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Apple pledges US$2.5 billion to fight California housing crisis

By Matthew Mohan @MatthewMohanCNA

Business

FILE PHOTO: Tim Cook, CEO of Apple, attends the annual Allen and Co. Sun Valley media conference in
Sun Valley, Idaho, U.S., July 10, 2019. REUTERS/Brendan McDermid/File Photo

04 Nov 2019 07:07PM (Updated: 04 Nov 2019 07:45PM)

REUTERS: Apple on Monday (Nov 4) said it would commit US$2.5 billion to easing a housing shortage that has
driven up prices across California, with most of the money dedicated to funds that will be run either with or by the
state government.

One billion dollars will go to a jointly run fund with state officials aimed at jumpstarting delayed or stalled affordable
housing projects. Another US$1 billion will go to a state-run fund to provide first-time home buyer financial
assistance to teachers, nurses and first responders such as police and firefighters, among others.

In an interview with Reuters, Apple Chief Executive Tim Cook said the company felt a "profound responsibility" to
improve California's housing crisis. Apple's current headquarters - a ring of gleaming metal and glass nicknamed the
"spaceship" in Cupertino, California - sits less than five miles from the suburban family home where co-founders
Steve Jobs and Steve Wozniak assembled the first Apple computers in the 1970s.

"We want to make sure that it is a vibrant place where people can live and also raise a family," Apple Chief Executive
Tim Cook told Reuters in an interview. "And there's no question that today that isn't possible for many people, that
the region suffers from an affordability crisis that is existential."

The move comes after Facebook and Alphabet-owned Google both committed US$1 billion toward California housing
initiatives while Microsoft Corp committed US$500 million in the Seattle, Washington area.

Apple said the project-financing fund was the first of its kind. Real estate developers often secure bonds for affordable
housing development but must service the debt during construction until the houses are built and start to generate
revenue. Apple and state officials hope to provide bridge financing during construction at rates below those from
commercial lenders.

Apple said the funding could take two years to deploy but that it hopes to recycle the funding for future projects over
five years.

“This unparalleled financial commitment to affordable housing, and the innovative strategies at the heart of this
initiative, are proof that Apple is serious about solving this issue," California Governor Gavin Newsom said in a
statement.

The US$2 billion in funding will be deployable across California, while the remaining US$500 million will go toward
efforts specific to Apple's home region in Northern California, where fast-growing tech companies have drawn
protests from residents who blame them for rising housing costs.

Apple will make available about 42 acres of land in northern San Jose, California valued at US$300 million on which
it hopes nearly 3,800 affordable housing units can be built. It will also donate US$150 million to a Bay Area
affordable housing fund and US$50 million to Destination: Home, a public-private group addressing homelessness in
Silicon Valley, home to some of the world's most valuable public companies.

"Tech has grown a lot, and it has become a larger portion of the economy," Cook said. "We'd like to be part of the
solution, so that's why we're jumping in."

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