- Apple announced a $2.5 billion pledge to address housing affordability in California, including a $1 billion housing investment fund to help develop new construction.
- The pledge includes $1 billion for financing and down payment assistance for first-time homebuyers and a commitment to explore new strategies that will help service workers, school employees and veterans access mortgages. Apple is also offering $300 million worth of land in San Jose for home construction.
- The announcement comes in response to a housing crisis that has dropped home ownership in the Bay Area to a seven-year low. According to the California Budget and Policy Center, more than 4 in 10 households in the state had unaffordable housing costs (exceeding 30% of household income) as of 2015, and 1 in 5 spent more than half of their income on housing costs.
Tech companies have shouldered much of the blame for the recent housing crunch, as they have brought an influx of jobs that exceeded new housing construction, with incomes that floated the cost of living. According to the National Low Income Housing Coalition, 45% of Californians rent their home, and the average hourly wage is below what is needed to rent a two-bedroom home.
Between April and June of this year alone, nearly 30,000 people left San Francisco — in large part due to housing costs — and the city has a shortage of 236,000 low- and middle-income homes.
That’s prompted some tech firms to commit their own money to solving the housing crisis. Google and Facebook have each pledged $1 billion in land, grants and loans for housing help in California this year. Microsoft made a $60 million loan to Kings County in Washington to address homelessness around its headquarters in Seattle, and Amazon donated $8 million to housing groups in Seattle and Arlington County, VA.
In a statement, Apple CEO Tim Cook said "we know the course we are on is unsustainable," adding that the pledge represents the company’s "profound civic responsibility."
The funding will be distributed in partnership with the state of California and is expected to take approximately two years to be fully utilized. Apple said that capital returned in the form of loans will be reinvested in future projects over the next five years.
Matt Schwartz, president of the California Housing Partnership, said that Apple’s funding should help address the housing problems, but that it will take a full-court press by politicians, corporate partners and advocates to actually create enough housing.
"In an ideal world where local governments had enough money for infrastructure, where people who already live in communities weren’t desperate to pull up the drawbridge against anyone new moving in and were elected officials were courageous enough to stand up and say we need more homes …. Tech companies wouldn’t need to be asked to do this," Schwartz told Smart Cities Dive. "Unfortunately, those conditions don’t exist, so in this world tech companies do need to show leadership. They can help with money and by creating space for elected officials to be braver and approve new long-term measures."