Apple will allocate $2.5 billion to fight California’s housing crisis. Most of the money will go to a housing fund for low- and middle-income residents ($1 billion) and mortgage assistance for the purchase of a first home (another $1 billion).
Apple is not the first to take such an initiative. Creating high demand in the housing market by attracting high-paying employees, high-tech companies like Google and Facebook have driven prices to record levels. Now they are spending billions to make homes available again – otherwise, their IT professionals will be left without doctors, teachers and firefighters.
About 30,000 people left San Francisco between April and June this year, and housing affordability in the Gulf region was the worst in seven years, Apple reported, citing data from real estate broker Redfin and the U.S. Census Bureau. The housing crisis has hit service workers the hardest, not much compared to programmers. For example, a family of four with an income of more than $100,000 a year is considered to be low-income in San Francisco.
“We feel a deep civic responsibility to ensure that the region continues to be a place where people can live, start a family and contribute to the development of the local “Apple called the region home long before the world even knew about the existence of Silicon Valley,” the company said in a statement.
In addition to $2 billion in construction and mortgage funds, Apple will spend $300 million to convert Apple-owned land in San Jose to residential development, $150 million to support new construction projects in and around San Francisco, as well as $50 million to help the homeless.
Providing affordable housing is stability, honor and opportunity for the company itself, explains Apple: “When such important things become inaccessible to a large number of people, we understand that we are doing something wrong and should help solve this problem.”
California, the largest state by population and GRP, has been experiencing a housing crisis for decades, which has only exacerbated the invasion of IT giants. Its main source is a sharp imbalance in supply and demand, and the reasons are:
- the influx of highly paid specialists;
- the high cost of land with low building density;
- legislative restriction on the amount of local taxes on homeownership. As a result, it is more profitable for the state to allocate land for commercial real estate than for housing;
- Strict environmental legislation combined with high construction requirements;
- counteraction to the new development of the existing communes, as a rule, consisting of highly profitable households;
- disproportionate development of transport infrastructure, raising prices close to workplaces locations.
McKinsey estimates that the housing crisis costs California about $200 billion a year. Housing in the richest U.S. state is 2.5 times more expensive than the national median, and with a 17% population in California, 22% of the homeless are living in the United States.
- Microsoft: One of the first in January 2019 to support affordable housing was announced by Microsoft. The company will spend $ 500 million on housing projects around Seattle, near which it has headquarters. The city is experiencing an acute shortage of cheap housing – there are almost no real estate cheaper than $ 500 thousand, and the number of transactions in the secondary market is small. Previously, they wanted to solve the problem of housing in Seattle with a tax of $ 275, which companies would pay for each of their employees. Amazon blocked this bill, and Microsoft was about to solve it on its own.
- Google: Following the investment of $ 1 billion in the construction of 15 thousand houses in the Bay Area in San Francisco, Google decided to help the homeless and create an investment fund for developers \. Journalists then called this decision an “act of conscience” by Google and an attempt to raise their reputation. “Our goal is that each member of the local community can find their place and develop regardless of whether they work in the technosphere or not,” the company said.
- Facebook: In October, Facebook allocated $ 1 billion in California home construction. The state government cannot independently overcome the crisis of affordable housing, the company said, so Facebook decided to invest in the construction of 20 thousand houses for “vital workers” in the region, such as teachers, nurses and emergency workers.
- Amazon: A few years ago, choosing a city for the second headquarters of the tech giant Amazon in North America made a lot of noise. Almost 240 settlements decided to compete for the promised $5 billion of investments and 50,000 jobs. The choice fell on New York, but under pressure from politicians and social activists the company had to abandon its decision. As a result, they decided to begin construction in Arlington County, Virginia. Techno giant decided completely re-draw the village to fit for its needs. They decided to make a bet on environmental friendliness: one of the three main urban areas will be occupied by a huge park, more than 600 parking spaces for cyclists will be placed in the city, gardens will be placed on the roofs of the buildings, and the headquarters itself will be built from recycled materials. The company also planned to invest about $ 2.5 billion in the development of the city and create more than 25 thousand jobs in the next decade.