Every so often, Big Tech likes to announce splashy social initiatives where it throws money at a problem. Big Tech looks good for ‘caring’ and, more importantly, it distracts from the not-so-great things happening on the sidelines. Yesterday, Apple announced a $2.5 billion plan to address the housing crisis in California—a plan that 2020 Democratic presidential candidate Senator Bernie Sanders criticized as hypocrisy, saying Apple is “throwing pennies at a crisis [it] helped create.”
Apple’s plan would allocate $1 billion to an affordable housing investment fund, $1 billion to a first-time homebuyer mortgage assistance fund, $300 million to “Apple-owned” and available land for affordable housing, $150 million to a Bay Area housing fund, and $50 million to address homelessness. Most interesting is the chunk going toward land Apple already owns in San Jose. The Apple press release states it “plans to make available land it owns in San Jose worth approximately $300 million” to develop affordable housing. That raises the question of whether Apple plans to actually dip into its coffers to develop that new housing or merely inflate its overall financial commitment by saying, “Here’s $300 million worth of land, anybody who wants to, have at it.” It was made clear to Gizmodo after publication that it is the latter.
California’s housing crisis is multifold. Despite being home to Silicon Valley and all the wealth Big Tech generates and the rising home and rent prices that result from it, homelessness is on the rise. That’s in part due to the state’s inability to build houses at a rate that can keep up with demand—California ranks 49th in housing per capita. That leads to skyrocketing rents, and the worrying trend of rich assholes saying “Not in my backyard” to new developments or public projects that could at least alleviate the problem.
Regardless of the company’s intentions, Apple’s release is full of fawning quotes from California Governor Gavin Newsom and a few other partners on the receiving end of Apple’s public-facing generosity. (To be fair, they absolutely need the money.) But, it is disingenuous to completely overlook the fact that the influx of tech workers to the region is a major contributing factor to the crisis itself. Not to mention the fact that while $2.5 billion is a big number on paper, it’s a small fraction of Apple’s overall wealth. In Q3 2019, Apple reportedly had $210.6 billion in cash on hand—and that’s not including money held offshore or in other assets.
“Apple’s announcement that it is entering the real estate lending business is an effort to distract from the fact that it has helped create California’s housing crisis—all while raking in $800 million of taxpayer subsidies, and keeping a quarter trillion dollars of profit offshore, in order to avoid paying billions of dollars of taxes,” Senator Sanders said in a statement emailed to Gizmodo. “Today, more than 134,000 Californians are homeless and renters need to earn $34.69 per hour to afford the average two-bedroom apartment. We cannot rely on corporate tax evaders to solve California’s housing crisis.”
Gizmodo asked Apple if it had a response to Sanders’ criticisms but did not hear an immediate response.
“When we defeat Donald Trump, we are going to make companies like Apple start paying their fair share, so that we can finally start making massive long-term investments that guarantee Americans affordable housing,” Sanders concluded, alluding to his Housing For All plan that would earmark $2.5 trillion over the next decade for the issue by taxing the wealthiest tenth of the 1 percent.
In the statement, Sanders was also quick to point out this isn’t the first or only time Big Tech has thrown money at housing crises to buy public goodwill. In January, Microsoft pledged $500 million toward affordable housing and homelessness in the Seattle area. Likewise, Facebook announced it would commit $1 billion toward the California housing crisis just a few weeks ago.
Update, 11/05/2019, 1:53 pm: Added clarification that the $300 million for affordable housing in San Jose is being made available in land only, not cash.