Microsoft, decidedly portraying themselves as moral capitalists, has announced their latest decision to invest $500 million of their company profits towards a new affordable housing plan across Seattle — the city notorious for its rising rent costs following the construction of Amazon’s HQ1. As the major metropolitan area becomes an icon of displacement failure for the abandoned working poor and struggling tech labourers, the company’s new pledge to “ensure a healthy community” raises questions why the neglect of baseline public service is being left to the charity of big tech power-houses.
On Wednesday, the company released a statement to The Seattle Times detailing how the housing-commitment plan —possibly the largest in corporate American history — will see over $225 million go towards helping developers facing expensive land and construction costs “preserve their workforce housing”. These individuals on the east side — which just so happens to be where Microsoft’s lavish 50,000 workers are currently stationed — are considered eligible if they make anywhere upwards of $62,000 and $124,000. Another $250 million is expected to go towards building low-income housing for those making around 60% of the city’s median income (around $48,150 for a two-person household, according to the estimates from journalists Vernal Coleman and Mike Rosenberg).
Microsoft also mentioned another $25 million going towards “local homeless aid organizations and anti-eviction lawyers” as they lobbying local government officials to ease certain zoning restrictions that reportedly make “building affordable apartments illegal in 75% of Seattle’s city limits”. Unlike the multi-billion dollar government subsidy behind Amazon’s HQ2, affordable homes are not just limited to the company’s tech-staff, allowing for any individual deemed eligible low-income residents such as teachers, firefighters and others.
“Our success has been fueled by the support of this region,” said Microsoft President Brad Smith. “We want our success to support the region in return. At some level, we as a region are going to need to either say there are certain areas where we’re comfortable having more people live, or we just want permanently to force the people who are going to teach our kids in schools, and put out the fires in our houses and keep us alive in the hospital, to spend four hours every day getting to and from work. That is not, in our view, the best outcome for the community.”
What Smith left unsaid, however, was the common rule central to these for-profit institutions: if we scratch your back, you’ll scratch ours… plus interest. As Microsoft’s decision unfolded, the journalists discovered that a total of 95% of all donated proceeds are instead going to act as loans for the company to eventually remake gains on while bolstering their public image — with exception to the $25 million in grants to local groups. This isn’t to say the $500 million is insignificant, especially for a program accessible to all local residents, though outlines the market intentions of the company, all of a sudden, playing the role of charity-for-hire. Over the course of the next three years, expect these loans to be covered by either private, non-profit or big governmental developers left unspecified in the announcement
Essentially, Microsoft is conducting itself more as a speculative bank offering cheques for gains than a graceful public servant conducting all this from the bottom of their hearts. This presentation certainly hasn’t failed. In Vox, it’s reported the company was able to secure assurances from Seattle lawmakers of their commitment to “upzoning” — relaxing zoning rules to allow developers to build structures with more units for higher populations within confined spaces — while also pressuring local politicians to enforce the law in a way to suit their corporate priorities.
These include measure such as transit access, address permitting processes and fees, cutting taxes as incentives to build whatever they deem necessary, etc. While readers should keep their eyes open, a recent blog post does explain the benefit of the lending model, whereby the company can be “repaid and then lend this money again” through a (potential) revolving door of economic transaction. The tradeoff is their returned investment is not a guarantee, of course, versus the reward of the private market using their profits for specific noble constructs.
This isn’t outside their own interests either. As argued by journalist Dylan Matthews, studies how not only has rent increased over time, the supply for housing among workers hasn’t kept up with the demand. It’s incredibly harder to sell computers to the average Joe and maintain skilled labours behind the manufacturing when their work is in a city economically exclusive to the rich, whether by design or unforeseen accident. Matthew is correct in saying the true progressive solution isn’t to prevent gentrification through reactionary activism, forcing companies to leave for the sake of socialist credibility, but rather policies that controls rent enough to avoid the toxic alienation behind elitist-only markets.
We see these controls through government subsidies for the low-income, expanded public housing or these innovative private ventures. We just shouldn’t pretend predatory greed — true human nature left unaccounted — is key to big tech’s reign. Even with the clean record of Microsoft and the always charitable Bill Gates, you don’t become a billionaire without some degree of consistent power-wielding. This test will see whether economics actually does trickle down. “There is almost no level of housing that isn’t direly needed,” said Claudia Balducci, a member of the King County Council leading the Affordable Housing Task Force, in her statement to The New York Times. “This is where Microsoft is going to be, and the region needs to work. I just don’t think this is wholly altruism.”
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