Apple pledges $2.5 billion to fight California housing
crisis
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[November 04, 2019] By
Stephen Nellis
(Reuters) - Apple Inc on Monday said it
would commit $2.5 billion to easing a housing shortage that has driven
up prices across California, with most of the money dedicated to funds
that will be run either with or by the state government.
One billion dollars will go to a jointly run fund with state officials
aimed at jumpstarting delayed or stalled affordable housing projects.
Another $1 billion will go to a state-run fund to provide first-time
home buyer financial assistance to teachers, nurses and first responders
such as police and firefighters, among others.
In an interview with Reuters, Apple Chief Executive Tim Cook said the
company felt a "profound responsibility" to improve California's housing
crisis. Apple's current headquarters - a ring of gleaming metal and
glass nicknamed the "spaceship" in Cupertino, California - sits less
than five miles from the suburban family home where co-founders Steve
Jobs and Steve Wozniak assembled the first Apple computers in the 1970s.
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"We want to make sure that it is a vibrant place where people can live
and also raise a family," Apple Chief Executive Tim Cook told Reuters in
an interview. "And there's no question that today that isn't possible
for many people, that the region suffers from an affordability crisis
that is existential."
The move comes after Facebook Inc and Alphabet Inc-owned Google both
committed $1 billion toward California housing initiatives while
Microsoft Corp committed $500 million in the Seattle, Washington area.
Apple said the project-financing fund was the first of its kind. Real
estate developers often secure bonds for affordable housing development
but must service the debt during construction until the houses are built
and start to generate revenue. Apple and state officials hope to provide
bridge financing during construction at rates below those from
commercial lenders.
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![](../images/110419pics/busine7.jpg)
Tim Cook, CEO of Apple, attends the annual Allen and Co. Sun Valley
media conference in Sun Valley, Idaho, U.S., July 10, 2019.
REUTERS/Brendan McDermid/File Photo
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Apple said the funding could take two years to deploy but that it hopes to
recycle the funding for future projects over five years.
“This unparalleled financial commitment to affordable housing, and the
innovative strategies at the heart of this initiative, are proof that Apple is
serious about solving this issue," California Governor Gavin Newsom said in a
statement.
The $2 billion in funding will be deployable across California, while the
remaining $500 million will go toward efforts specific to Apple's home region in
Northern California, where fast-growing tech companies have drawn protests from
residents who blame them for rising housing costs.
Apple will make available about 42 acres of land in northern San Jose,
California valued at $300 million on which it hopes nearly 3,800 affordable
housing units can be built. It will also donate $150 million to a Bay Area
affordable housing fund and $50 million to Destination: Home, a public-private
group addressing homelessness in Silicon Valley, home to some of the world's
most valuable public companies.
"Tech has grown a lot, and it has become a larger portion of the economy," Cook
said. "We'd like to be part of the solution, so that's why we're jumping in."
(Reporting by Stephen Nellis in San Francisco; Editing by Shri Navaratnam)
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