Apple pledges $2.5B to address California housing crisis
Apple CEO Tim Cook (left) and Calif. Gov. Gavin Newsom look at plans to address the housing shortage.
CUPERTINO, Calif. - Apple on Monday announced a $2.5-billion plan to help address the housing availability and affordability crisis in California.
Plus, Apple will also provide $200 million to support new lower-income housing and help some of the most vulnerable populations in the Bay Area. Apple is partnering with Housing Trust Silicon Valley to launch a $150 million fund for local affordable housing, using long-term forgivable loans and grants. And Apple is donating $50 million to San Jose-based Destination: Home to combat homelessness in Silicon Valley.
The Cupertino-based company, where employees make ample salaries and enjoy free lunches and other perks on the tech campus, note that community members like teachers, firefighters, first responders and service workers are increasingly having to make the difficult choice to leave behind increasingly gentrified neighborhoods they have long called home.
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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.
“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.”
Pressure for Apple to act had been building for months, after the other tech behemoths first jumped into the housing fray, donating money and real estate to help ease these problems. In June, Google donated $1 billion to help build 20,000 homes in the Bay Area and in less than a month ago, Facebook also pledged $1 billion.
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On Sunday, the Bay Area News Group looked into Silicon Valley land ownership patterns and found that Apple has done little to help. Apple's announcement came a day after the in-depth story was published.
Apple’s commitment to the state of California includes:
- $1 billion affordable housing investment fund: The $1 billion commitment to the state of California is a first-of-its-kind affordable housing fund that will provide the state and others with an open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost.
- $1 billion first-time homebuyer mortgage assistance fund: Working with the state, this first-time homebuyer fund will provide aspiring homebuyers with financing and down payment assistance. Apple and the state will explore strategies to increase access to first-time homeownership opportunities for essential service personnel, school employees and veterans.
- $300 million Apple-owned land will be available for affordable housing: Apple intends to make available land it owns in San Jose worth approximately $300 million for the development of new affordable housing.
- $150 million Bay Area housing fund: In a public-private partnership, Apple is launching a new $150 million affordable housing fund with partners including Housing Trust Silicon Valley to support new affordable housing projects. The fund will consist of long-term forgivable loans and grants.
- $50 million to support vulnerable populations: Apple will donate $50 million to support Destination: Home’s efforts to address homelessness in Silicon Valley. Apple will focus its contribution on driving systemic change across the many factors affecting homelessness. Apple will also be identifying similar efforts in Northern and Southern California, focusing on strategies that both end and prevent homelessness.
California's governor was pleased. The money will be executed in partnership with his officie and other local Bay Area organizations.
“I hope other companies follow their lead,” Gov. Gavin 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. This partnership with Apple will allow the state of California to do just that.”
The funding commitment to California is expected to take approximately two years. Capital returned to Apple will be reinvested in future projects over the next five years, the company said.
Apple is also working to identify private developers who are ready to start construction on affordable housing projects in the Bay Area immediately.