Computer tech giant Apple, Inc. will commit $2.5 billion towards building more affordable housing in California amid concerns that Silicon Valley has helped drive low- and middle-income families out of the local housing market.
“As costs skyrocket for renters and potential homebuyers — and as the availability of affordable housing fails to keep pace with the region’s growth — community members like teachers, firefighters, first responders and service workers are increasingly having to make the difficult choice to leave behind the community they have long called home. Nearly 30,000 people left San Francisco between April and June of this year and homeownership in the Bay Area is at a seven-year low,” the company said in a media release.
The company will invest $1 billion in an affordable housing investment fund to help the state build low- to moderate-income housing and another $1 billion to assist first-time home buyers with financing and down-payments, the company said on Nov. 4.
“Before the world knew the name Silicon Valley, and long before we carried technology in our pockets, Apple called this region home, and we feel a profound civic responsibility to ensure it remains a vibrant place where people can live, have a family and contribute to the community,” Apple CEO Tim Cook said in a statement.
“Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
Apple plans to set aside company-owned land valued at $300 million to build affordable housing in San Jose, Calif.
The tech titan will also pay for $150 million into a San Francisco Bay Area affordable housing fund and donate $50 million to support the nonprofit organization Destination: Home’s efforts to prevent homelessness crisis in Silicon Valley.
“We’re so grateful that Apple has made this significant philanthropic commitment towards solving Silicon Valley’s growing homelessness crisis,” said Destination: Home CEO Jennifer Loving said in a statement.
“With this generous contribution, we’ll be able to scale two proven strategies for reducing homelessness in our community: the production of more permanently affordable housing for our most vulnerable residents and an expansion of prevention programs that help at-risk families remain stably housed. Apple’s contribution serves as an example of how Silicon Valley companies can work in partnership with the public and nonprofit sectors to address this huge challenge, and I hope others will follow their lead in the weeks and months ahead.”
The commitment is expected to take about two years to be fully realized depending on the availability of projects. Any funds returned to the company will be reinvested in future projects over the next five years, according to Apple.
Apple said it’s also “working to identify private developers who, with the right financing and investment, are ready to start construction on affordable housing projects in the Bay Area immediately.”
Apple’s commitment is more than double that of other tech companies, such as Google, Facebook and Microsoft, that have made similar announcements this year.
Since January, Google said it will contribute $1 billion for housing construction in the Bay Area; Faceboook said will contribute $1 billion toward affordable housing in the Silicon Valley region; and Microsoft has committed $500 million to new housing near its headquarters in Redmond, Wash.
“This unparalleled financial commitment to affordable housing, and the innovative strategies at the heart of this initiative, are proof that Apple is serious about solving this issue. I hope other companies follow their lead,” California Gov. Newsom said in a statement. “The sky-high cost of housing—both for homeowners and renters—is the defining quality-of-life concern for millions of families across this state, one that can only be fixed by building more housing.”
Newsom has recently come under fire for falling behind on his 2017 campaign promise to build 3.5 million homes in the state by 2025. California is on track to issue permits for less than 90,000 new housing units this year—a drop from 104,000 in 2018. Meanwhile state housing officials estimate more than double that amount are needed to meet current housing demands and keep up with projected population growth, according to the Public Policy Institute of California (PPIC).
Over the last decade, California has built an average of 100,000 new housing units per year, lagging far behind the PPIC’s recommendation of 180,000 per year. Newsom’s pledge calls for a housing construction rate of almost seven times that much for the next five years.