How Corporations Can Boost Their Affordable Housing Investments
Last week, Google made headlines when it announced a $1 billion investment in affordable housing in the Bay Area. Google plans to build 20,000 new homes over the next decade, including 5,000 affordable units, and to support programs that address homelessness.
This effort is badly needed. The Bay Area has the third-largest homeless population in the country (around 28,000) and housing is unaffordable for almost everyone. Other corporations, including Facebook, Salesforce, and Wells Fargo, have announced big investments in the area. In Seattle, which also faces an affordable housing crisis, Microsoft pledged $500 million to develop affordable units and support local homelessness programs.
It makes sense for corporations to invest in housing, considering they make long-term bets on the regions where they choose to do business. Affordable housing is vital to the well-being of a region’s residents and to a local economy’s ability to attract and retain a strong talent pool.
But these generous corporate investments could go a lot further toward closing affordability gaps in hot markets like the Bay Area or Seattle if they went hand in hand with zoning reforms that accommodate the construction of more housing, more cheaply. A report by Emily Badger and Quoctrung Bui for The New York Times revealed that an astonishing 94 percent of residential land in San Jose is zoned exclusively for detached single family homes. In Seattle, it’s 81 percent. That shuts down opportunities to build the number and types of homes and apartments people need and can afford.
A handful of communities around the country are already taking steps to overcome restrictive and outdated land-use regulations. But for many other places, opposition to change has blocked much-needed reforms and the current zoning landscape makes it nearly impossible to build low- or moderate-cost housing. Reforming that landscape is a heavy lift, but over the long haul, it would allow every dollar of corporate investment in affordable housing to go a lot further.
Better regulations can accelerate housing production in more ways than one. Fostering innovation in homebuilding can lower construction costs, reduce environmental impacts, and bridge segmentation in the industry. The same applies to housing finance, where mortgages for smaller homes or manufactured homes can be difficult for families to access.
As Amazon demonstrated during its highly publicized competition for a new headquarters, actions by large companies can elicit dramatic responses from local leaders. Business leaders bring a region-wide perspective and a focus on the future. Working together with local philanthropies and grassroots housing advocates, they have the potential to overcome local inertia and fear of change.
By leveraging their broad influence and voice in the community along with their dollars, big employers can amplify their generous investments through policy reforms that benefit entire regions for many years to come.
A construction crane in Seattle, against the backdrop of Mount Rainier. Photo by Elaine Thompson/Associated Press.