumented (illegal) immigrants?
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From what I've heard about the new draconian laws they've passed against 2A rights, mandatory registration of weapons is the least of the barriers they are putting up to hinder the law abiding citizens.
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You make bald assertions about supply and demand situations that have over a century of contrary evidence to support them.
Greed is why shelves are stocked with cheal food in free countries, but in short supply in countries that limit greed in the name of some bass ackwards concepts from millenia ago honed in non-free societies.
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"Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.” Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement.
The agreement cuts across the usual poli
So that's like maybe 500 houses (Score:2)
We have about 250,000 people, and $500 million is about 500 houses here.
Um.
That's not a lot.
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What if they enable compression?
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What if they enable compression?
No, that would require resetting the zoning from 1990s SFH to 1930s 6 story MFH that used to exist in all areas of Seattle.
Mind you, if you also turned off the parking requirement and the design review for standard buildings requirement, you could probably get 2500 houses for that price, but they'd be townhouses and apartment buildings like Boston and the Bronx and we all know those are hellholes.
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Aah, the fabled 'middle-class-out' algorithm.
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$500 million is about 500 houses here.
We are talking Seattle, Washington, right?
If so, you are clearly wrong.
Accordign to trulia ( https://www.trulia.com/real_es... [trulia.com] ) There is only one district of Seattle proper where the median housing price is over 1M. Most of the south the the city seems to have a median around 400K.
Now, they are talking about low-income housing, so certainly houses in the lower end of the curve. Also, they are talking about the Seattle region, not Seattle proper, which is likely to be cheaper. But even at 400K, you are talk
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The price it will fetch is not the same as the cost to build. Just ask your housing insurance guy to explain it.
If the discrepancy is more than a reasonable profit, there is a housing shortage. Half a million to buy a 2000 square foot house is asinine based on costs.
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Lol, you are so not from here. Even our townhouses go for around $800k, a long time ago there was only one district, but it's pretty much most of the city now.
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You are right, I do not live in Seattle. I just looked at the map.
Trulia's data is based on the last 3 month. Are they lying? Is the data inaccurate?
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They probably treat distant areas as if they are in Seattle. It's like calling Palo Alto as SF, or Isla Vista as Santa Barbara. Not even close to the same.
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Seattle has been the nations fastest growing housing market for quite a while now. Instead of looking at old data, take a look at the current prices. A rotten shack far from the freeway on .25 acre starts at like 750k.
400k buys you a fixer-upper home an hour outside of Seattle, in a bad neighborhood.
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We are talking Seattle, Washington, right?
No, we are not.
From TFA-
In response to the housing shortage, Microsoft will direct $225 million toward middle-income housing in six cities: Bellevue, Kirkland, Redmond, Issaquah, Renton and Sammamish.
Have a look at the housing prices in those areas. Nothing starting less than 1M.
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I see, it is some particular cities in the Seattle metro. Still, I just looked at the map, and the median is way below $1M in most of these areas. Much closer to $600K according to the map. And low-income housing almost by definition will have a cost under the median.
Just checked on zilloz, Issaquah, 1+beds (but most entries are 2+), under $700K for a house, condo, town home, there are 3 pages of results, in Sammamish, there is a page, in Bellevue, there is about 3 pages.
And the loans are to build which is
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Hmm I guess your right, You win this time Gadget.
I've been house hunting for like 2 years in these places, but my search filters for only single family homes with yards. I think a 900 sq ft townhome for 400k+ is ridiculous, but I guess I'm just too choosy... or maybe a little bitter from being priced out of my home town.
I think the MS money WILL be a help, regardless of the tax games they are for sure playing, but only as long as the new homes are sold as primary residences to single families, and not wealt
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When looking to borrow to buy, check long term investment bonds, are the rates rising all falling, rising means rates are guaranteed to go up. So the problem is done to will people who do no understand property values, what drives it and future potential, all the look at is the colour of the paint and what payments they can afford to make at current interest rates and buy according to that, so real worth doesn't enter into it, just 'FEELINGS' and ignorance about interest rate changes.
So property values are
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I've been house hunting for like 2 years in these places, but my search filters for only single family homes with yards. I think a 900 sq ft townhome for 400k+ is ridiculous, but I guess I'm just too choosy... or maybe a little bitter from being priced out of my home town.
Yeah, I understand that. I have been house hunting in Charlotte, NC. It is a much cheaper place than Seattle. But I understand the feeling of not necessarily finding what you are looking for at a price that make sense. I ended up pulling the trigger because rent has been going up like crazy.
The cities that are getting the moneys focus are all deep tech forest and VERY upscale. Microsofts main campus is in Redmond, and has satellites in each city named. Those cities also all share a border with at least another named. Microsoft is forced to pay their army of contractors more because its just to expensive to live anywhere near those places.
Yeah, that's how it seems. I guess one could claim that they try to give back to their local community. But most like it is a tax optimization, coupled with trying to keep prices down a little to make their work force ch
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Looks like $300k in Seattle gets you a one bedroom condemned trap house https://www.zillow.com/homes/f... [zillow.com]
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Possible unintended consequences? (Score:2)
Will the availability of a low interest loan increase the amount that a lower income person can potentially afford, thus raising the selling price of the property and in turn raising the price of all other similar properties. So then you'll only be able to afford these properties if you can obtain the low interest Microsoft loan? Similar to when we give free rice to third world countries. Our intention is to prevent hunger, but the effect is that local farmers are pushed out of business because they can't c
Microsoft is the perfect company to solve this (Score:5, Funny)
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Do people not understand how housing prices work? (Score:5, Interesting)
It's the same problem that's plaguing student loans. When you subsidize demand, the average price goes up. That's led to school tuitions spiraling up out of control. If you want to lower prices, you need to subsidize supply. Instead of building additional homes and giving them to people at below-market prices (which has the same effect on market prices as handing those people money), build additional homes and just flood the market with them.
Microsoft's just expanding their company town. (Score:2)
Even should it work as you describe, aren't the original buyers going to take the best offer? Which, in turn, is unlikely to be from a person who can afford less-than-$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 futu
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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.
If Microsoft paid their fair share of taxes... (Score:1)
Zoning (Score:4, Insightful)
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.
Not impressed (Score:3)
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.)
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The headline tells the tale. They get the good PR for 'spending' an apparently large sum, while de facto losing almost nothing, probably less than if they didn't do it.
We don't need LOANS; we need HOUSES (Score:2)
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.
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Once wealthy people buy it all nothing is going to be low cost.
No wealthy investor wants their property drop in price when the city gov/NGO/computer company places 100's of homeless people in their once nice part of a city.
Crime/trash/open drug use/criminal/illegal migrants start to give the value of that real estate a negative repu
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Microsoft (Score:1)
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}