- Seattle’s housing market is up 50% over the past five years.
- Wealthy residents include Jeff Bezos and Bill Gates. The latter has a $131 million mansion.
- Despite the boom, affordable housing is scarce and local communities are struggling.
Seattle is home to some of the nation’s hottest tech companies, including Amazon and Microsoft. Not surprisingly, tons of wealthy founders live there. For example, Bill Gates and Jeff Bezos both own homes in Medina, a suburb of Seattle. Starbuck’s longtime leader Howard Schultz lives in the city. And other billionaires including Microsoft’s Steve Ballmer and several members of the Nordstorm family are in the Seattle metro area as well.
With soaring stock prices, particularly for Seattle’s longtime rainmaker Microsoft, area housing prices have been surging in recent years:
However, the housing gains are not equal. Prices are continuing to surge at a double-digit clip in some of Seattle’s wealthiest neighborhoods. Less affluent areas have showed markedly less growth. Our Harsh Chauhan helped explain this dynamic: Interest rates drive housing affordability for the majority of folks. With mortgage interest rates going back up, this means an average worker can afford less and less house for their income, particularly as wage growth has struggled to keep up. Of course, if you’re a tech employee with enough stock options, this hasn’t been a problem. Others have not been so fortunate.
This has led to the unbelievable situation where Microsoft is now having to build subsidized housing in Seattle. In fact, they’re spending a hefty $500 million on the project. Nearly half of this will be on loans to developers to build housing targeting people making $62,000-$124,000 per year. The Seattle housing market has gotten to the outrageous point where the tech companies feel the need to offer a handout to…