Daily Management Review

Tech giants take on housing construction


Since the beginning of the year, technology companies have announced their intention to invest $ 5 billion in affordable housing in the United States. This step indicates that corporations are increasingly taking on functions that are typically inherent in the state. Critics believe that such investments are just an advertising move, and they will not solve the housing problem.

In November, Apple announced that it was investing $ 2.5 billion in affordable housing funds in a densely populated area around San Francisco Bay, which has faced a major housing crisis in recent years. Apple will create its own fund for $ 1 billion, which will be engaged in construction, allocate land worth $ 300 million and invest $ 1.2 billion in other similar funds, including a fund to support first-time home buyers in a mortgage.

Apple's position is not common for a technology company. Many of tech giants build housing and invest in local infrastructure, that is, they assume the functions traditionally performed by the state. In a similar way, industrial magnates of the 19th century used to built housing for the workers of their enterprises, created libraries, kindergartens, schools and hospitals.

Often, technology corporations take over construction of affordable housing - not for their employees, usually well-paid, but for other residents. So, Apple mentions "teachers, firefighters, emergency workers and service industries."

Critics believe that the responsibility for the housing crisis in areas such as Silicon Valley lies largely with technology companies themselves, as their high-paying employees crowd out ordinary residents.

This year, California Governor Gavin Newsom called on local businesses to pay attention to the region’s housing problems and create a plan to combat the housing crisis and the growing number of homeless people. According to Up for Growth, to meet the demand for housing between 2000 and 2015, it was necessary to build 3.4 million homes in California, which was not done.

Facebook in January also announced creation of a fund that will finance the construction of affordable housing in the area around the San Francisco Bay. The fund is going to raise $ 500 million for these purposes. In October, the corporation promised to invest another $ 1 billion in the construction of affordable housing in California. It is assumed that it will be built on land owned by the state. Microsoft also announced its intention to invest $ 500 million in affordable housing in Seattle, where its headquarters are located. In June, Google said it would invest $ 1 billion in housing around the San Francisco Bay.

The tech giants are criticized for the fact that by investing in housing, they are trying to evade taxes both in the United States and abroad.

“This is a further capitulation of the public sector in favor of the private,” said Matthew G. Lasner, Urban Policy & Planning at Hunter College, New York. In his opinion, such obligations are “much simpler than raising taxes”, and in addition, they improve relations between the companies and society.

source: cnbc.com