Microsoft’s headquarters in Redmond, Wash. (GeekWire Photo / Monica Nickelsburg)

Microsoft detailed new investments in affordable housing around its Redmond, Wash., headquarters Thursday as part of a $750 million program designed to alleviate the region’s real estate crunch.

The new investments total $65 million, which Microsoft says will create more than 1,000 new affordable housing units in the Seattle region.

To reduce rents in existing market-rate housing in Bellevue and Kirkland, Wash., Microsoft will put $40 million into a fund operated by Urban Housing Ventures, a privately funded company focused on creating affordable apartments. UHV will use the funds to reduce the rent for 40% of units in three apartment buildings to middle-income levels.

UHV says the novel model allows investors such as itself to purchase apartment buildings and then lower the rents on some of the units without losing financial viability. The reduced rent allows buildings to operate at lower vacancy and turnover rates, offsetting some of the costs of converting the units, according to UHV. Other participants in the fund include Stream Real Estate, Freddie Mac, Washington Federal, Washington Trust, and Berkadia.

“We need fresh, creative approaches like this one to quickly bring new private sector financing and funding to address the affordable housing crisis – in our home state of Washington and nationwide,” Microsoft President Brad Smith said in a statement.

Microsoft will contribute another $25 million to the Washington State Housing Finance Commission to help acquire land for affordable housing. The Expanded Land Acquisition Program will offer loans to help affordable housing developers compete with commercial real estate buyers in the Seattle area’s hot market.

Microsoft launched its landmark affordable housing fund in early 2019 with an initial commitment of $500 million. The company added an additional $250 million to the pledge in January.

Several other tech giants in Seattle and the San Francisco Bay Area announced similar affordable housing programs in the wake of Microsoft’s commitment. The tech boom of the past decade has coincided with surging real estate costs in the two regions and many have called on companies like Microsoft to help mitigate the affordable housing crisis.

Including the latest investments, Microsoft has committed about $450 million of the pledged $750 million, which the company estimates will create and preserve more than 8,000 affordable housing units.

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