SAN FRANCISCO (NYTIMES)- Apple on Monday (Nov 4) announced a US$2.5 billion (S$3.4 billion) plan to address the housing crisis in California, becoming the latest big tech company to devote money to a problem that local lawmakers and economists believe it helped create.

The iPhone maker’s plan includes a US$1 billion investment fund for affordable housing and another US$1 billion to buy mortgages.

Apple also intends to make a 40-acre, US$300 million property it owns in San Jose, California, available for new affordable housing.

Apple’s housing plan is a response to the increasing pressure Silicon Valley’s tech giants are under to play a more active role in the region’s housing crisis. As local tech companies big and small have boomed, they have flooded the region with hundreds of thousands of highly paid employees.

But the supply of housing has failed to keep pace, and prices have soared. The median home value in San Jose, California, is now nearly US$1 million, roughly double the price from 2012, according to Zillow, the real estate site.

Now, after years of complaints that they have not done enough to be good corporate neighbours, many of those companies are digging into their vast bank accounts – and tapping some of the properties they have already acquired – to help address the problem.

Last month, Facebook said it would offer US$1 billion in a package of grants and loans in California. Google pledged US$1 billion for a similar effort in June.

Apple is offering a hefty sum, but the company can afford it. Last year, Apple used new tax laws to bring back most of the US$252 billion it held abroad. Since then, the company has been busy trying to spend that cash.

The roughly US$4.5 billion from the three companies will be multiplied by other public and private sources, so it’s difficult to know exactly how much housing it will buy. But even billions of dollars will only dent the housing problem. New construction in California has at times been handicapped by red tape and local rules that bar the more dense housing designs that planners believe are necessary to meet demand.

Using current construction and land prices, US$4.5 billion would buy roughly 10,000 new housing units in California. According to the McKinsey Global Institute, the state needs to build 3.5 million homes by 2025 to meet projected housing demand.

Source: Read Full Article