Like many major metropolitan areas, Seattle is currently mired in what writer and housing activist Laura Bernstein has described as “a dual crisis of climate and affordability”. A lack of affordable housing near industry has led to carbon-intensive sprawl – think of all those commuting cars – and economic distress among Seattleites. So, last Wednesday, when Microsoft announced a plan to dedicate $500m towards alleviating the affordable housing crisis in the area, one might have been forgiven for thinking it was an entirely good thing.
Indeed, the impact that $500m will make should not be understated. In the Puget Sound area, $250m of the funds will go towards the construction of housing that people making 60% of the area median income ($48,150 for a two-person household) can afford. Another $225m will help area developers complete projects that have stalled for lack of funding, and also acquire land for future projects. Microsoft will also be granting $25m to local homeless aid organizations and anti-eviction lawyers. The money also comes coupled with a suggestion that local governments relax regressive zoning restrictions that make building affordable apartments illegal in 75% of Seattle’s city limits. In sum, this package will make a real material difference for Seattle’s houseless, housing insecure and rent-burdened populations.
But when you look the Microsoft gift horse in the mouth, certain cavities are visible. For instance, $475m of the funds are not, as is widely assumed, donations. They’re actually market-rate loans that affordable housing providers and government agencies will need to pay back. The Seattle Times reporter Mike Rosenberg notes that Microsoft will be turning a profit on this endeavor, while Seattle politics blog SCC Insight has cynically observed that the company is simply looking for places to sink some of its $135bn in liquid assets. In a declining stock market ransacked by Trump-induced economic insecurity, where better than an anemic public housing market to buy low and make a buck?
The bigger problem at hand is that this bucket of funds had to come from a billion-dollar company, and not local government, in the first place. Washington state has no income tax; if it had even a minuscule one, it could have raised many times more than $500m over a longer period of time. As it stands, for the state with the most regressive tax code in the nation, even a $500m windfall is too little; for the 191 King county residents who died homeless in 2018, it is tragically too late.
In May 2018, the Seattle city council introduced a modest tax on major corporations in the area; it repealed it a month later when the Seattle chamber of commerce spent nearly half a million dollars to excite rightwing opposition. Along with Amazon and Starbucks, Vulcan (Microsoft’s satellite real estate enterprise) was one of the corporations that contributed to the anti-tax campaign. Seen in the light of this nasty political fight, the company’s $500m gift seems a lot less like a donation, and more like a neoliberal rebrand.
In a political era defined by declining public investment, think back on all the basic services that America’s tech overlords have attempted to recreate. The list is staggering. Silicon Valley transportation shuttles have caricatured public transportation. With its Prime Book Box subscription, Amazon has parodied public libraries. Tesla CEO Elon Musk has dropped $10m a mile on a kooky transit tunnel. And now, with its $500m contribution, Microsoft seeks to replace public housing. But the problem is that when we rely on capricious capitalists to do right by the public sector, they will always be a day late and a dollar short. The public sector can do better.
During capitalism’s so-called “golden age”, between the end of the second world war and the early 1970s, high corporate tax rates subsidized the social safety net and public housing. Today, major corporations like Microsoft stash profits in offshore tax shelters, well out of reach of governments in need of revenue to fund basic services. Here in rainy Seattle, many residents living under the cloud of Jeff Bezos-era techno-libertarianism believe that the best we can do is wait for wealth to trickle down.
But to meet its affordable housing crisis, Seattle could raise $500m of its own money by issuing municipal bonds. With visionary leadership, the city could embark on radical neighborhood densification via comprehensive zoning reform. If adopted by all major American cities, such a measure would achieve half the carbon reductions needed to hold global temperatures to a rise of 2C (3.6F). And with even modestly progressive redistributive taxes, we wouldn’t have to depend on the kindness of oligarchs to house our citizens.
We should thank Microsoft for the aid and wish it the best of luck turning a profit on its foray into philanthropy. But a cash-strapped public in desperate need of relief shouldn’t allow software companies to have the final word.
Shaun Scott is a Seattle writer and activist. He is the author of the book Millennials and the Moments That Made Us: A Cultural History of the US from 1982-Present (Zero Books, 2018)