By Chloe Aiello
Inflated housing prices and long commute times in tech hubs nationwide is draining the life out of cities, Microsoft President Brad Smith told Cheddar Thursday following the company's announcement it would invest $500 million to address affordable housing and homelessness in and around Seattle, Wash.
"It's really sapping the vitality of our community. We recognize as a business we can only be successful if the community is successful. We need new steps, we took a new step today," Smith said.
Microsoft's ($MSFT) commitment includes $225 million invested at below market rate returns for middle-income housing, $250 million invested at market rate returns for low-income housing, as well as an additional $25 million for philanthropic grants to address homelessness. Most of the capital will be deployed within the next three years, according to the company, which is based in nearby Redmond, Wash.
"Here in Puget Sound, we are seeing something that we are seeing in a number of tech hubs across the country. Jobs have grown, people have moved in, but housing construction simply has not kept pace," Smith told Cheddar on Thursday. "We've seen big increases in housing prices and what it has really caused is pressure on low and middle-income families."
Due to the explosive growth of technology companies headquartered there, like Microsoft and Amazon ($AMZN), the median sale price of homes in the Seattle area have soared an estimated 98 percent from $354,000 in Nov. 2011 to $702,000 in Nov. 2018, according to Zillow.
"You really need a healthy community," Smith said. "A healthy community needs to have room for everybody to live from all economic backgrounds. A school where the teacher has to drive for two hours before walking into the building is not likely to be as successful as a school where the teacher lives half a mile away."
These housing issues aren't unique to Washington. Tech hubs nationwide have seen unprecedented growth, which has put a strain on lower and middle-income residents ー many of whom have been priced out of the areas and forced to endure longer commute times or in the worst cases, homelessness.
In some cases, companies have squashed efforts to combat these growing problems. In June, for example, Amazon pressured Seattle City Council to repeal a "head tax” that would have levied a per employee tax on businesses making more than $20 million, the Atlantic reported.
But others, like Microsoft and Salesforce ($CRM), have made serious efforts to help.
"I think to some degree, if you don't bring the community together, if you don't recognize you face a common problem and if you don't fashion a coherent or comprehensive strategy, you end up digging a hole," Smith said.
For full interview click here.