“This is more than a home, it’s a community. And there needs to be room for all of us.” That was our message to the region one year ago, announcing Microsoft’s $500 million commitment to help address one of greater Seattle’s fastest growing problems – ensuring affordable housing for everyone. The problem is straightforward: Our community isn’t building enough housing that’s affordable to low- and middle-income families, particularly in Seattle’s surrounding cities on the eastside of King County. The solution – as many of us know – is complicated.
Today we are announcing a $250 million increase to our affordable housing initiative in the form of a line of credit to the Washington State Finance Commission, bringing Microsoft’s total commitment to $750 million. We are also announcing $55 million in investments and grants towards our original $500 million commitment.
This brings our total to $380 million allocated over the past year to support the preservation or creation of over 6,500 affordable housing units in the greater Seattle area.
Below is a summary of the projects we are announcing today:
- Washington State Housing Finance Commission (WSHFC): Through conversations with the WSHFC, Microsoft partnered on an innovative opportunity to deploy capital to extend the State’s limited tax-exempt bond status. Microsoft has provided a no-cost $250 million line of credit to the WSHFC to enable it to preserve and recycle the state’s limited tax-exempt private activity bond volume cap. The line of credit will enable the WSHFC to finance approximately 3,000 additional units of much-needed affordable housing
- Evergreen Impact Housing Fund (EIHF): a newly launched partnership between Seattle Foundation and the Washington State Housing Finance Commission with support from JPMorgan Chase & Co. It is a first-of-its-kind structure that leverages the Low-Income Tax Credit program by offering last dollar investment to efficiently develop affordable housing that wouldn’t otherwise be built. Microsoft will contribute $50 million to this fund to promote the development of approximately 1,250 low-income housing units on the eastside of King County
- HomeSight’s Othello Square Project: a $2.5 million philanthropic grant to support the project that includes 192 units of affordable housing, early learning education, small business incubation, cultural celebration and preservation, and financial services in Seattle’s most diverse neighborhood. It is a creative, community-driven response to the pressures of extraordinary growth in Seattle, and is adjacent to the Othello Light Rail Station
- Rise Together: a $2.5 million philanthropic grant to Rise Together, a collaborative effort between six nonprofit organizations to preserve their communities by creating 400 new units of low-income housing in Seattle’s Central District, Capitol Hill and White Center neighborhoods. The Rise Together partners have come together to make a bigger impact on housing affordability and healthy communities than they could working individually. With a comprehensive approach to community needs, their collective work will result in the creation of housing and vital neighborhood resources that encourage opportunities for all
Today’s news comes after a year of steady progress following our January 2019 announcement:
- We made a $60 million investment with King County Housing Authority (KCHA) to preserve 1,029 units of middle-income housing in Kirkland, Bellevue and Federal Way
- We made a $5 million grant to Plymouth Housing to help create 800 more units of permanent supportive housing in Seattle for homeless adults
- And, just last month, we saw great leadership from the City of Seattle, King County and the Sound Cities Association as they passed legislation to create a much-needed, long-overdue Regional Homelessness Authority to address the homelessness crisis across the region
We’re encouraged by the momentum in the region. We’ve met – in some cases multiple times – with each of the nine mayors and their administrations that were first to sign the affordable housing pledge in the area, promising their support to help address policy barriers. We’ve learned more about the specific needs and challenges within their communities and identified opportunities to pursue.
However, the initial response to our request for proposal (RFP) was less than we hoped and showed us just how difficult it is to create affordable housing where it typically doesn’t work. The good news is that we are starting to see a pipeline of new ideas and projects here on the Eastside of King County where there really wasn’t one before. And we will double down in the coming year to work together with local mayors, councils and city staff and push harder for the critical policy reforms we believe are vital in order to move forward.
We’re excited by the work that lies ahead, but we remain clear-eyed about the challenges that remain. As the data from our continued collaboration with Zillow shows, there was a gap of approximately 316,000 middle- and low-income affordable housing units in the Puget Sound area in 2019, up from a gap of 305,000 in 2018. While the supply-and-demand gap has continued to grow over the past year, we are hopeful our region may have begun to stem the tide. The year-over-year growth rate of the affordable housing gap has slowed from 10.8% in 2017 to 10.5% in 2018 and to 3.6% in 2019, according to Microsoft’s data science team. While we’re encouraged to see this growth rate fall, it’s clear that what we really need to do is see the housing gap fall, not continue to increase. To achieve this, our community needs to come together and act with greater urgency, creativity and shared accountability. It will require a spectrum of new financial, technical and societal approaches that are created in partnership with people who share a collective vision.
We appreciate the collaboration, feedback and support we’ve received about this initiative from so many throughout the community over the past year. We continue to encourage others to get involved and do what they can to help. As we said one year ago, Microsoft feels a tremendous sense of gratitude for the support we’ve had from this community. We are committed to ensuring our success supports the community in return.