Silicon Valley photo by Shutterstock.
CUPERTINO, CA—Apple announced this morning that it would commit $2.5 billion to address housing affordability and availability in California, particularly in Silicon Valley and the Bay Area. Apple intends that its initiative will accelerate new housing production—that is, jump-start long-term developments that would otherwise not be possible. It also expects to help first-time buyers purchase homes as well as support new housing and programs to reduce homelessness.
Not only is Apple is providing investment for statewide housing support, it is also funding projects in Silicon Valley and the Bay Area. It notes that nearly 30,000 people have left San Francisco between April and June of this year and that 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," said Apple CEO Tim Cook, when announcing the deal.
Apple's commitment includes:
- A $1 billion affordable housing investment fund: This fund 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.
- A $1 billion first-time homebuyer mortgage assistance fund: Working with the state, the fund will provide aspiring homebuyers with financing and down payment assistance.
- Some $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.
Apple is 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.
Apple will also provide $200 million to support new lower-income housing and help some of the most vulnerable populations in the Bay Area:
- $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 also be identifying similar efforts in Northern and Southern California, focusing on strategies that both end and prevent homelessness.
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 over the next five years.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
