Before (lightly) criticizing Microsoft’s specific choices, it is important to say that their investment in local affordable housing is generous, one that their investors would probably not prefer, and that we are fortunate that that a global company is directing a disproportionate amount of its surplus to its home county.
With a total $750m commitment to the cause, the latest $65m allocation includes
$40 million into a fund operated by Urban Housing Ventures, a privately funded company focused on creating affordable apartments. UHV will use the funds to reduce the rent for 40% of units in three apartment buildings to middle-income levels.
UHV says the novel model allows investors such as itself to purchase apartment buildings and then lower the rents on some of the units without losing financial viability. The reduced rent allows buildings to operate at lower vacancy and turnover rates, offsetting some of the costs of converting the units, according to UHV.Monica Nickelsburg, Geekwire
Obviously, someone is going to live in these subsidized units and greatly appreciate the opportunity. But that public good is going to be partially offset by removing those units from the market-rate supply, putting upward pressure on those rents and aggravating costs for everyone not in the affordable housing system.
This is still a positive development: in effect, there is a transfer of wealth from some people who can afford higher rents, and Microsoft, to people who can’t. But spending that $40m to actually add to overall housing supply (which, to be clear, Microsoft is also doing at massive scale) would have fewer downsides.
In a blog post on the subject, Microsoft’s Jane Bloom argued that building new housing “takes years to accomplish and doesn’t address the region’s immediate shortage.” The real villain here is, of course, process delays that make it clear that local governments don’t actually consider affordability to be an emergency.