Hacker News new | comments | ask | show | jobs | submit login
Microsoft pledges $500M for affordable housing in Seattle area (nytimes.com)
338 points by pgodzin 30 days ago | hide | past | web | favorite | 178 comments

Frankly, good. If the Eastside cities can't or won't step up with building more affordable housing and public services, then I'm glad Microsoft is willing to kick in its money. It's a shame that the counties and cities in the region, by and large, aren't willing to acknowledge that this is a regional problem but Microsoft putting up the money at least removes the "but we can't afford the taxes or find the money elsewhere" excuse.

This isn't the first time Microsoft has put its money where its mouth is for its community. They've done a lot for transit in the region, too.

I don't mind so much that they are studiously avoiding the region's most populated city. Not all of the affordable housing and public services needs to be concentrated solely in Seattle. The rest of the region should have these things, from mental health services to public health facilities to shelters to affordable housing. Concentrating them in Pioneer Square around the Union Gospel Ministry isn't the way to go.

The big issue with affordability in the area concerns zoning: https://www.citylab.com/equity/2015/07/how-a-seattle-plan-to.... Right now, you can put a lot of money into affordable housing, but without substantially increasing supply, you are going to raise overall prices.

LA has the same problem with its attempts to "solve" its homelessness problems, which are at their root zoning problems: http://seliger.com/2017/08/30/l-digs-hole-slowly-economics-f...

I completely agree. However, Microsoft can't pour money into changing zoning (at least, not in a direct way like this). We absolutely do need to be fixing our zoning, both in Seattle and on the Eastside. The problem is, it can't just be one city or a few cities doing it. We need the region to pull together. Right now, there's a huge gulf between people who want this to happen and people who are, for their own reasons, vehemently opposed. You can see some of this divide in this very thread, with words like "Seattlized" being thrown around.

Why can't it just be one city? Becoming Manhattan was a huge boon for Manhattan real estate values.

Manhattan becoming Manhattan at first required inhumane levels of crowding, in tenements that would only have a single bathroom per floor. Today’s Manhattan is well below population peak.

Historically that's probably true. These days, we are much richer and we already know how to build high rises.

Homelessness in LA is not a zoning problem at heart.

A significant number of the homeless in LA (by some estimates as many as half) choose homelessness over shelter because almost all shelters in LA have sobriety requirements (meaning no drugs or alcohol).

There are hundreds of shelter beds in LA that stay empty each night because the homeless who would occupy those beds would rather pass out on the street to their drug of choice.

Definitely a tough issue. I understand why they have those rules for shelters, but it also seems like it reinforces the position these people find themselves in. I don't think we can realistically expect all homeless people to get themselves clean prior to getting in to a shelter. It seems like some sort of shelter must come first, and then the substance abuse needs to be addressed with a support system.

I also don't think that is the only issue with shelter usage. In Denver, a common complaint I hear is that they choose the street over the shelter because they feel both their physical safety and their personal belongings are more secure on the street. I also try to think about this from my own perspective and if I was in that situation, I'd rather find a "place of my own" on the street over a shelter shared by tons of people (unless it was really cold out).

If that's the case (not convinced it is) then the obvious answer is to remove sobriety requirements. bonus points for putting safe consumption sites onsite in shelters.

This is an important issue to me, got any sources? Thank you.

Yeah, very different behavior compared to Amazon. I start liking Microsoft a lot recently.

Opinions of Microsoft have been changing in the past few years and I think they will continue to change in a positive way in the next few years. The stock is a good buy.

I disagree. Anything a corporation does they do because it directly benefits them, in this case they get more people moving close to their HQ and it's good publicity. In the case of their Linux support it's death by a thousand paper cuts. Pretty simple.

> I disagree. Anything a corporation does they do because it directly benefits them,

I don't understand why people want corporations to behave like non-profits. It's a corporation whose sole aim is make profit. But that doesn't mean they can't do something for goodwill that actually benefits the community.

> In the case of their Linux support it's death by a thousand paper cuts.

What does this have anything to do with them doing something good for the community?

>I don't understand why people want corporations to behave like non-profits. It's a corporation whose sole aim is make profit. But that doesn't mean they can't do something for goodwill that actually benefits the community.

Because people act like they're altruistic and nice when the reality is that they're not. I'm not gonna suck your dick because you pulled a PR stunt, I don't swing that way.

>What does this have anything to do with them doing something good for the community?

On the surface level more support for linux is good thing, but like all corporate-developed software it eventually becomes bloated and unstable and dies a slow death.

Living in Redmond and Bellevue is pretty nice. So I disagree, Microsoft turned nothing into something.

Your Linux comment seems unrelated.

Are selfless acts the only possible good acts?

I know this will sound very NIMBY, but while I believe Eastside cities should contribute municipal funds to alleviate the affordable housing shortage that is truly a regional problem, I don't know why they need to build those in the Eastside area. The Eastside has, to my knowledge, basically never been a cheap place to live. It was a middle class suburban area that transformed into a very wealthy suburban area with denser parts that are also very wealthy. Maybe some small pockets of people were gentrified out, but what you're talking about seems to basically be just moving the people gentrified out of Seattle into an even wealthier area for some reason. It's also very car centric and spread out, which isn't so great for poor people that don't own cars. Sure the Eastside rail is getting built but that will only cover a limited part of the region.

But of course, like I said, they should still help solve the problem monetarily.

You said it yourself. Why should the Eastside get to avoid having homeless and subsided housing in their backyard? Certainly the employers of Eastside residents have contributed to the rise in Seattle home prices.

Because that’s what their constituents want. Why do they have to get Seattleized?

Because the Eastside doesn't exist in a vacuum?

That doesn’t seem like a valid reason to me. Nothing is in a vacuum - so what?

Eastside cities’ residents want a certain degree of density, safety, cleanliness, etc. They also want to avoid losing the ability to have fast point-to-point on-demand transportation (i.e. driving private cars on roads that aren’t overcrowded), which enables them to live better lives by being able to quickly zip between work/schools/activities at a moment’s notice without dealing with the waiting times and schedules of mass transit.

That’s the lifestyle they have now and the lifestyle they want to sustain. I don’t think that should be demonized - people have different wants and needs, especially if they are raising children.

They also aren’t obligated to make their locale affordable to those who want to move there. After all, we are talking about one of the most desirable places to live, and it shouldn’t be a surprise that it is expensive as a result. Why should that necessitate a slide towards heavy urbanization? I realize some people prefer that denser life and might benefit from it (particularly if they are new transplants) but it’s not for everyone and I don’t think a community is obligated to make accommodations just because others now want to live in a particular location at a price point that makes sense for them. America has many places to live, and jobs are more available than they have ever been historically.

Lastly, cities surrounding Seattle also aren’t obligated to absorb the large homeless population Seattle has, which let’s face it, is enabled by lax enforcement of laws. A lot has been written (and is plainly observable) about the permanently homeless in Seattle who refuse all services and drug dealers operating out of roving RVs. For example take the recently swept Northgate homeless camp - an article I read stated that just one of that massive cluster of campers accepted services from the Seattle navigation team. And recently a lady was pricked by a needle at Northgate mall, not far from this camp. Is it really surprising that people in the Eastside don’t want to welcome the same squalor into their neighborhoods?

Your comment does one thing that has always bothered me during these kinds of discussions: you seem to assume that there is nothing at all between "bucolic suburb with frolicking children and wide, empty roads" and "dystopian hellscape of methheads in RVs terrorizing everyone in a Mad Max wonderland."

I'll also get this out of the way: yes, lots of us in Seattle are well and truly tired of the unsanctioned camps at places like Northgate and the RVs parked everywhere. What we're NOT willing to do, at least not yet, is to slam those people with more arrests and more trips through the criminal enforcement system prior to having services in place that will cover a high percentage of needs. (No, our existing shelter system, whether within Seattle or without in the suburbs, does not meet this requirement.) That's mostly humanity but also because the Court of Appeals for the Ninth Circuit says that it is unconstitutional to run someone off from a place to sleep if there are no alternatives and "you must be stone-cold sober in order to enter this shelter" doesn't work for people who are addicted. (That's one reason why the region needs places like needle exchanges and substance abuse centers. Why shouldn't we concentrate them all in Pioneer Square? Well, for one, because the "junkie homeless" are already in places like Bellevue, sleeping out of their cars and scrounging for food, but they camouflage it better.)

Now, as to my original rebuttal. There's a huge need for missing-middle housing in this region. You know, for the people that serve your coffee, deliver your groceries, educate your kids, clean your parks, and paint the lines on those untrammeled roads. The people making well under six figures who shouldn't have to drive for two hours or live beyond the reach of public transit just to get to a job where someone making five times their salary can look down on them for not living in a "good place." That's the kind of housing Microsoft proposes to kick into gear here.

We need all kinds of these services because it's humane and it's fiscally and economically prudent to not sprawl all the way from Bremerton to the Tri-Cities.

> What we're NOT willing to do, at least not yet, is to slam those people with more arrests and more trips through the criminal enforcement system prior to having services in place that will cover a high percentage of needs.

Frankly, you just sound uninformed here.

Look at the Northgate encampment — 100% were offered services, 90% rejected them to remain dangerous vagrants spreading disease.

Until you accept that a component here is willful vagrancy and criminality, the problem will get worse.

No amount of money can fix your denial of the problem, and your position isn’t one of compassion — it’s an abdication of any responsibility: in blindly throwing money while abandoning the rule of law, you’re not helping the vagrants, you’re not helping the non-vagrant homeless the vagrants prey on, and you’re not helping the regular citizens that are getting assaulted or stuck with needles (such as that lady at a Northgate).

You’re the problem.

I want you to answer me honestly: when I was homeless, did I deserve to be assaulted by other homeless people while the police refused to do anything because you personally feel bad a vagrant might get arrested?

That’s the system you’re advocating for.

And it’s the definition of immoral baizuo policy.

Look at the Northgate encampment — 100% were offered services, 90% rejected them to remain dangerous vagrants spreading disease.

LA has the same problem -- for a lot of the homeless, it's a wilful choice to remain on the streets.

Things have gotten really interesting as we may have gotten very lucky with the timing of the housing market - but I totally agree.

I think most of us don't want this to become a place where normal, non-insanely rich people can live.

For whatever inaction the typical eastsider(sorry, I love you all) are commited to, its great that someone, even Microsoft is doing Something.

...methheads in RVs terrorizing everyone in a Mad Max wonderland.

Actually the working title of the next one is Max Max the Wasteland.

But it might not get made anytime soon.


> I don’t think that should be demonized

You left out the part where y'all scream and cry nonstop about the 520 tolls, toss massive amounts of cash at fighting the potential I-90 tolls, hold up and stall mass transit (mostly via the massive stacks of cash mentioned previously) that could _potentially_ travel over these routes and bring "bad" people to your utopias, oh – and also want to host an NBA team.

You don't get both. The eastside wants all of the perks of being a large(r) city, with none of the less desirable components. Meanwhile, you travel over the bridges you attempt to regulate so heavily, into our city, to collect your paychecks and claim the name 'Seattle' (because nobody knows the name of your city) and then spend your evenings writing nonsense like this.

The eastside is trash.

> The eastside wants all of the perks of being a large(r) city, with none of the less desirable components.

Doesn’t everyone? Who actually wants the less desirable components?

If the suburbs don't build their fair share of housing, then workers who work in the suburbs gravitate to the cities, gentrifying them and driving out longtime residents.

Legal or not (and it is becoming less legal in places like California), it's a shitty thing to do.

The eastside was rural until a few decades ago. Like, farms, cows, trees. It being expensive is a recent phenomenon.

Even Bothell had a major GTE Mobilenet (now Verizon) site 30 years ago.

One thing I didn't see you address is where you think affordable housing should be built. Do you have any thoughts in this regard?

Up. The sky is the limit.

By areas with high density and good transit. So, mostly Seattle and the Western/Central part of Renton, also Downtown Bellevue and Downtown Redmond. Last time I drove around Georgetown I noticed lots of unused space, maybe there's a reason a lot of affordable housing hasn't been built there, but it seems underutilized if it's not actively being developed for affordable housing

I'm not in principle against low income people living on the Eastside. In fact, I think most of Bellevue, Kirkland, and the area surrounding the Bel-Red corridor should be upzoned and get more infrastructure - then low income people could actually live there

I don't think we'll see them in downtown Bellevue anytime soon. Too many "Homeless Shelter Yes, Eastside No" signs next to the roads on the way in. I'm just a transplant and won't be here forever (10 years so far though), so I have little stake in the matter, but it seems clear most people on the Eastside want it to keep being "nice" even if that unfairly prices people out. I like things "nice" too and appreciate the car culture here. Of course I might be mistaken and the Seattlefication will continue. I have a friend who thinks Bellevue's about 10 years behind Seattle in things, Redmond another 10 years behind Bellevue, maybe we'll see Issaquah become the new Redmond.

There are homeless in downtown Bellevue. Yes, nothing compared to Seattle but I see dozens of homeless each day. I've gotten to know some and they take the 550 to get away from the camps in Seattle.

The bigger density (building up) I’m told is capped by air traffic of Boeing Field.

Only renewing and building up economically depressed places is a huge issue of gentrification and inequity. Why should it be so that only the poor should be radically impacted by necessary city changes? A really prime example of this is NYC construction post-war where robert moses demolished many homes of people of color to build various highways or in the bay area where the construction of above ground bart majorly impacted the overwhelmingly black section of west oakland. I'm not saying that we shouldn't build transit, or new construction but to only build it in economically depressed areas - which are often ghettoized places for ethnic minorities - seems fairly wrong.

This seems to be a major part about why many people who are advocates for the poor have an issue with new construction - because it results in displacement of people who can't afford it

>what you're talking about seems to basically be just moving the people gentrified out of Seattle into an even wealthier area for some reason.

So it's making the wealthy pay the price for the zoning policies and real-estate speculation they created.

I'm in Woodinville. The northern east-side has a growth moratorium due to lack of road capacity.

I'm not sure if road expansion is voted down or some other issue, but I'm glad there's no growth until then, as there are some pretty terrible traffic conditions in the area.

Taking that express bus from downtown Seattle to Redmond which had free wifi was awesome the first time!

They really should use the money to instead build more remote offices, where housing is already affordable, develop the technologies/processes to support that distributed culture, invest in making those other cities more livable, and thereby bring economic opportunity to a more diverse set of cities/cultures.

I am personally not in favor of more density here because my lifestyle, and those of many I know, is better suited to the lower density we have on the east side. The balance we have now is one of the main reasons many of us choose to live here, in the PNW. It feels to me like this growth will be good for new transplants at the cost of those who have made a life here already.

Cities change. Populations swell and subside. It would be nice if the places we hold dear could stay the same as we have always known them, but they can’t. If that is what you’re after moving farther away from urban centers will be the key.

> They really should use the money to instead build more remote offices, where housing is already affordable, develop the technologies/processes to support that distributed culture, invest in making those other cities more livable, and thereby bring economic opportunity to a more diverse set of cities/cultures.

You're absolutely right! That's a very real set of problems and a very desirable set of goals you've correctly and wisely identified.

With that said, is this something that companies are best positioned to address? Do we think Microsoft, Google, Amazon, and Facebook will do the best job possible at building out the smaller, more affordable towns to achieve your laudable goal of increased opportunity and geographic diversity? Could it be possible that there might be other structures, already in place, better able to address this problem? Perhaps in ways that are already designed to be democratic and participatory? Do we want corporate behemoths pushing Seattlization on whichever smaller, more affordable location they choose?

Again, you've rightly and wisely identified both very real problems and very real solutions. There just might be some room for nuance around implementation.

I grew up in a sleepy coastal SoCal town where it wasn't too expensive. I have the best memories of that time, but they're gone. The house I grew up in was $73K when my folks bought it, now it's over $1M because it's 2 miles from the ocean. As much as I'd love to move back to the area, there's no way for me to financially. And the place has changed as well.

Trying to keep a city or town "preserved" is impossible.

I'm guessing you're a transplant too. Native Seattlites don't want you here either and would prefer the PNW to be a lumber, fishing, and shipyard town. /s

They are also doing that. Azure is ~30% remote employees for example. There is still a lot of room for improvement but there are way more remote employees than just 5 years ago.

Here's how the money is being used (somewhat vague).

"Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region...the remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction."

Here's the projected impact (also somewhat vague).

"The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”

Here's the need: "Seattle region needs 156,000 more affordable housing units [today].and will need 88,000 more by 2040 if the region’s growth continues."

I'd much rather see Microsoft (and Bill, Steve, the estate of Paul Allen, etc.) pay more in taxes to the state of Washington and have that affordable housing built that way, but this is better than nothing. Good on MS.

> pay more in taxes to the state of Washington and have that affordable housing built that way

I got lost in the middle here -- does more taxes being paid to the state of Washington directly contribute to more affordable housing being built in Seattle?

The closest thing I could find was this: https://www.commerce.wa.gov/building-infrastructure/housing/...

I think part of the sentiment is it's undemocratic for the wealthy to dictate how this money is used. It's better for our political representatives to determine how to solve our problems (ideally with expert involvement). Not some rich guy do-gooder with maybe particular notions.

You're spot on. While paying more in taxes helps, setting aside the money for a specific purpose and not funneling through the government ensures that it goes toward the cause being supported.

Taxes are distributed at the government's discretion so it may not necessarily combat the issue at hand.

WA has no state income tax (corporate or personal), so I can only assume GP's wish is for Seattle to get its way and impose its own income tax despite being against the state constitution. While we're wishing maybe we can go a step further and liberate/extricate Seattle as its own sovereign city-state, or at least as something on par with full-fledged states like Wyoming that can make decisions independent of other states if not independent of the federal union...

I can only assume GP's wish is for Seattle to get its way and impose its own income tax despite being against the state constitution

Nice strawman! You're a bit off, though. My wish is for the state to create an income tax. I think it's absurd that we have such a regressive tax structure in this state.

Thanks for clarifying. Can I convince you to change your wish to what I originally assumed and limit it to Seattle? A lot of us transplants in the area are here in part explicitly because of the tax incentive, I assume a lot of natives are too since they started it that way.

Lots of natives are worried about how they're going to continue living in Seattle and the surrounding areas given that one of the few mechanisms that local governments have for raising revenue is through regressive tax schemes and property taxes.

That doesn't encourage anyone to put down roots. That's not healthy for the area. If taxation really is your primary concern, then I hope you choose to leave and move to Wyoming at some point.

Texas does just fine without an income tax. The idea that natives are “worried” is nonsense. I live in California now where plenty of natives are worried because of how high taxes are. It seems bizarre that Seattle “natives” are actually worried because there aren’t enough taxes. That’s a strange crowd. Here is a spoiler: with an income tax, property taxes don’t get lowered, New Jersey has incredibly high property taxes and an income tax. Left leaning governments never, ever met a tax they didn’t like and want to expand. The idea that a Washington income tax would lower property taxes is just a fantasy. An additional tax just inspires politicians to spend more.

One of your sibling comments asked whether this was good or bad. This is the pragmatic answer.

I wish the problem was being solved the way I think it should be solved, but I'm still happy it's being addressed. "Don't look a gift horse in the mouth" applies; we should encourage good behavior rather than taking the chance to be mildly upset about incentives and taxation and all the other angles from which one can be mildly disconcerted by the situation surrounding the action. I'm lacking an idiom here, but I feel like what I want is something like "snatching defeat from the jaws of victory" but for mild disappointment and good news, instead.

It's so much better when our elected officials build housing with tax money:


This assumes the tax money would be used for this purpose instead of hundreds of other things, whereas their current action is reserving money directly for the housing.

I'm not anti-tax, but I do realize tax money is often misused or poorly used, or simply used for things other than what we'd hoped it would be used for, and I don't see that being avoided here

Is it a good or a bad thing when multinational corporations step in and take the place of government?

It depends. Do you believe that it is the role of government to build new housing or is it their role to create an environment that encourages new building supply? Is new housing not being built because of government regulation that deters new building or certain types of buildings?

Even though Microsoft is funding this project, the government is definitely still involved. The credit will (& should) obviously go to Microsoft since they're shelling out $500M, but there's definitely a lot of hard working honest peeps from the Govt. that will be helping as well.


I think in places like SF or Seattle it’s a combination of government regulation and zoning rules, and idle capital. But at the same time I don’t see why government itself can’t invest in building things like transportation infrastructure to support the increased density (assuming density is something we want - I’m not entirely convinced it is).

Over the last few decades the default state appears to have been “build up” rather than “build up where needed, and out where you can”. Cities from previous iterations of civilization appear to have done the latter, while we mostly just do the former here in the states (over recent decades). LA could maybe be considered an exception, however it’s zoning rules are draconian and density seems to be the way forward less some major overhaul.

While the rate has decreased, "sprawl continues to be pervasive and continues to increase" in the majority of US metropolitan areas, and "2010 represents the first time that more people lived in lower density than higher density tracts in metropolitan America": http://digitalcommons.lmu.edu/cgi/viewcontent.cgi?article=11...

Seattle is in the midst of one of America’s largest transit expansions, to spend $50B+ in 40 years. Pretty much all cities are aggressively zoning around their light rail stations; for example. The suburb of Lynwood has zoning allowing up to 350 feet in height around their stop.

The problem is that these things take time, mostly because this isn’t China and Seattle doesn’t have hundreds of billions in Treasuries to do what it wants, nor is it willing to conspire using shady financial vehicles like Chinese local governments.

Bad- when times get bad (recession) companies will stop doing these things. If people rely on them for important services (like housing), then they'll be even more screwed.

And depending on who is running the government, the government won’t help people who need it either...

It's a bad sign. It's a sign the gov has dropped the ball. Government should be doing this. This is their job, it's in their purview to account for growth and address it, one way or another, but not ignore it or frustrate it.

Perhaps not an opinion shared by everyone, but even Khrushchyovkas would be better than a housing crisis. Affordable housing is a basic need. Building these in scale would lead to a lot of other problems, but if a city is otherwise incapable to accommodate people, then the city gets those other problems.

Tell that to the city of Gyumri, Armenia. https://www.youtube.com/watch?v=GXDDW9WYrWE

Bad. We’re going from an institution which - at least theoretically - the population has some say in, to one which is completely privately owned and doesn’t have to answer to the public at all.

Not only does it not answer to the public, it goes a step further-- one that can be sued by it's shareholders if it acts against their interests (ei, yield a profit).

They still have to abide by the laws set by the public institution.

That’s true. But there are fewer of these regulations and they’re very large powerful entities only interested in profit.

If this was the Bay Area, I would be inclined to worry, but the governments of Seattle and the surrounding towns, while far from perfect, are not nearly as dysfunctional as San Francisco's. We actually are building tons of new housing, areas are getting upzoned to allow denser construction in areas that previously only allowed single-family units, and there is lots of investment in public transit (i.e. ST3). This seems more like Microsoft chipping in to help out even more, rather than taking it upon themselves to fix a broken government. (Although see my other comment regarding how useful this can actually be in practice)

Good - reacts quicker to market demands and is directly incentivized by opportunity therefore creating jobs.

Nothing implicitly makes a government faster or slower than a corporation. Corporate charters are practically franchised private statehood where your voting public is your shareholders and they elect a board of directors to represent them. If your corporate charter can be "quick" then so can your constitution.

And governments are absolutely incentivized by opportunity. The prosperity of the people is their entire job. Its why you have a state to begin with. If its unable to fulfill that objective, get a new government.

In order to be quick you have to be properly incentivized. I disagree that the prosperity of people is a government workers job by choice; thus they won't be incentivized to outperform a corporation. I'm sure there's people that do care about that, but it's certainly not the majority and directly defies individuality.

This depends on local context. For example, in Singapore civil service has much higher prestige and merit based pay, thus the Singaporean government is one of the most effective in the world.

Yeah, there's definitely room for inspiration and improvement. Looking forward to innovative structures that let us evolve more efficiently.

I say it's usually good. I think government is usually the most expensive, highest overhead, least competent, and lowest quality way to get anything done.

> I think government is usually the most expensive, highest overhead, least competent, and lowest quality way to get anything done.

Do you have concrete examples? Everything I can think of points to the opposite.

The Department of Defense is probably the canonical example.

But closer to the topic, look at the government housing programs. Billions of dollars to build housing projects that do effectively nothing to lower the overall market price of housing, while creating slums by concentrating poverty in specific locations, while actively making the actual problem worse with zoning rules.

> The Department of Defense is probably the canonical example.

Because they outsource to a bunch of private contractors, no?

> Because they outsource to a bunch of private contractors, no?

No. The government contracting process is as broken as anything else, but hurry up and wait, FUBAR and SNAFU did not originate at Lockheed Martin. We don't have major military bases in states with powerful legislators because that's what makes the most strategic sense from a military perspective. The VA healthcare system is not a disorganized mess primarily as a result of contractors.

It's a systemic issue with any large bureaucracy, which is why small and local governments are more efficient than large and centralized ones. It's also why small and medium businesses are more efficient than huge conglomerates.

And there is no bureaucracy larger than the US government. People like to compare their cash on hand with Apple's, but governments don't hoard cash like corporations do (and corporations only do it because of dumb tax policies). The US federal budget is around six times Apple's market cap, much less their own annual budget.

Large non-government organizations often have similar attributes in my experience.

Concentration of power is always bad, no matter where that power is concentrated.

Depends on if you have to pay rent with company scrip.

Good for short-term results, bad at the degree to which it indicates our institutions are ineffectual and broken. America is a rich nation, Seattle is a rich city. With reasonable taxation and competent government we could easily maintain decent metropolitan infrastructure and services (mass transit, schools, clean water) as well as provide affordable housing, food security for everyone, etc.

It is bad when government is so bad at it's job that it requires companies to do it, yes.

But it is a good thing that someone is solving the problem.

Usually a good thing. Multinational corporations are typically run very well compared to anything local.

See https://www.econlib.org/archives/2016/05/multinationals.html for a comparison of multinationals' management to local companies. I don't have stats for local government on hand, but anecdotally, it's common for it to be even worse than local companies.


Not sure why you're getting down voted but it is bad because the government is not doing this and we're accepting it.

I would wager that it's because there are folks who applaud the private sector for stepping in on a big problem. I would argue it's a general positive when we don't have to rely on government to solve all of our problems.

But now we're relying on Microsoft to solve our problems. How is that any better?

Because nobody is being forced to fund it, as is the case with the state. And the state would staff the administration of the new construction with pensioned state bureaucrats, whose pensions are already bankrupting California. Unfunded state liabilities from pensions are somewhere between 333 billion and 1 trillion, depending on who you ask.

And then once constructed, there would be forces wholly removed from the natural demands of the population, as represented immediately by the encompassing markets, determining how the housing is to evolve over time.

People should be much more reserved than they are in terms of handing things over to the state, there is much to be lost.

> whose pensions are already bankrupting California

That is not true. California has a budget surplus right now...

Something might actually get done

> might

Exactly. Why put our eggs in MSFT's basket?

Because the expectation on HN is that you won’t make content-free posts.

It’s not a poll. One is expected to answer “bad, because...”, as you did.

I tend to agree, but also take the opinion that if the comment above had expanded on this, the reaction wouldn't be as negative

The US Government is currently dysfunctional, so at least someone is making affordable housing.

Depends on whether you prefer to live in Soviet bloc housing or not.

It is always a good thing if something can be solved directly by the citizens without the use of force, i.e. state intervention. It is indicative of a prosperous economy, and possibly of high social capital and cohesion.

The proper use of the state should really only be as a reluctant override meant to address explicit market failures, such as monopolies and collusion and negative externalities. Unfortunately, that isn't the way that most people view the role of government anymore, and are increasingly content to see it as a consequence-free button for moral authoritarianism.

At least in SF, I don’t think financing is the issue. The city blocks projects that developers are begging to develop for years and create additional loopholes that allow NIMBYs to stall projects. At some point projects are stalled for so long that the cost to build increases so much where the project is not a good investment anymore and the project is abandoned.

In SF, they just make affordable housing illegal to build in most of the city. In fact, they just ban all new apartments: https://sfzoning.deapthoughts.com/

No apartments, no affordable housing.

Can pouring money to buy housing possibly lower prices on housing? I want to understand, because it seems to me that supply and demand works some other way.

Perhaps increasing supply by developing tech or fighting regulations will be better way to spend money

From the article;

It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

Microsoft are increasing the supply of affordable housing by literally paying to build affordable housing. That increase in supply might lower prices, or it might just attract more people to the area and raise demand as well. Either way it makes the area better for Microsoft and its employees.

This will create affordable housing for the same reason Bill Gates philanthropic initiatives create a cheap labor force for Microsoft.

Those sorts of issues can be very different depending on the specific market. In some places, the biggest issue for affordable housing is just getting more stock built within the right price bracket.

Eg, a city might have plenty of large detached houses, and expensive high-rise residential buildings but not enough of the more affordable type of buildings like "low rise" developments of 60-100sqm flats.

For analogy, imagine a world with plenty of iphones, but not enough cheap androids. A €200 phone is a decent phone, affordable and €200 is a viable price for the OEM. Subsidies aren't required. For phones, these market conditions guarantee that the supply will be sufficient. In real estate, they don't.

Markets like this will tend to show really price/sqm at the lower end, relative to the higher. Eg a fancy, 250sqm house costs just 2x of an old 65sqm flat even though land and building costs are the same per sqm.

from the Seattle Times version of the article: $475M for loans to housing developers over three years and $25M for resident services

Link for reference: https://www.seattletimes.com/seattle-news/homeless/microsoft...

From that article:

- $225M of the $475M will be loans below market interest rates, directed at middle-income housing.

- The remaining $250M of the $475M will be loans at market interest rates, directed at low-income housing.

Other than optics, I'm not sure what the point of the $250M in market-rate loans is. I'd think that the main constraint on the development of low-income housing is that it's unprofitable, not that it's difficult to secure financing.

Financing is a pain to put together.

problem though is that even though moderate priced housing pays tremendous returns stupid developers will always chase luxury because they can do stupid well. The fact that M$FT will make money off this doesn't stop it from being a tremendously valuable step for someone who happens to be housing insecure in sea-tac

What's this 'tac you speak of. Tacoma is outrageously cheaper than Seattle. 'tac don't have a problem compared to sea'.

"SeaTac" is the common name for the airport and also the City of SeaTac, Washington, located next door to Burien.


I've lived in WA all my life. I know where seatac is. The problem isn't in seatac, it is in Seattle proper. Seatac isn't the correct choice of words. Seattle is. The Tac' of seatac refers to Tacoma and yes I'm playing a game with etymology. The problem is in Seattle, but not if you go south.

> The problem is in Seattle, but not if you go south.

Tacoma has an average home price of $350k. That means, to afford an average home/condo/apartment, you'd need over a $100k+ salary per year. (Using the 28/36 rule). But the average income per person in Tacoma is ~$37k/yr.

That is absolutely a crisis-level problem of massive proportions.

The only way anyone can pretend those prices are even vaguely reasonable, is by comparing it to somewhere like Seattle where the crisis is so much worse.

As great as it is to see this kind of corporate responsibility and acknowledgement of the downsides of local growth, it's not clear to me how Microsoft is supposed to help here. High housing costs are a nasty example of a particular social problem where throwing money at it just doesn't work, even if you're willing to completely take a loss on your investment. To my naïve analysis, if Microsoft just pledges money to build a bunch of housing units, then that throws a wrench in supply/demand, other people pull back on construction to match, and we end up right back where we started. I'm sure there are higher-order effects and the reality is more complicated than this, but I also don't think it changes the fundamental picture much. How is Microsoft supposed to help make more housing available without other developers just canning their own projects and leaving zero net change?

Nearly all of the regional variation in construction costs is attributable to differences in labor costs. This can create a self-reinforcing upward spiral in home prices [0]:

> Inasmuch as it means that those working in the construction trades are better off, construction wage growth in the expensive coastal cities is a welcome development, which ought to be celebrated.

> However, construction wage growth could also be part of a dangerous, self-reinforcing cycle. Rising construction costs tend to reduce the supply of new housing because they shift marginally-worthwhile residential development into the red.8 This helps raise housing costs, which in turn feeds back into construction wage growth for at least three reasons:

> - When housing prices rise, workers require greater compensation to subsist.

> -When housing prices rise and the supply of homes is smaller than it would be otherwise, it is harder for people to find suitable homes for sale (and to afford them). This creates a greater incentive for renovation, which exerts upward pressure on labor costs as suggested earlier.

> -When housing prices rise, the pool of potential home buyers becomes more financially select, which likely corresponds to higher expectations with respect to homes’ level of finish.9 Once again, this means that more renovation is bound to take place (including home-flipping), exerting even more upward pressure on labor costs.

A one-off influx of affordable housing could potentially break that cycle by enabling tradespeople to move to the area. I'm not sure that Microsoft's investment is significant enough to have that effect given the existing deficit in affordable housing in the Seattle area, but the theory's there.

[0] https://www.buildzoom.com/blog/whats-up-with-construction-co...

Are they going to be the landlord, or even arms-length invested in the landlord? Or, are they agreeing to fund metro and county housing initiatives which have public boards?

I'm not in favour of the former, I prefer the latter, but I could believe its a conversation about "how" and "what works"

It'll be interesting to see how this turns out.

Housing is so short and expensive anywhere near Microsoft HQ that it's a significant factor in hiring. I'm a bit surprised that such corporations don't build dormitories near their campuses suitable for interns and singles.

they would love to. zoning.

I won't claim to know what incentivizes developers to build, but below market interest rates for construction seems like a tiny factor in whether a private developer would choose to build affordable housing vs market rate housing. Does anyone know if this difference in interest rate would actually make it more worthwhile for a developer to build low cost housing vs market rate?

How does this work?

Buy/build houses and sell to eligible buyers for less than market? Rent at less than market? How does eligibility work?

Is arbitrage a problem?

My first questions exactly.

Renting out but giving a more discounted rate the poorer the tenant is probably the only sustainable approach to keep them having a home as living costs just keep rising. Of course, the discount should gradually dissolve as the tenants get better paid jobs to avoid someone moving in poor and keeping the same flat after ten years of career development. Getting raises or better paying jobs would pay off but rent would just eat a bigger portion of the monthly costs until they would be on par with market rates.

Question: what is MSFT's downside? I guess very little, or close to zero. Unless someone commits downright fraud (i.e., take the money and don't build anything--but no one will let them do this.)

They 'funding /financing buildings, maybe at lower rates than banks, but then MSFT has so much that a lot of it must be making close to 0%. So they solve a problem of theirs since MSFT is there for the long term, get excellent press with virtually no risk. If they default, MSFT might end up as building owners. Hire someone to manage and sell them when time is right. Maybe lose some on taxes and management fees but that is nothing, relatively speaking.

Zoning is one of the big culprits for affordable housing. I'm curious if it would be productive for companies to target zoning laws or if it would create a counter productive backlash.

I grew up in Houston and I never heard the term “affordable housing” until I went to New York. Houston doesn’t have zoning, nor does it have a housing “crisis.”

Houston also sprawls into the horizon.

Just build dorm style apartments for most of your employees and be done with it. Studio apts.

Build an employee mess!

Better than to send the mess to the rest of the public.

Like an apartment complex can be required to build parking,

tech companies should be forced to provide at least xx% of housing for employees. Just as they bought the land for offices, let them buy land for apartments. Cost of doing bidness :)

Pay more corporate taxes instead and let elected people decide how to spend it for public services?

Bit hard for them to decide when they are all on a 1 month forced holiday.

State and local governments aren’t on a holiday and that’s where these types of decisions ought to be handled.

Seems to me like a job for the government. And half a billion is a drop in the ocean.

Meanwhile crickets in the bay

Door key rehash&software updates: 1 hour lock-in midday next Tuesday

more of this!

This is great and all, but part of me is really cynical about corporate philanthropy like this.

First off, all but $25 of the $500M will be loaned out to developers at below-market interest rates and the other $25 will be donated to related services. Good on Microsoft for committing capital that could be put to other uses, but this isn't a donation; it's philanthropic lending. Depending on the interest rates of these loans, they'll wind up keeping much of that principle. Yes, people will surely benefit from this, but this looks really conservative for such a headline.

Corporate taxation is a hot-button issue these days, but one can't help but notice how easy it is to shun government for being wasteful in providing housing services while private industry is being applauded to essentially buy the process of welfare. And while there are heated debates about what major companies should contribute (or avoid contributing) in taxes, can we even agree that affordable housing sponsored by private money is a little contradictory here?

It's potentially an interesting demonstration of how keeping an area capable of housing low-skill workers can be beneficial to keeping their own high-skill workers' neighborhoods staffed with those low-skill jobs.

Something I always find really interesting, as a San Francisco resident, is that people seem to think that the market is incapable of resolving the problem of the purported loss of low-skilled workers to act as the baristas, servers, deliveries, etc, because rising cost of living drives those people out. But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city. Now, maybe this is yet an alternative to the more straightforward equilibrium, wherein some of the employers in the city begin to provide lower-skilled workers with housing for the benefit of their own workforce.

I have no idea what Microsoft's motivation for doing this is, but it would be an interesting possibility.

Also, providing tax-funded low cost housing as a community to make sure you don't lose your regional baristas and cooks is basically a tax payer subsidy to keep eating out affordable.

if eating out becomes unafforadble, many jobs and countless hours of leisure will be lost. No one complains about making flying affordable with billions of dollar in aviation subsidies, from R&D, Airport and related infrastructure maintenance, to straight-out bailouts.

I am not making a case against affordable aviation, but rather giving an example of the fact that many aspects of society is simply not directly-profitable but necessary for a healthy economy and community.

The correct solution in that case would be to give people cash, so that the subsidy is properly accounted for, otherwise it will be lost to corruption via various accounting tricks and games that politicians and vendors can play, and taxpayers will never get a true picture of their government (as is the situation now). See defined benefit pension benefits in lieu of cash pay.

> But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city.

In an economic fairy tale, sure.

In reality, what happens is that people working low-income jobs end up with a two and a half hour commute from half-the-state-away, or, alternatively, living in a slumlord's idea of a barracks. Or, sometimes, both.

It's a 'solution' much in the same way that in the Soviet Union, people would 'solve' the problem of toilet paper shortages by joining the Communist party, which would entitle them a subscription to Pravda.

The wealthiest country in the world can, and should do better.

It does NOT take an economic fairy tale to determine precisely how the situation plays itself out.

For example, it's not as though the occupants of SF are going to be satisfied living in a city without access to bars and restaurants, no matter how wealthy they are. There are bars and restaurants in SF as it stands, are their staffs all living in subsidized affordable housing? No. For one, they simply get paid more than outside of the city, because things cost more. They get larger tips because people make more money, and have larger bills to tip on. While some might be subsidized with rent control, others live with roommates, or they live outside of the city. There are any number of circumstances they find themselves in, but the point is that it is worth it to them to be able to work in the city. If it was not, they would not work here. And if they did not work here, their wages would go up in order to fill the demand. And let's take this even further. What if their wages go up so high that the drinks and food begin to cost a very undesirably high amount to the residents? Well then, that begins to affect the desirability of living in the city. Suddenly less people want to live here, because the cost of living is so high. And when less people are competing to live here, rent starts to go down, and so do wages, and prices. The entirety of the system is in stabilizing flux as a consequence of this.

If we're actually arriving at situations where people are making a two and half hour commute as a consequence of them having no alternative options (which is not the same as them making the commute because of better opportunities), then we agree that we're no longer dealing with a viable model. I used to do a 1.5 hour commute each way, every day, for over a year, because it was worth it to me to live in that particular area rather than being closer to my work. If what you're suggesting is that their only options are effectively capable of exploiting them due to no alternatives, you're effectively describing an overall employment crisis. Given a system-wide lack of employment opportunities, which is certainly not the reality we currently find ourselves in, then we surely agree that there is an appropriate role for the state to fulfill in mitigating the situation. But that still doesn't mean that we agree that affordable housing is the correct mechanism for addressing this problem, which we surely do not.

I agree with this but I think it underestimates how far the central bank's printing of money can push us out of equilibrium. Also, the ability to create real value is harmed by regulations like labor, zoning, and health codes.

One thing that I haven’t really seen explored much is how much influence real estate investment from foreign companies influences housing costs in places like this. I don’t foresee it being an overwhelming influence, but I can’t help but wonder if there’s a crowding out effect going on where a decent percentage of housing sits idle, or not in use by people who actually work in the area.

Edit: meant to say “foreign countries”, but the point is the same.

" the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city." - This is what should happen in a true free market. But the real world has zoning laws, building restrictions, slow and unreliable public transport and NIMBYs who will oppose any housing projects. That can make it impossible for new workers to meet the demand.

Here's another take: possibly the loans are not just below market rate but loans that traditional lenders wouldn't make at all. "Affordable housing" is high risk housing because the buyers/tenants are lower income. If this fund will make possible projects that could not get financed otherwise, then it's a good deal for everyone.

If it brings the price of housing down, then it’s good. If it gets a bunch of people into loans they can’t afford at the top of a record bull market, then it’s bad

They aren't giving out mortgages for single family homes...

> The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

Yes, but to be affordable at least at first there has to be a subsidy for those middle income people to be able to afford it. Either you directly pay developers their profit that they don’t get by charging market rates (a subsidy), or they allow earners to get loans. Median price is 900k on the east side, and even at the top of middle income (124k, family of four) you can’t afford a house anywhere near that median. How do you fill that gap?

Because they're not building single family homes in Medina? Multi family housing in various parts of the metro (including Snohomish county). The Seattle Times has more information including a bit more about geography:


The key is zoning and it sounds like they have some local buy-in from politicians (see the attached statement of mayors in that article). I'm skeptical that happens, NIMBYs have a way of stalling up zoning, but it's a still a step in the right direction.

Sub-prime mortgages! What could go wrong?

These are almost the opposite of sub-prime mortgages.

A sub-prime mortgage is made at market rate--at an unaffordably high rate as a result of the risk. These are below-market rate loans -- loans at affordable rates for the borrower in spite of the risk. The in-spite part is what makes this philanthropic.

When the only party that has exposure is a large corporation for whome the money is a drop in the bucket, not much could go wrong.

FWIW, I completely agree. It is super frustrating that our local governments here, outside of Seattle and a handful of efforts elsewhere in the region, won't make the investments that are needed.

But we need those investments, somehow, and I'm willing to let private businesses make them while we also have the public debate over getting our governments to get moving.

Absolutely. This isolated charitable act does not undo the concentration of power arising from structural advantages benefiting corporations. It is merely a corporation granting a largesse.

When a politician pushes for affordable housing, what is their motivation? We'd like to imagine it's altruistic and ideally in some cases it is. But in practice, there is near invariably a major political motivation. The 'job' of politicians is to accumulate votes, which lets them stay in office. And so the outcome of spending directed towards housing is, from their perspective, going to be measured in terms of the accumulation of votes. For one of the most clear examples of this, the Civil Rights Act was championed by LBJ. LBJ was for his part an overt and outspoken racist [1]. I mean a real and genuine racist, not somebody making politically incorrect comments here and there. But he felt that passing the Civil Rights Act would work to his, and his party's, political benefit.

The reason I mention this is because I think you need to consider motivations when determining which system is more desirable. What is Microsoft's motivation? It's not the short term gain of capital, since they could earn more elsewhere. And it's also unlikely to be an extremely long term purpose, since those aren't the sort of ideas shareholders often look too kindly upon. I think it's probably similar to what somebody else mentioned. They want to ensure there is a stable supply of low-skill low-earning employees that can provide affordable labor for local companies (including Microsoft) and for their employees. And they're looking at achieving this in the not so distant future.

I find this motivation much more desirable, since sustainability and progress is key. In politics there are many people will keep voting for parties that they perceive as giving them things, even when there is no tangible progress being made decade after decade. Because of this, progress becomes secondary to the act of being perceived as giving ostensibly towards achieving progress, especially as politicians are giving people things with other peoples' money. But for a company, success is going to be quantified in ways where progress is all that matters. If this affordable housing is ineffective, worsens the social situation in the city, or whatever else - then they will have effectively wasted half a billion dollars of their own money. They have a major incentive to make sure this works.

The short version of this is that I definitely don't see affordable housing being sponsored by private interests as being contradictory. On the contrary I'd expect to see far better outcomes from the private than public sector on issues like this when there is a significant private industry benefit to be had from affordable housing.

[1] - https://www.snopes.com/fact-check/lbj-voting-democratic/

The quote of LBJ talking to his chauffeur is taken out of context. The chauffeur was complaining about a note LBJ had written to prevent local authorities from waylaying him driving through the South alone on errands “This n————— drives for me.”

Because when the corporate company does it, it goes out of the pocket of the executives that make the decision. When the state does it, it goes out from the pocket of somewhere else and into their own.

It's only money "belonging" to those corporate executives because we have arbitrarily decided to apportion absurd wealth to those individuals. What's more unjustifiable: taxation, or granting all the rewards of capitalism to a minuscule minority of the population?

All the rewards?

Yes, asymptotically. Wealth is ever more concentrated with each passing year -- and the pro-inequality ideology that underpins that ever-increasing concentration of economic power (and therefore political power) in the hands of the few admits no limits.

I was sorely tempted to paste a URL to the Steve Ballmer "developers developers developers developers" video.

It is even more evil than that. Those below-market interest rates will be deducted from MS's tax bill. In a few years, MS will be earning profits from these loans AND the government will be chipping in via the reduction in their corporate income tax.

Frankly, given the amount of money each of the big tech companies are sitting upon, they should all be branching out into banking. Maybe charitable loans are a way of doing this without actually going through the hoops of becoming a bank.

> Those below-market interest rates will be deducted from MS's tax bill

This is true of all charitable giving. They still make less money than if they invested their money at market rates. I don’t see why every good act requires a negative knee-jerk reaction.

Because saying that they are "pledging" 500m is disingenuous. The article should make clear exactly how much of a hit MS is taking ... if they are taking a hit. This is not the same as me pledging money to a charity and should not be described in such terms.

so complain that the nytimes journalists can't math. it isn't microsoft's job to explain their charitable giving in the least charitable possible terms.

it isn't as though you go on dates and enumerate your moral failings.

Does it mean they are buying 25 houses in Seattle area for the company ownership ?? Are they going into property development now ??

This line made me snicker:

"And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable."

So, 85% of the housing created is too expensive to be purchased? Sounds like a pretty poor business model. ;)

‘Affordable’ in this context means ‘to someone on a median income in the area.’ It doesn’t mean nobody could afford them otherwise.

Applications are open for YC Summer 2019

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact