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A “Four”-dable Housing

What Amazon, Apple, Facebook, and Google are doing about affordable housing in their communities*RyzD9X5N-3azcvs7

Nicknamed, “The Four”, Google, Amazon, Facebook, Apple have all made pledges between $1 and $2.5 billion over the last couple of years to help address the affordable housing crisis in their communities (links are to original press releases):

January 2021 — Amazon invests $2b November 2019 — Apple invests $2.5b October 2019 — Facebook invests $1b June 2019 — Google invests $1b

It’s easy to be jaded with big numbers so let’s put some perspective on that $6.5 billion total. $6.5 billion is less than .001% of The Four’s collective market cap ($6.5b divided by $4.7t). $6.5 billion is just over 2% of their revenue from Q4 2020 ($6.5b divided by $240b). To the average person, $6.5 billion is a lot of money. For The Four? Not so much.

Each program is intended to be spent in a variety of different ways and in a variety of different locations. I haven’t seen a side by side comparison of the investments yet, so let’s compare and contrast:

Source: Author

The biggest similarity between all the programs is the allocation of recourses for low-cost loans for developers. Apple, the largest investor, is choosing to spread its capital across a variety of different strategies in the state of California. I use the word “investment” rather than “pledge” or “donation” because a majority of this $6.5b is available in the form of below-market capital. An essential tool, no doubt, as form follows finance in real estate development.

Here are some additional details about each of these programs:


Total: $2b Location: 3 cities (Seattle, Nashville, Arlington)

$382 million to the Washington Housing Conservancy and the King County Housing Authority to, “preserve and create…affordable homes.”

$125 million in cash grants to small businesses, nonprofits, and minority-led organizations, in order to, “build a more inclusive solution to the affordable housing crisis.”

The remaining $493m has yet to be publicly allocated with Amazon intending to share additional partners in the coming months and years. Amazon’s strategy appears to be building relationships with agencies that have affordable housing construction and management experience.


Total: $2.5b Location: State of California

$1 billion affordable housing investment fund: “The $1 billion commitment to the state of California is a first-of-its-kind affordable housing fund that will provide the state and others with an open line of credit to develop and build additional new, very low- to moderate-income housing faster and at a lower cost.”

$1 billion first-time homebuyer mortgage assistance fund: “Working with the state, this first-time homebuyer fund will provide aspiring homebuyers with financing and down payment assistance. Apple and the state will explore strategies to increase access to first-time homeownership opportunities for essential service personnel, school employees, and veterans.”

$300 million in Apple-owned land will be available for affordable housing: “Apple intends to make available land it owns in San Jose worth approximately $300 million for the development of new affordable housing.”

$150 million Bay Area housing fund: “In a public-private partnership, Apple is launching a new $150 million affordable housing fund with partners including Housing Trust Silicon Valley to support new affordable housing projects. The fund will consist of long-term forgivable loans and grants.”

$50 million to support vulnerable populations: “Apple will donate $50 million to support Destination: Home’s efforts to address homelessness in Silicon Valley. Apple will focus its contribution on driving systemic change across the many factors affecting homelessness. Apple will also be identifying similar efforts in Northern and Southern California, focusing on strategies that both end and prevent homelessness.”


Total: $1b Location: State of California

$250 million to a partnership with the state of California for mixed-income housing on excess state-owned land in communities where housing is scarce.

$150 million for the production of affordable housing, including housing for the homeless, in the San Francisco Bay Area.

$225 million in land in Menlo Park.

$25 million to build teacher and essential worker housing on public land for school districts in San Mateo and Santa Clara counties.

$350 million in funds for additional commitments based on the rollout and effectiveness of the initiatives described above.


Total: $1b Location: “Bay Area”

$750 million worth of the company’s existing office space, which Google will convert into an estimated 15,000 units.

$250 million toward “incentives” for other developers to build 5,000 units of affordable housing.

$50 million to nonprofits that help the homeless find shelter.

The Impact?

A majority of these funds are targeting the supply problem of affordable housing. Economics 101 — If we build more housing (increase supply), rent will decrease (reduction in demand).

Edward Glaeser writes in his book, Triumph of the City, “the only way to provide affordable housing at scale is to unleash the developers.” The Four are hoping to do just that with below-market capital. But it might be easier said than done. One of the biggest obstacles to development is regulations and California’s construction environment is one of the strictest in the States. Amazon might have more luck with their program considering they are the only one of “The Four” to be developing outside of California.

We need affordable housing in our communities. It’s essential to our urban fabric but how far will this $6.5b go? Stay Tuned.

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