In Seattle and surrounding areas many studios and one-bedroom apartments have been built — but family housing with two or more bedrooms is catastrophically scarce. The Ballmer Group, founded by former Microsoft CEO Steve Ballmer and his wife, announced a new program: grants (forgivable loans) for developers who build at least 10,000 affordable units of the right size across the state. Ballmer, one of the wealthiest people in the world, uses his foundation for philanthropy in the U.S., focusing on economic mobility and poverty alleviation. His vast resources and connections within Seattle’s business elite allow the foundation to influence policy and draw attention to the issue.
Research shows housing is one of the main determinants of children’s health and education. “Without a safe and stable home, it’s incredibly difficult for a child to thrive in school, be healthy, and reach their potential,” says Terry Ludwig, head of the Ballmer Group. At present there are only 44 apartments affordable to every 100 low-income renters in the state, and for families with children that figure is even lower.
According to the Ballmer Group’s calculations, Washington needs about 3,000 new affordable apartments for such families each year. Under the new program, developers can receive up to $150,000 per unit provided at least half of the apartments in a project have two or more bedrooms and rents remain affordable to households earning no more than 50% of the area median income (about $74,000 for a three-person family in the Seattle area). Loans are forgiven if the housing remains affordable for 60 years.
The program’s main difference is that it is designed to leverage private financing rather than scarce public funds. The Ballmer Group will fund only projects that do not use competitive public dollars. “Year after year we have more good proposals than we can finance,” explains Steve Walker of the state housing finance commission, which oversees the program. “This initiative is trying to do everything differently.”
However, the program faces serious challenges — primarily high construction costs. An industry example: in 2019 Microsoft pledged $500 million for housing in the Puget Sound region, hoping to build 50,000 units. This region in the northwest of the state, including Seattle and its suburbs, became the epicenter of housing problems due to rapid economic growth that attracted tens of thousands of high-paid workers from giants like Microsoft and Amazon. In the end, even after increasing the budget to $750 million, the company helped create or preserve only 16,500 homes. Microsoft President Brad Smith urged authorities to reduce regulatory barriers and construction costs. According to Microsoft, key obstacles are strict zoning limits that prohibit multifamily construction across much of the land, especially in suburbs; lengthy and expensive permitting processes; high infrastructure connection fees and parking requirements; as well as a shortage of skilled labor and rising material costs.
The first Ballmer Group project already launched this spring: a 102-unit building in Puyallup by Great Expectations, a private developer of affordable housing. It will include two-, three- and four-bedroom apartments, most targeted to households earning 50% to 60% of the median. Rent for a three-bedroom unit will be roughly $1,500. “New sources of financing are needed so the private sector and government can jointly address this massive problem,” says development director Alec Thomas.
But even with such efforts the housing need remains massive. According to 2023 projections, by 2044 Washington will require about a million new homes, nearly half of which should be affordable to low-income people, including supportive housing for the homeless. The foundation has not disclosed the total investment amount or exact timelines — beyond the 10,000-unit goal. About a dozen projects across the state are currently in progress.
Based on: WA needs affordable rentals for families. Ballmer Group wants to help