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Microsoft invests $60 million in King County affordable housing

A $60 million loan will allow the King County Housing Authority to buy five apartment complexes in Kirkland, Bellevue, and Federal Way and stabilize rent long-term.

SEATTLE — Microsoft announced Thursday it will invest $60 million in housing in three King County cities as part of its $500 million pledge to fight the region’s affordability crisis.

This is one of the first specific projects Microsoft has revealed since it announced the half-billion-dollar investment in January.

The tech giant will loan $60 million to King County Housing Authority at below-market interest rates to help the authority buy five residential apartment complexes in Kirkland, Bellevue, and Federal Way. The acquisition will help preserve 1,029 affordable units long-term, saving renters over $450 million in housing costs over a 30-year period, according to Microsoft.

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A spokesperson for the King County Housing Authority said Microsoft purchased Riverstone Apartments, a 308-unit complex in Federal Way, Kendall Ridge, a 240-unit apartment community in Bellevue, and three other apartment complexes in Kirkland. The properties in Kirkland are Emerson Apartments, a 207-unit complex in the Totem Lake neighborhood, Kirkland Heights, a 180-unit complex in the Totem Lake area, and Juanita View, a 94-unit apartment community near Juanita Beach.

Microsoft estimates that the rent-stabilized apartment complexes could help more than 3,000 low- and middle-income people stay in their communities without getting priced out.

Microsoft’s investment, along with $20 million in low-interest debt from King County and $140 million in bonds, will allow rent increases to be driven by property operating costs rather than market pricing, according to Microsoft.

The company cited studies that estimate King County has lost at least 36,000 affordable rental units over the last decade. At the same time, rent prices increased by 43%. The housing authority and Microsoft chose to target apartment complexes in Kirkland, Bellevue, and Federal Way because those communities were at “high risk” of rapidly rising rents or redevelopment to costlier housing projects.

Nearly half of Microsoft’s $500 million investment – $225 million – will go toward projects like these – developing new and existing middle-income housing on King County’s eastside through below-market-rate returns. The company also plans to invest $250 million in market-rate returns to support low-income housing and give $25 million in grants to combat homelessness.

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When Microsoft announced its plan in January, the company said it would deploy most of the money in the next three years.

In June, Plymouth Housing received a $5 million donation from Microsoft to help fund supportive residences for the homeless.