(Reuters) – Apple Inc on Monday said it would commit $2.5 billion to the easing of the housing shortage, which has resulted in the rates in California, with most of the money to be devoted to the funds of which are to be carried out by or for the government.
FILE PHOTO: Tim Cook, CEO of Apple, attends the annual Allen and Co. The Sun Valley media conference in Sun Valley, Idaho, U.S., July 10, 2019 at the latest. REUTERS/Brendan McDermid/File Photo
A billion dollars is going to go to a co-managed fund with a public official, aimed at jumpstarting slowed down or come to a grinding halt affordable housing projects. Another $1 billion will go toward a state-run fund to provide first time home buyer financial assistance to teachers, nurses and first responders, such as police and fire departments, among others.
In an interview with Reuters, Apple Chief Executive Tim Cook said the company has had a “profound responsibility” for the improvement of California’s housing crisis. Apple’s current headquarters, a ring of a glossy metal-and-glass-also known as the “spaceship” in Cupertino, California, is located less than five miles from the suburban family home of the co-founders Steve Jobs and Steve Wozniak assembled the first Apple computers in the 1970’s.
“We want to make sure that it is a vibrant place where people can live and raise a family,” the Apple Chief Executive, Tim Cook, told Reuters in an interview. “There’s no question that day in and day out, it is not possible for a lot of people, that is, the region is facing an affordability crisis that is existential.”
The move comes after Facebook Inc. and Alphabet, Inc.-now owned by Google, they have a $1-billion toward California’s housing initiatives, while Microsoft Corp is $500 million more in Seattle, Washington.
Apple said that the project financing of the fund is the first of its kind. Real estate developers are often in safe and secure bonds for affordable housing, but the need for the debt to be repaid during the construction process until the homes have already been built and start to generate income. Apple and state officials are hoping to bridge the funding during the construction, the rates are lower than commercial lenders.
Apple said that the funding for two years to implement, but it is hoped to recycle the funding for the projects in the near future, about five years ago.
“This is an unprecedented financial commitment to affordable housing, and innovative strategies are at the heart of this initiative is proof that Apple is serious about solving the problem,” the Governor of California, Gavin Newsom, said in a statement.
The $2 billion in funding that will be usable across California, while the remaining $500 million will go in the direction of the effort is specific to Apple’s own region in the North of California, where the fast-growing technology companies have drawn objections from residents who blame them for the rising cost of housing.
Apple is going to be approximately 42 acres of land in the northern part of the San Jose, California, in the amount of $300 million, which it hopes to nearly 3,800 affordable homes to be built. It will also donate $150 million to the Bay Area’s affordable housing fund and $50 million of Destination: Home, a public-private-group approach to tackling homelessness in the Silicon Valley, home to some of the world’s most valuable publicly traded companies.
“The Tech has grown a lot, and it has turned out to be a bigger part of the economy,” Cook said. “We would like to be a part of the solution, so that is the reason why we have to jump into it.”
Report by Stephen Nellis in San Francisco; Editing by Shri Navaratnam