Tech giant Microsoft Inc said last Wednesday it would throw $US500 million at reducing housing unaffordability around its hometown of Seattle, and mayors around the region listed ways they’d make development easier.
In short, Microsoft president Brad Smith & chief financial officer Amy Hood said in their corporate blog, too few houses had been built to meet Seattle’s growth: “Since 2011, jobs in the region have grown 21%, while growth in housing construction has lagged at 13%.This gap in available housing has caused housing prices to surge 96% in the past 8 years, making the Greater Seattle area the 6th most expensive region in the US.”
[According to the Demographia survey of affordability out today, Seattle’s median multiple – median house price divided by median household income – was 5.6 in 2018, compared to Auckland’s 9.0.]
“Median income in the region hasn’t kept pace with rising housing costs, increasingly making it impossible for lower- & middle-income workers to afford to live close to where they work.”
The Microsoft duo said the company had worked with housing statistics business Zillow and the Boston Consulting Group & Challenge Seattle to learn more about best practices. They said the gap between job growth & housing growth had been even greater in the suburban cities around Seattle than in Seattle itself.
“We’ll put this money to work with loans & grants to accelerate the construction of more affordable housing across the region. We will invest:
- $US225 million at lower-than-market rate returns to inject capital to subsidise the preservation & construction of middle-income housing. These investments initially will be made in 6 cities east of Seattle & Lake Washington: Bellevue, Kirkland, Redmond, Issaquah, Renton & Sammamish
- $US250 million at market-rate returns to support low-income housing across the entire King County region, and
- $US25 million in philanthropic grants to address homelessness in the greater Seattle region.
The Microsoft duo added: “We believe the state government has an important role to play as well. In the state legislative session that began this week, we’ll encourage the legislature to support the private sector by making additional housing investments and through policy changes to preserve & develop affordable housing.
“These recommendations include a $US200 million appropriation to the Housing Trust Fund to expand support for very-low-income individuals & families, which would almost double the investment from the last budget cycle. In addition, we will support condominium liability reforms, extending the multifamily tax exemption (MFTE), and new incentives for local communities to enact more efficient land use policies.”
The mayors’ support list
9 mayors in King County, representing communities outside Seattle, issued a statement in support: “To address this problem, we intend to do our part to break down barriers and provide incentives to substantially increase the supply of quality housing for all households in our community. We will consider opportunities to advance housing affordability in the region, including but not limited to:
- Making available at no cost, at deep discount, or for long-term lease, under-utilised publicly owned properties
- Updating zoning & land use regulations to increase density near current & planned public transit
- Reducing or waiving parking requirements in transit corridors to help reduce overall development costs
- Reducing or waiving impact & other development-related fees
- Streamlining & accelerating the permitting process for low- & middle-income housing projects to improve developer certainty
- Providing tax exemptions & credits to incent low- & middle-income housing development, and
- Updating building codes to promote more housing growth & innovative, low-cost development.
“We believe that these efforts, combined with the support of the greater community, will make our region more affordable for all households and will advance quality of life throughout the region.”
Microsoft blog, 16 January 2019: Ensuring a healthy community: the need for affordable housing
Attribution: Company release.