The company is working with the California government to confront the state's housing crisis. $2 billion of the aid will be split between an affordable housing investment fund and a first-time homebuyer mortgage assistance fund and $300 million Apple-owned land will be made available for housing development. A $150 million Bay Area housing fund will support new affordable housing projects for vulnerable populations and consist of long-term forgivable loans and grants. Another $50 million will support Destination: Home, a nonprofit addressing homelessness in Silicon Valley.
"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," Gov. Gavin Newsom said in a statement from Apple. "This partnership with Apple will allow the state of California to do just that." By one estimate, as NPR recently noted, California must build more than 3 million homes by 2025 to satisfy demand.
Apple is among several other large tech companies to announce they're putting hundreds of millions or billions into solving the housing crisis in their headquarter cities. In June, Google committed $1 billion to go toward the housing crisis in California and Silicon Valley. Facebook followed with a commitment of an additional $1 billion in October.
In January, Microsoft announced $500 million will go toward developing affordable housing and addressing homelessness in the Seattle area, which recorded more than 11,500 homeless residents in 2017.
While the amounts being given are admirable, experts aren't convinced it will be enough to correct the crisis.
“If there’s just someone who steps up and says, ‘Hey, I’m a really rich person, I want to give $500 million to affordable housing,’ everyone will think it’s great — until you actually do the math” Gregg Colburn, an assistant professor of real estate at the University of Washington’s College of Built Environments, told GeekWire.
“This is not a millions of dollars of problem, it’s a tens of billions of dollars of problem,” he said.
Residents in both California and Seattle face tight supply in high-demand areas, which increases home and rental values to the point they often become out of reach for many residents. The median hourly wage for renters in California, for example, is $22.79, but to afford fair-market rent for a two-bedroom home, a renter must earn $34.69, according to the National Low Income Housing Coalition.
“I think everybody is seeing now how the housing crisis is intersected, that it matters that there’s not places to live, not just for engineers, but for teachers, and for nurses, and for people who work in retail, and for people who grew up here,” Kevin Zwick, CEO of Housing Trust Silicon Valley, told GeekWire. “When there’s not enough housing for any of those people, then everybody is affected negatively.”
Additionally, some housing experts worry the financial backing is only the first step, with political will being the second. Governments will have to revisit their current policies to see where the housing gaps are to assist in the housing crisis.
"Our housing crisis exists because almost all the land zoned for housing in Silicon Valley is zoned for single family housing only," Kate Vershov Downing, a former planning commissioner in Palo Alto, told CityLab in an email. For example, in Palo Alto, only three percent of residential land is zoned for multi-family dwellings—the sort of higher-density development that affordable housing developers generally pursue, CityLab's Laura Bliss and Sarah Holder write.
The zoning within Silicon Valley is just one example of the political changes needing to be revisited in order to combat the housing crisis in California. Others include legal battles and “red tape that’s choking development.”
In a statement on Monday, Democratic presidential candidate Bernie Sanders ripped Apple’s pledge, saying in part, “Apple’s announcement that it is entering the real estate lending business is an effort to distract from the fact that it has helped create California’s housing crisis—all while raking in $800 million of taxpayer subsidies, and keeping a quarter trillion dollars of profit offshore, in order to avoid paying billions of dollars in taxes."
Even so, other critics say major tech companies throwing money at a problem is only one part of the solution. “If a company really wanted to make a difference with respect to housing, they'd put money towards supporting local and state level politicians who believe that the path to affordability and environmental sustainability lies in building housing next to existing job centers,” Downing told CityLab. “They'd also back propositions and bills that promise to do the same.”