When several Seattle business leaders decided to take on the region’s confounding housing crisis, they did their due diligence. Microsoft and Challenge Seattle — a coalition of the Seattle-area executives — set out to find the cities that had managed to get their arms around rising housing prices and related issues like homelessness and displacement.
The results were not encouraging.
“Nobody, nobody at all has succeeded,” said Challenge Seattle CEO and former Washington Governor Christine Gregoire speaking Tuesday at an event in Seattle. But that did not discourage them. Challenge Seattle published a comprehensive report on what it would take to address the region’s shortage of middle-income housing. The list includes policy changes, public investments, cultural shifts, and new sources of capital.
That’s where Microsoft comes in. In January the company announced a $500 million commitment to spur more affordable housing development in the Seattle region.
Gregoire spoke with Microsoft Philanthropies Director Jane Broom and Puget Sound Business Journal Publisher Emily Parkhurst about how Microsoft sees its role in tackling the housing crisis in its hometown. The panel discussion, part of the InnovateHousing conference, also covered other levers the private sector can pull when it comes to housing. Fannie Mae and the University of Washington’s Center for Real Estate Research co-presented the conference.
Broom said a key part of Microsoft’s strategy is flexible capital that can adapt to the region’s needs and a powerful voice on the issue. The latter is important for shifting community attitudes about density, which is necessary to move the needle on housing, according to Challenge Seattle’s report.
“Sometimes you need a different voice … helping to build that public will, and public support, that our policymakers absolutely must have in order to make the changes that they need to make,” Broom said.
Microsoft’s affordable housing program dates back to a meal that the company’s president, Brad Smith, shared with the Redmond, Wash., police chief. Smith learned that the majority of the force couldn’t afford to live in the community they policed. Microsoft started researching the issue and learned that crucial members of the community, like teachers, firefighters, and nurses, were getting priced out.
A few months later, Microsoft unveiled its $500 million fund, which earmarks $475 million for investments in affordable housing projects and $25 million in philanthropic grants to organizations tackling homelessness.
In June, Microsoft began accepting applications for housing projects. Broom said Tuesday that the program is designed to let community needs drive the investments.
“We can be very, very flexible with this capital,” she said.”It’s one of the things we’re really asking the community to do. Come to us with ideas. Come to us with your financial stack. Come to us with prospects and if they’re not penciling out, let’s try to figure it out.”
“The notion of being innovative and creative is helpful and I think that’s something that the private sector and the tech sector can bring that’s unique,” Broom added later.
The launch of Microsoft’s initiative kicked off a series of similar housing commitments from other tech companies in the months that followed. Facebook and Google launched housing programs of their own, each valued at about $1 billion. Amazon and Salesforce made similar commitments. Earlier this week, Apple became one of the biggest spenders on housing, launching a $2.5 billion effort to alleviate California’s housing crisis.
Big Tech’s foray into housing unlocks much-needed capital to boost development in communities where supply is short. But it’s just one piece of a much bigger puzzle, Gregoire said Tuesday.
She and others in the business community asked officials “from Sydney, Australia to London, England to California” what it would take to solve the housing crises so many cities are grappling with.
“To the person, they all said to us, while you can get capital — it’s essential and you can’t do anything without it — if you don’t change public policy, you don’t change the rules and the regulations, if you don’t change the amount of time it takes to get a permit, if you don’t make the permit something that is absolutely predictable to the developer, you cannot succeed.”
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