Just recently, Apple pledged an astonishing $2.5 billion to fight the housing crisis in California that's more than all other pledges including Google and Facebook.
Their enormous pledge includes invested and donated funds along with real estate to help produce new affordable housing and help first-time homebuyers throughout the entire state over the next 2 years.
Their pledge came after Google and Facebook's pledged $1 billion each. Local companies are stepping forward and making an effort to address the shortage of homes that have been aggravated by the tech boom in Silicon Valley.
Writing a new release, CEO Tim Cook said affordable housing means stability and dignity, opportunity and pride. When these are out of the reach of most people, we realized the course we are on is not sustainable. Apple is committed to being a part of the solution.
For months now, pressure has been put on Apple to take action, especially after Google and Facebook stepped up to the plate with pledges of $1 billion and real estate to fight the housing problem.
For years, Apple has stayed silent on the issue and some advocates have criticized the company for not making a significant contribution to the housing crisis vs the construction of its “Spaceship” campus in Cupertino. Well, Apple finally picked up the gauntlet surpassing both Google and Facebook.
Apple's commitment also includes 2 major components that will be executed along with Gov. Gavin Newsom's office and other local organizations. $1 billion will be provided as an open line of credit to the state and other organizations for the construction of housing for low to moderate-income families throughout the state.
The other $1 billion is allocated for a first-time homebuyer assistance program. Along with the state, Apple will provide financing and down payment assistance for those looking to be first-time homeowners. Apple is also looking into other ways to help school employees, veterans, and other essential service workers buy homes.
Newsome said this unparalleled financial commitment to affordable housing and innovative approaches is proof that Apple is serious about solving our housing issue. He's hoping other leading companies will follow suit.
Developers said Apple's announcement for low-income housing is being held up by a funding gap.
Gregory Bradbard, senior VP with the low-income developer National CORE in Rancho Cucamonga, said most of the affordable housing projects are financed with patchwork funding from a variety of sources known as the “funding stack”. This patchwork includes donated land, city contributions, tax credits, and loans.
He further said that funding is often the greatest barrier for getting these projects built. They definitely need more information about the line of credit and how it will be structured. If this can essentially help expedite the flow of funds to these affordable projects, that will be very positive.
Mark Asturias, Executive Director of the Irvine Community Land Trust, said Apple's contribution will greatly help his group which develops for-sale and for-rent affordable projects.
He said they are excited about it because of the components they have in homeownership and first-time home buyers. One of the most difficult issues they face is buyers having trouble getting down payment assistance.
Summing it up, he hopes that Apple will remember its commitment to the state of California which includes Southern California and Northern California.
On top of their contributions, Apple is making land the company owns in San Jose available for affordable housing. This land is worth approximately $300 million. Apple did not specify where the land is but they have been scooping up property in northern San Jose.
Two Bay Area housing organizations will receive $200 million. They are partnering with Housing Trust Silicon Valley to start a $150 million fund for local affordable housing using long-term forgivable loans and grants.
Apple has also donated $50million to the San Jose-based Destination “Home to combat homelessness in Silicon Valley”.
Silicon Valley has been home to Apple for a very long time before anyone ever heard of the area and long before consumers were carrying technology around in their pockets. Apple feels they have a huge responsibility to ensure the area remains a vibrant place where people can live, have families, and contribute to their community.
All said and done, we can only hope this isn't just another political ploy to keep residences from evacuating the state of California. Newsome has a very big problem on his hands, does he have a solution?