REDMOND, Wash., Sept. 26, 2019 /PRNewswire/ -- Microsoft Corp.,
King County Housing Authority (KCHA) and King County on Thursday announced a combined
$245 million investment to protect
1,029 units of affordable rental housing throughout King County.
The partnership comes in the form of a 15-year, $60 million loan from Microsoft to KCHA at
below-market interest rates, combined with $20 million in low-interest debt and additional
credit enhancements provided by King
County, and $140 million in
bonds issued by KCHA. This investment marks a significant milestone
for Microsoft's $500 million
commitment announced in January 2019
to advance affordable housing solutions in the Puget Sound
region.
Microsoft's investment will help finance KCHA's acquisition of
five residential apartment complexes in Kirkland, Bellevue and Federal
Way, ensuring rents will remain affordable long term and
allowing over 3,000 low- and middle-income people to remain in
their communities. Because of their location, these affordable
properties were at high risk of experiencing rapidly escalating
rents or redevelopment as higher-cost housing.
"We are committed to maintaining and bolstering strong, vibrant
communities here in the greater Puget Sound region," said
Jane Broom, senior director of
Microsoft Philanthropies. "Thriving communities include safe,
reliable and affordable housing options for people at all income
levels. To do this, we all need to come together to not only build
more housing options, but also to preserve what already
exists."
The investment provides the key piece of financing that allows
KCHA to acquire the five properties and stabilize rents. Future
rent increases can be driven by the cost to operate the property
rather than by market pricing, and over time rents are expected to
be well below rents in the surrounding market. It is estimated that
over a 30-year period the cumulative rents charged at these
complexes will save renters over $450
million in housing costs compared with what would have been
charged if these properties had remained in for-profit ownership
and priced at market rents.
"We have extraordinary partners in Microsoft and King County
Housing Authority as we collaborate to secure housing opportunities
for more than 1,000 low-to-moderate-income individuals and families
in East and South King County,"
said King County Executive Dow Constantine. "Our combined
investment makes this housing affordable not just now, but for
generations to come."
This partnership is an example of how the public and private
sectors can work together to help address community issues. This
initiative effectively partners corporate financing with efforts to
preserve an adequate supply of affordable housing. The impact of
this investment is immediate, with value added in the form of
increasing affordability over time.
Local studies estimate King
County has lost at least 36,000 affordable rental units in
the last decade as rents increased by 43%.
"Across the Puget Sound region, people with lower and even
middle incomes have been forced to move due to rising housing
costs," said KCHA Executive Director Stephen Norman. "This partnership preserves
unsubsidized middle-market housing for moderate- and lower-wage
earners. We believe this investment, which requires a good
corporate partner to make the numbers work, will ultimately help
stabilize rents and safeguard more than 3,000 existing tenants from
being priced out of their homes."
Ensuring a healthy community: The need for affordable
housing
Puget Sound is the sixth most expensive region in the country,
and despite a 21% increase in jobs since 2011, the increase in
housing units rose by only 13%. This problem is even more
pronounced in the smaller cities surrounding Seattle than it is in Seattle itself.
To help address this affordable housing crisis, Microsoft's
$500 million commitment included
$225 million in loans at
below-market-rate returns — such as KCHA has received — to inject
capital to catalyze the preservation and construction of
middle-income housing in the eastside of King County. The commitment also afforded an
additional $250 million in loans at
market-rate returns to support low-income housing across the entire
Puget Sound region, and $25 million
in philanthropic grants to address homelessness throughout the
greater Seattle region. In
June 2019, Plymouth Housing, a
nonprofit that operates permanent supportive residences for
individuals struggling with homelessness, received a $5 million donation from Microsoft, the second
grant awarded.
About KCHA
KCHA, an independent municipal corporation established under
state law, assists more than 20,000 households in the Seattle metropolitan region on a daily basis.
The Authority administers rental housing assistance, develops and
manages affordable housing, and works closely with community
stakeholders to address local priorities such as ending
homelessness, improving educational outcomes for the region's
low-income youth, and assuring that disabled and elderly households
can live with dignity. KCHA is also a national leader in the
preservation of affordable workforce housing.
About Microsoft
Microsoft (Nasdaq: MSFT) (@microsoft) enables digital
transformation for the era of an intelligent cloud and an
intelligent edge. Its mission is to empower every person and every
organization on the planet to achieve more.
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SOURCE Microsoft Corp.