By Jay Greene
Microsoft Corp. pledged $500 million to support affordable housing in the Seattle area, an effort to address concern that technology companies' financial success has pushed less wealthy people out of their communities.
Microsoft's pledge is the largest financial commitment it has made on a single community issue, a spokesman said. The company, which announced the plans late Wednesday, has earmarked $475 million to fund construction loans for affordable housing in the area over the next three years. The other $25 million will fund grants to address homelessness.
The Puget Sound region has been among the nation's hottest real-estate markets, as business has boomed for both Microsoft, based in Redmond, Wash., and Seattle-based Amazon.com Inc. Much as in Silicon Valley, those who have benefited most from the tech boom have bid up home prices, forcing others to look for housing far away.
At a meeting with journalists this week, Microsoft Chief Executive Satya Nadella and President Brad Smith emphasized affordable housing as one of the issues tech companies need to address to strengthen trust in their industry and ensure the health of their communities.
In the Seattle area where Microsoft is based and employs some 50,000 people, median home prices soared 96% from 2011 to 2018, while median household income rose 34%, the company says. It estimates there is a shortage of about 305,000 housing units for middle- and low-income families.
Microsoft "recognized that jobs came, but housing wasn't built for the people who started to fill them," Mr. Smith said on Monday. That "has forced out of the community the schoolteachers, the nurses, the first responders, and many of the people who work at businesses and tech companies themselves."
The Seattle Times first reported details of Microsoft's housing plan.
Affordable housing has been a hot-button issue in tech hubs. Soaring home prices led Seattle to pass what was dubbed an "Amazon tax" last May that placed a per-employee levy on big companies to fund homeless services. The city repealed the measure a month later after pressure from Amazon and other businesses.
In San Francisco, Salesforce.com Inc. Chief Executive Marc Benioff backed a tax measure that won in November's election that will increase a gross-receipts tax on the city's businesses to fund homelessness programs.
Microsoft's move is part of a broader effort to address concerns about the tech industry across a range of issues, including privacy and security. Last month, for example, it urged governments last month to enact regulation of facial-recognition technology.
In general, Mr. Smith said, the tech sector needs to do more to address its impact on society. "Increasingly we have to ask ourselves not just how we benefit from the communities in which we work, but how we help these communities grapple with all these changes," he said.
Write to Jay Greene at Jay.Greene@wsj.com