Apple has committed $2.5 billion to ease California’s housing crisis, eclipsing similar pledges by fellow Silicon Valley giants Google and Facebook to address a lack of affordable housing in a region where affluent tech workers have helped drive up the cost of homes.
Apple’s pledge Monday includes a $1 billion statewide fund creating an “open line of credit” to build new homes for households with low to moderate incomes and a $1 billion homebuyer mortgage assistance fund.
“It’s a recognition that the San Francisco Bay Area is in a major housing crisis,” said David Shulman, a senior economist with the Anderson Forecast at the University of California, Los Angeles.
Shulman said it’s a good step but might not make much of a difference if it’s just creating “cheap financing” for development and down payment relief for people who are high enough on the income scale to be able to buy a home in the expensive region.
The company’s promise also includes $300 million to make Apple-owned land in San Jose available for affordable housing — a strategy Shulman said is more effective because sky-high land prices are at the root of the housing crisis.
“If they make the land available for free or very cheap, then you can do something,” he said.
Apple is also investing in a $150 million partnership with a Bay Area nonprofit to support new affordable housing projects with long-term forgivable loans and grants; and $50 million to address homelessness in the region.
Lisa Jackson, Apple’s vice president of environment, policy and social initiatives, said in a statement that the company worked closely with experts to craft a plan “that confronts this challenge on all fronts, from the critical need to increase housing supply, to support for first-time homebuyers and young families, to essential philanthropy to assist those at greatest risk.”
Google and Facebook this year each promised $1 billion to help address high housing costs. It’s probably not just philanthropic sentiment that’s guiding the tech companies’ efforts, said Andrew Padovani, an economist at the University of California, Davis, who said the high housing costs are making the region a less desirable place to live.
“They’re really starting to feel the effects of this,” he said. “Trying to hire workers for their campuses in the Bay Area is becoming more expensive. They have to pay workers enough to live in the area.”
Gov. Gavin Newsom on Monday called Apple’s pledge an “unparalleled financial commitment to affordable housing,” adding he hopes other companies follow its lead. The Democratic governor has urged tech companies to pitch in to ease a crisis in which there are far fewer homes and apartments than necessary to house the state’s nearly 40 million people.
The state has also enacted new laws aimed at boosting funding for affordable housing and easing development restrictions.