Apple on Monday announced a $2.5 billion plan to help address the housing crisis in California, becoming the latest tech giant in the state to address a problem that it helped cause.
The plan includes $1 billion for an affordable housing investment fund and another $1 billion to help first-time home buyers find mortgages.
Apple joins other Big Tech companies based in California seeking to ease the state’s severe housing crunch. Facebook said last month that it would give $1 billion in a package of grants and loans in California; in June, Google pledged $1 billion for a similar effort.
Microsoft, which is based in Redmond, Wash., pledged $500 million toward affordable housing in Seattle in January.
Apple’s plan includes making available land it owns in San Jose, Calif., which it said was worth $300 million, for new affordable housing; $150 million to support affordable housing in the Bay Area, including long-term forgivable loans and grants; and $50 million to address the causes of homelessness in Silicon Valley. Apple said the money it was pledging could be spent within approximately two years.
The housing supply in the San Francisco area has failed to keep pace as Apple, Google, Facebook and scores of smaller tech-focused companies with headquarters in the region have drawn a steady stream of workers. Since 2005, California has added 308 housing units for every 1,000 new residents, according to the McKinsey Global Institute. In the Bay Area, 676,000 jobs have been added over the past eight years, compared with 176,000 additional housing units.
As a result, housing prices have soared beyond the reach of people trying to find a place to live. In June, the National Low Income Housing Coalition said Bay Area counties accounted for five of the six most expensive places to live in the country. In September, California lawmakers responded by approving a statewide rent cap covering millions of tenants.
Homelessness has also surged in some areas of California, causing tent encampments to spring up. San Jose recently reported 6,200 homeless people, a 42 percent increase over two years.
The growth of major tech companies in Silicon Valley has helped drive up housing prices in the area. Apple employs more than 9,000 people at its sprawling new Silicon Valley headquarters, which is a mile in circumference.
“Affordable housing means stability and dignity, opportunity and pride,” Apple’s chief executive, Tim Cook, said in a statement posted on the company’s website. “When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution.”
In a statement released by Apple, Gov. Gavin Newsom of California called the investment “proof that Apple is serious about solving this issue.”
“I hope other companies follow their lead,” Mr. Newsom said.
On its own, however, investment from the technology industry will not be enough to transform the housing market in California, said Robert Silverman, an affordable housing expert at the University at Buffalo.
Initiatives like the one Apple announced “definitely relieve some of the pressure on the housing market,” Mr. Silverman said. “But you need an extensive policy at the state or federal level to reach more people.”
This is a developing story and will be updated.