
Apple commits $2.5B to combat housing crisis in California - happybuy
https://www.apple.com/newsroom/2019/11/apple-commits-two-point-five-billion-to-combat-housing-crisis-in-california/
======
Traster
This is just so wrong. From a fundamental point of principle Apple's job is to
make phones. The government then taxes Apple and decides how to spend that
money. This is a direct attack on democracy - Apple has successfully lobbied
to remove the taxes that would provide basic provisions like affordable
housing and is now stepping in to choose which parts of the state it wants and
which bits it doesn't. Yet more power transferred to Apple, and 0
accountability.

~~~
mft_
A couple of thoughts:

1\. Apple's 'job' is to do what it needs to do to ensure that its business
prospers. If the housing 'crisis' in the Bay area is a risk to how it wants to
conduct its business, isn't it reasonable that it invests to mitigate that
risk? (This is barely different to Apple making large investments in
manufacturers, to support them in turn being able to supply what Apple needs
to buy from them.)

2\. From what I read and see when I visit SF, and also more broadly in the US,
the government (be that national, state, or city?) is doing a pretty poor job
of tackling housing-related issues - from affordability to homelessness. Can
you directly attribute this widespread failure to a lack of funding, due to
insufficient taxation of Apple and others?

3\. Isn't $2.5bn (+/\- new approaches?) to try to combat these issues better
than $0, irrespective of where it comes from?

~~~
eptcyka
The issue is that the 2.5 billion dollars are not given to the public to
spend. It's just Apple using it's stupid amount of capital to do bank-like
things as far as I can see. From where I'm sitting, they'll still have to deal
with the existing home-owners and speculators who want to maintain the value
of their assets. I don't think waterhosing them with money will necessarily
help.

~~~
Nasrudith
That the public would have that 2.5B is a false assumption even if it is a
complete tax write off for Apple. The money was already theirs for better or
worse.

~~~
caseyf7
Exactly. The benefits largely accrue to the employees of the donor company
rather than the public.

------
douglaswlance
Massive deregulation would solve the housing problem quickly.

When you have demand and you legislate to prevent supply from meeting that
demand, prices inflate and potential buyers get priced out of the market.

Let them build!

------
H8crilA
If only there was a trivially simple policy that is nearly guaranteed to work,
that has worked everywhere it was tried, like removing zoning restrictions ...
If only the most obvious things were possible ...

~~~
bufferoverflow
Complete lack of zoning can suck too. What if I build a chicken farm next to a
nice neighborhood and make it unlivable due to smell?

~~~
Nasrudith
They don't really need that so much as flexible zoning in a "we don't give a
shit if you build an office building, an apartment block, or a blend but you
need to pay to upgrade your sewer and water component to be able to go
higher".

Not without downsides but frankly the current situation is untenable.

------
scarface74
_Nearly 30,000 people left San Francisco between April and June of this year1
and homeownership in the Bay Area is at a seven-year low.2_

This is how things should work, as people leave and/or are not willing to live
in California, employers will start opening offices in other parts of the US.

If cities in California find that they can’t hire enough qualified teachers,
policemen, firefighters, etc., they will have to pay more.

~~~
conanbatt
Fire fighters make 200k, police can make 400k a year.

The one that is getting a relatively bad deal is the foreign population, that
has higher tax rates, lower benefits, no political power and comprise 25% of
Cali pop.

~~~
lkschubert8
I am extremely skeptical of a cop in LA making 400k/year. My skepticism is
supported by the fact the police chief of LA makes 350k [0]

[0][https://www.bizjournals.com/bizjournals/news/2018/11/21/publ...](https://www.bizjournals.com/bizjournals/news/2018/11/21/public-
paychecks-americas-police-and-fire-chiefs.html)

~~~
dougb5
Whenever public sector salaries are discussed in the news, the outliers are
highlighted, never the median or the mean, giving readers a warped sense of
what cops and firefighters make. Sure, some workers put in a lot of overtime
hours and make gobs of money, but the typical salaries are not enough to live
comfortably in the cities that they serve. For example, Glassdoor says the
mean LAPD cop makes $76k --[https://www.glassdoor.com/Salary/LAPD-Police-
Officer-Salarie...](https://www.glassdoor.com/Salary/LAPD-Police-Officer-
Salaries-E135741_D_KO5,19.htm) and the mean SFPD cop makes about $100k --
[https://www.glassdoor.com/Salaries/san-francisco-police-
offi...](https://www.glassdoor.com/Salaries/san-francisco-police-officer-
salary-SRCH_IL.0,13_IM759_KO14,28.htm)

~~~
conanbatt
Glassdoor is less reliable than the actual data the state provides in
transparent california.

Also Glassdoor doesn't count benefits which are almost half the salary.

~~~
scarface74
You can’t use benefits to pay for housing - the topic of the submission.

~~~
conanbatt
Yet you have to have pay the taxes that go to benefits.

------
jamisteven
Mind as well be thrown in the trash can.

------
ptah
Not sure how to feel about this: is this a Good Thing(TM) or is it the start
of feudalism where corporations(as legal persons) become the aristocracy

~~~
qaq
You don't really have to live in SV though. There are tech hubs in US with
much more reasonable cost of living.

------
caseyf7
Apple, Facebook and Google should be investing in new office space in other
regions. They created these problems by hiring more people than the Bay Area
could support. Lots of great talent will move to other places if the jobs are
there.

------
unexaminedlife
I wonder if the real incentive here (for Google and Apple) isn't "civic duty",
but more of an attempt to retain Silicon Valley's reputation as being some
sort of "Mecca" for tech workers?

------
baybal2
I find it so ironic how much convergence US enterprises got with Chinese
business models now.

In China, all and every large company is a real estate company. Baidu has real
estate, Tencent has real estate, Ping An has real estate. Pretty much any
large conglomerate is.

It is almost scary to see how much businesses in China are, in reality, just
front covers for their real estate investments operation.

It remind me a bit the situation in mid-200X America, when every big company
was a bank in disguise

------
austincheney
Housing is generally expensive everywhere in California. I know the Bay Area
is even more expensive still, but pricing is a major concern beyond the local
economy.

If their first-time home buyer assistance eliminates all down payments it
would be helpful. This is what got me into my house as an owner, but then the
total value of my house where I live is the equivalent to half a garage in San
Jose.

~~~
sokoloff
I’m conflicted about zero down payment programs. Obviously, it lets more
people qualify to buy, but I’m not sure that having a lot of people with zero
skin in the game and no demonstrated track record of accumulating savings is a
good thing. What happens when a $5K recurring maintenance item comes up? What
happens when a $20K repair comes up?

~~~
austincheney
You still have to qualify for the home loan just the same as somebody who does
have a down payment. The only difference is a higher monthly rate in the term
amount since 100% of the principle is remaining. A bank's risk calculations
don't change simply because the borrower has fewer liabilities.

To assume home loans are simply given away to everybody because the down
payment is absent is ignoring how the process actually works.

~~~
sokoloff
I _don’t_ assume that loans are given away to everybody without qualification
and I’m unclear where you got that idea from my text.

There are other differences in zero down payment situations. Having (or
wanting) to sell the house in a few years makes it more likely the seller will
need to bring cash to closing (as the lack of down payment makes it likely
that the sales proceeds after commission won’t cover the loan balance). This
can “trap” people in their home, desiring to sell to improve their life in
some other way but forced to choose between doing that with the 7 year short-
sale black mark on their credit report or staying put.

This same phenomenon makes a zero down loan more risky to the note holder,
making it more likely that the effective interest rate will be higher.

~~~
austincheney
Again, that isn't how the mortgage industry works. The increased risk that you
speak of does exist and is an additional charge on the note called Private
Mortgage Insurance (PMI). It is a percentage fee the note holder pays to the
mortgage company for an insecure transaction, such as low down payment. It is
automatic and at set rates and the note holder doesn't get a voice. Either way
the mortgage holder is financially secured.

Interest rate, on the other hand, is determined by all manners of risk
factors, but not so much the down payment. Typically the bank assesses the
risk of the applying borrower using things like employment history, financial
factors, credit history, and other factors allowed by law.

Fortunately, my 0 down situation comes with no PMI and a low interest rate.

~~~
sokoloff
PMI, though often split out as a separate line item and sometimes paid to a
different party, serves to increase the _effective interest rate_ on the loan.

That _is_ how the mortgage industry works.

> The increased risk that you speak of does exist and is an additional charge
> on the note called Private Mortgage Insurance (PMI). It is a percentage fee
> the note holder pays to the mortgage company for an insecure transaction,
> such as low down payment. It is automatic and at set rates and the note
> holder doesn't get a voice. Either way the mortgage holder is financially
> secured.

PS: The mortgage "note holder" is the _lender_ , not the _borrower_. In the
quoted paragraph, you should replace the first two uses of "note holder" with
"borrower". That "percentage fee" is exactly what makes the effective interest
rate higher.

------
mychael
The State of California will squander it all. I hope shareholders respond in
kind.

------
tkyjonathan
I wonder if that money will be purely to pay for lobbyists against NIMBY.

