Apple is pledging $2.5 billion to help combat California’s housing crisis. The financial plan was created in partnership with California Governor Gavin Newsom. Newsom said that Apple is “serious about solving this issue” and hopes other companies follow the company’s lead.
The announcement arrives on the heels of other large-scale pledges promised this year from tech giants; Facebook, Google and Microsoft, which have pledged $1 billion in recent months toward similar initiatives, however, Apple’s pledge is the largest yet.
“The sky-high cost of housing — both for homeowners and renters — is the defining quality-of-life concern for millions of families across this state, one that can only be fixed by building more housing,” Gov. Gavin Newsom said in a statement from Apple. “This partnership with Apple will allow the state of California to do just that.”
The money won’t be distributed immediately or all at once. Apple said it will “take approximately two years to be fully utilized depending on the availability of projects.” Money made on the projects will be “reinvested in future projects over the next five years,” the company said.
According to Apple’s news release, the company 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.
Apple’s plan includes $1 billion to create a mortgage assistance fund for first-time homebuyers, and another $1 billion that will be an open line of credit to support building “very low- to moderate-income housing,” the company said.
“Affordable housing means stability and dignity, opportunity and pride,” Apple CEO Tim Cook said. “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.”
According to NPR, here is a breakdown on Apple plans on spending the $2.5 billion in aid:
$1 billion affordable housing investment fund
$1 billion first-time homebuyer mortgage assistance fund
$300 million worth of land Apple owns in San Jose, which will be available for affordable housing
$150 million Bay Area housing fund, consisting of long-term forgivable loans and grants
$50 million to support vulnerable people: Apple is donating $50 million to support Destination: Home’s efforts to address homelessness in Silicon Valley, and other philanthropies in the north and south of the state.
Many economists blame mega tech firms for creating an imbalance with rapid expansion in headquartered communities where their employees drive up the cost of affordable housing.