On Monday, Apple announced it would spend $2.5 billion to address California’s affordable housing crisis. California Governor Gavin Newsom stated the company’s investment is “proof that Apple is serious about solving this issue.” However, one Democratic presidential candidate derided the firm’s initiative in light of its role in making California living so expensive.
Apple’s $2.5 Billion Affordable Housing Plans
As part of its new initiative, Apple will establish a $1 billion affordable housing investment fund. The corporation will also dedicate $1 billion to a state-run mortgage assistance plan for first-time homebuyers. Moreover, the firm is making $300 million of its San Jose real estate available for affordable housing construction projects.
Besides, Apple will set up a $150 million fund to disperse long-term “forgivable loans” and another $50 million to Bay Area homelessness charities. The corporation said its two and 10-year loans would have variable rates but would be below market.
In a press release, Apple CEO Tim Cook explained why his firm is spending billions to make California housing more affordable. The executive noted, “Affordable housing means stability and dignity, opportunity and pride. We know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
In March, Vox posted an article explaining big Tech’s role in propagating California’s affordable housing crisis. The publication noted the industry brought hundreds of thousands of high wage jobs to California, which caused housing costs to skyrocket.
According to the San Francisco Chronicle, the median home price in the Bay Area is $810,000. In San Francisco, the average domicile costs $1.35 million. Real estate website Zillow notes homes in the region were half as much in 2012.
In June, Google committed to spending $1 billion to create more affordable housing in the San Francisco area. Similarly, Facebook pledged the same amount in October to create new housing units for middle and lower-income Californians.
Senator Sanders Objects
Despite approval from local Democrats, Senator Bernie Sanders (I-VT), a Democratic presidential hopeful, voiced his strong disapproval of Apple’s affordable housing initiative.
In a statement, the politician alleged, “Apple’s announcement that it is entering the real estate lending business is an effort to distract from the fact that it has helped create California’s housing crisis.” He also slammed the firm for keeping a quarter of a trillion dollars in offshore accounts to avoid paying taxes.
Last year, Apple brought $252 billion it held offshore to the United States because of changes to the tax code. In June, the corporation pledged to return $175 billion to its shareholders. By September, the firm had spent $77 billion on stock buybacks.
If elected president, Sanders has vowed to make companies like Apple “pay their fair share” to provide nationwide affordable housing. Moreover, the Senator has made a campaign pledge to create 7.4 million affordable housing units in the next 10 years.
According to the McKinley Global Institute, the $4.5 billion pledged by Apple, Google, and Facebook would provide 10,000 new housing units. In October, the New York Times reported 6,200 homeless people dwell in San Jose.