Apple taps first $400 million of $2.5 billion housing pledge
Making a down payment on its housing pledge, Apple announced Monday it has committed to affordable housing projects this year across California, including immediate assistance for struggling Bay Area tenants and four, new low-income projects across the region.
The short-term aid and construction projects mark the first installment of the tech giant’s $2.5 billion commitment to address the state’s housing crisis.
“At a time when so many members of our community are facing unprecedented challenges, we believe it’s critical to make sure that their hopes for the future are supported through tangible programs and results,” Apple vice president of global real estate Kristina Raspe said in a statement. The Cupertino company has kept the program on-track despite widespread disruption from the COVID- pandemic.
The corporate funds come amid growing concerns for short-term housing security during the health crisis, on top of the decades-long, growing deficit of affordable housing for low and very-low income residents. Apple’s planned overall contribution is the largest corporate pledge among several Silicon Valley companies — including $2.5 billion commitments from and Google — in the last months.
Tech companies have drawn criticism for not doing enough to alleviate the Bay Area housing crisis that accompanied the quick-growth of sprawling corporate campuses and a rapidly expanding workforce.
Apple announced in November a $. billion, multiyear commitment to address the affordable housing shortage in the state. The company, estimated to have about $ 2.5 billion cash on hand, has prioritized communities around its major facilities, and also focused on reaching vulnerable, minority populations.
Apple’s first step combines short- and long-term relief for struggling renters, homeless residents and first-time homebuyers. As part of its initial pledge, the company made long-term commitments of $ 400 million to Destination: Home, a San Jose nonprofit dedicated to sheltering the homeless, and $ 400 million to Housing Trust Silicon Valley to establish the Apple Affordable Housing Fund.
Destination: Home has used its initial funds to expand its homelessness prevention program during the CVOID- crisis. The program has served , Bay Area families through various aid organizations, an expansion of several hundred families from the previous year. The money has also supported major construction projects, including the nonprofit’s new, -unit project in Santa Clara for poor or homeless seniors.
Destination: Home CEO Jennifer Loving said Apple’s funding has boosted development projects and provided needed resources as more families, especially in communities of color, lose income and slip toward homelessness.
“There has never been a more important time to keep people from losing their homes,” Loving said.
Apple has also partnered with Housing Trust Silicon Valley to select four subsidized housing projects, including two in San Jose, and one in Santa Rosa and Pittsburg. The projects are expected to create subsidized apartments, including units reserved for veterans, homeless residents and those with developmental disabilities. The partnership did not release the cost details of the project.
Julie Mahowald, the interim CEO of the housing trust, said the funding has accelerated construction of the projects by at least a year. The long-term loans have allowed developers to fill budget gaps that have often sidetracked development.
The housing trust received about proposals this year to tap into the Apple fund, and chose four shovel-ready projects for its initial round, Mahowald said. The nonprofit expects to release more details about the projects in the coming months, and more projects are expected to get support in the coming years.
Tech companies are stepping up in recent years to support affordable housing and ease the Bay Area crisis, she said. “We’re going to get these homes built,” she said.
Apple has also begun to partner with the state through the California Housing Finance Agency for mortgage and downpayment assistance to first-time homebuyers. The program for new California homeowners helps low- and moderate-income families — including teachers and public safety workers — purchase homes in the nation’s most expensive state to buy property. The company said the partnership has put hundreds of first-time buyers into homes.
California planners estimated the state had a shortfall of at least . million affordable housing units, coupled with the highest development costs in the nation, according to a recent report from UC Berkley’s Terner Center for Housing Innovation. Researchers found the typical unit cost $,, an increase of percent in just four years.
The rising cost of construction and fierce competition with private developers for scarce land have exacerbated a decades-long shortage of affordable housing projects serving the working poor and residents on fixed incomes.
California Housing Partnership CEO Matt Schwartz said efforts from Apple and other tech firms are a start to addressing the vast demand for affordable housing. He pointed to the urgent need to help keep families sheltered through job losses and dwindling incomes.
But Apple’s long-term loans and financing may not provide as much of a boost as grants and other programs, he said. “It’s a big step,” he said, but “we’re halfway to where we need to be.”
