Apple said it will direct $2.5 billion toward affordable housing in California, the latest tech giant to pledge money to one of the state’s most pressing problems.
The announcement, made Monday, follows similar big pledges this year from Facebook, Google and Microsoft, which put money toward housing in its home base of Seattle. And it comes amid criticism that tech firms had done too little to ease an affordability crunch that their rapid expansion helped worsen.
“Affordable housing means stability and dignity, opportunity and pride,” Apple Chief Executive Tim Cook said in a statement. “When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
Apple will spread its money out in a variety of ways, including a $2-billion investment in partnership with the state of California.
The Cupertino company said it is investing $1 billion in an affordable housing investment fund to help finance new, very low- to moderate-income housing.
According to Gov. Gavin Newsom’s office, half of the $1 billion will be accessible by the state and half of it by other public entities, with the state reserving oversight authority.
Apple said that it will invest another $1 billion, which will allow the state to help more first-time home buyers with financing and down payment assistance.
Apple said capital it earns on the investments within the next five years will be reinvested in affordable housing.
Newsom, who has urged tech firms to put money toward housing, praised the announcement.
“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,” Newsom said. “I hope other companies follow their lead.”
Apple’s pledge is the largest yet, but given the scale of the affordability problem much more investment is needed.
The company did not provide an estimate of how many homes its investments are intended to create. But according to the nonprofit California Housing Partnership, the state needs 1.4 million additional below-market homes to satisfy demand.
Since 2012, the California median home price has soared nearly 75% to $550,800, while the average rent for a vacant apartment is up 40% to $2,293, according to Zillow.
The swift rise has priced people out of their communities and helped push some into tents or RVs that line streets in the Bay Area and Southern California.
Many economists blame the affordability crisis on cities and residents who fight new development and block builders from constructing enough homes to meet demand from population and job growth.
But tech firms have also drawn criticism for not doing enough to mitigate the effects on communities of their rapid expansion.
After big announcements this year from Google, Facebook and Microsoft, Apple specifically has taken fire for not pitching in.
In a news release, Apple said it is making its investments “after extensively studying the issue and listening to different perspectives.”
Apple has a “profound civic responsibility to ensure [Silicon Valley] remains a vibrant place where people can live, have a family and contribute to the community,” Cook said in a statement.
In addition to the $2 billion that will be invested in partnership with the state, Apple said it will use $300 million worth of its land in San Jose for affordable housing development.
An additional $150 million will go toward a Bay Area-specific affordable housing fund, and the company said it’s donating $50 million to Destination: Home, a Silicon Valley nonprofit that seeks to end homelessness.