Amazon and Microsoft diverge on approach to housing crisis in their home region

As two of the world’s most valuable companies, Amazon and Microsoft have created mind-boggling wealth and economic vitality in the Seattle region. But around them, housing prices have skyrocketed and the number of people experiencing homelessness has spiked as the rising tide of the tech industry fails to lift all boats.

Now the two tech giants are taking on the housing crisis, but their approaches are as different as the companies themselves.

That’s one of the topics we discuss on the new episode of GeekWire’s Week in Geek Podcast.

We also delve into the story of Bill Gates standing in line for a hamburger and the Seattle Sounders dropping Xbox in favor of Zulily on their jerseys.

But the more substantive news this week was Microsoft’s announcement of a $500 million initiative in the hopes of correcting the Seattle region’s dysfunctional housing market. It’s a novel approach. Microsoft plans to invest $475 million in low- and middle-income housing developments at market rate returns or lower. Microsoft President Brad Smith said the returns will be re-invested into the program so that it is sustainable long term. The remaining $25 million will be donated to organizations tackling the region’s homelessness crisis.

In recent years, Amazon has targeted a different symptom of the housing crisis: homeless families. Amazon is building a permanent shelter for Mary’s Place, a non-profit that provides services to homeless women and families, on the company’s Seattle campus. Through its support of groups such as Mary’s Place and FareStart, an organization that provides job training for people experiencing homelessness and poverty, Amazon has donated tens of millions of dollars.

Amazon CEO Jeff Bezos is also using some of his personal fortune on the issue. Last year he announced a new $2 billion philanthropic initiative called the Day One Fund. About $1 billion of the fund will be donated to homeless service providers.

There’s also a difference in optics between the two companies and their efforts to mitigate the housing crisis. Amazon was the poster child for an opposition effort to Seattle’s short-lived head tax, which would have collected funds from the city’s top-grossing companies to fund affordable housing. The tax was repealed quickly after passage because the Seattle City Council didn’t believe they could win a fight with the business community, including Amazon.

Here’s what Smith said when we asked him about the contrast between the companies.

GW: Lots of tech companies in the area have used their voice on this issue, but on some occasions, they’ve used their voice in ways that might seem a little bit incongruous. I’m thinking of the head tax and Amazon really loudly using their voice to say that they didn’t support it. So do you think that there’s dissonance between these things?

BS: I don’t know that there’s dissonance. I think we need to address the right problems, but we need to focus on the right solutions. I think it’s understandable that there were companies last summer in Seattle that thought that the solution that was being offered was going to be a step backwards rather than forwards. At the end of the day though, we all have to decide what we stand for and not just what we stand against, especially when we’re talking about a problem that affects our region as broadly and deeply as this one does. One of the benefits of being proactive is that it’s actually easier to fashion some ideas and hope to build some momentum behind them. That’s part of what we’re doing here. I do think that all of us in the tech sector in Puget Sound have an opportunity to take more steps to show the region what we stand for.

Microsoft stayed out of the head tax fight. fight. The company has also chosen to grow in the suburbs of Seattle, rather than the urban core. As a result, Microsoft hasn’t become the visible symbol of tech growth that Amazon has. Its foray into the housing issue comes off as more forward-looking than reactive.