Few places can match the cost of living in California, especially in the San Francisco Bay area and fabled Silicon Valley (San Jose). Even Los Angeles can’t match the cost of housing found in the northern part of the state. Although Silicon Valley attracts well-paid engineers and technologists, software and systems designers, and the myriad of managers needed to maintain the area’s image as a tech capital, there are also the support people necessary for these high-tech companies to flourish: the waiters, cleaners, hospitality workers, police and firefighters, and tens of thousands of other who don’t make the salaries that allow you to buy or even maintain homes in the area.
At least one company has recognized the issue and stepped up to help. Apple announced a comprehensive $2.5 billion plan to help address the housing availability and affordability crisis in California. After all, Apple was in the area long before it became known as Silicon Valley and has some of the deepest pockets in the world.
As costs skyrocket for renters and potential homebuyers, and as the availability of affordable housing fails to keep pace with the region’s growth, community members like teachers, firefighters, first responders, and service workers are increasingly having to make the difficult choice to leave behind the community they have long called home. 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.
Apple has designed its initiative to accelerate and expand new housing production; jump-start long-term developments that would otherwise not be possible; help first-time buyers purchase homes; and support new housing and programs to reduce homelessness, after extensively studying the issue and listening to different perspectives. In partnership with Governor Gavin Newsom, the state of California and community-based organizations, Apple is providing a significant investment that offers statewide housing support as well as funding for projects in Silicon Valley and the Bay Area.
Tim Cook and California Governor Gavin Newsom, discussing
the San Jose land Apple is making available for affordable housing.
The company’s commitment includes a first-of-its-kind $1 billion 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. Another $1 billion is earmarked for first-time homebuyers. Working with the state, this 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. In addition, Apple intends to make excess land it owns in San Jose, worth approximately $300 million, available for the development of new affordable housing.
The funding commitment to California is expected to take approximately two years to be fully utilized depending on the availability of projects. Capital returned to Apple will be reinvested in future projects in the next five years. Apple is also working to identify private developers who, with the right financing and investment, are ready to start construction on affordable housing projects in the Bay Area immediately.
In this aspect of the project, Apple will provide $200 million to support new lower-income housing and help some of the most vulnerable populations in the Bay Area. This includes a public-private partnership with a $150 million affordable housing fund through partners including Housing Trust Silicon Valley to support new affordable housing projects. The fund will consist of long-term forgivable loans and grants.
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.
One of the first projects Apple will fund as part of its philanthropic commitment to Destination: Home will be an expansion of the organization’s Homelessness Prevention System, a network of service providers offering employment assistance, legal aid, rent subsidy, case management, and other support to reduce homelessness.
By putting its $2.5 billion investment to use across multiple initiatives and partners, Apple’s housing initiative offers a comprehensive and multi-pronged approach to address some of the most urgent challenges facing affordable housing in California. This initiative is a major step, and Apple will continue looking for ways to support communities and affordable housing.
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