With its $ 500 million promise to overcome affordable housing in the Seattle area, Microsoft does not primarily cut local government charities. Private companies have done so before. Nor is it proposed to create housing for its own own employees, which companies have also done before.
Microsoft is trying to help solve a market for ailure – a job government typical ally does.
"It really represents something almost unprecedented," said Matthew Gordon Lasner, Associate Professor of Urban Studies and Planning at Hunter College. "What we see Microsoft is doing is assuming the role historically played by the federal government and the states."
The government spent approx. Three times as much on housing programs in the 1970s as it does today, according to the National Low Income Housing Coalition. In the years since, the government has been out of service with building public housing. And equity funds for repairing the remaining public housing stock have halved over the last 15 years.
During this time, federal resources are increasingly shifting away from subsidizing the construction of cheap housing to subsidizing tenants who find housing on the private market. And now, most new sub-market-based homes are not built by public authorities, but by non-profit developers utilizing tax credits. The value of these credits has also fallen recently due to changes in the tax bill adopted in 2017.
Microsoft's proposal is somehow an extension of this story, with private actors continuing to step in where the government once stood.
"Our role is to bring capital to solve this problem," said Microsoft President Brad Smith at an event that introduced the plan on Thursday.
Today in the Seattle region, the problem is not just that public support has fallen. The construction and land costs of building new homes have increased, and the wages that low-skilled workers can afford to spend on rent have stagnated.
"There is no public entity that can fill a hole as big as this," Mr. Said Smith. If the only focus is on spending money on public housing, he said: "It will be too slow and you will end up with homes that may not be time-tested."
Microsoft says it plans to spend $ 25 million on subsidies for local nonprofits working on homelessness. But the bulk of the money will be invested, some in affordable housing developments using tax credits and others in middle class developments that would not be economically feasible without low interest rates loans.
As these loans are repaid, Microsoft will also lend the capital to other developments, and in theory exploit the money to create what Microsoft estimates could be tens of thousands of homes, or much more than it would be possible if the company simply used the money directly build apartments themselves.
Ed Goetz, a professor at the University of Minnesota who has studied the history of public housing in America, said: "I do not want to reduce the extent of what they are doing. I think it is important and it will help. But it won't solve Seattle's problem. "
Microsoft has urged other companies to get involved. But Mr. Goetz said he could not imagine a situation where there were probably Microsoft's out there to really address the country's housing crisis.
"The federal government is the entity that has the resources to do this," Goetz said.
Diane Yentel, president of the National Low Income Housing Coalition, said she would welcome a trend where several major tech companies invested in managing housing. But she warned of the risk of further letting go of the government.
"Today's modern phenomenon of homelessness did not exist at the end of the 1970s because our country was home to almost everyone, including the lowest inmost and most vulnerable families," said Mrs Yentel in an email. "The key difference between then and now is falling federal subsidies."
When Microsoft revealed its plans, the Department of Housing and Urban Development remained largely closed in Washington during the government's shutdown. Federal contracts with hundreds of property owners providing housing for subsidized tenants have expired during the interruption, leaving thousands of families at risk of losing their homes.
Activists in societies like Seattle have made a strong case that technology companies have no responsibility to make the housing crisis worse. These companies have resulted in thousands of high-paid workers in housing markets who do not have room for everyone. But among the many culprits behind the crisis, the government's cut is also critical.
"This is a problem rooted in our political culture," Lasner said. "It is a problem rooted in the myths, we tell ourselves who we are as Americans. We have always been creepy and unpleasant with the idea of housing support or even interventions like rent control."
The Americans are more comfortable with ivate-see solutions, he said. But for an area as complicated as housing, he added, "They are not enough to face the challenge."
Karen Weise contributed to reporting.