This article was featured on the Austin Community Foundation website, a link to this article can be found here.

AUSTIN, Texas – Austin Community Foundation announced today a $250,000 investment in the Austin Housing Conservancy Fund — a social impact private equity fund managed by Affordable Central Texas — to preserve affordable multifamily rental housing for moderate- and middle-income Austinites.

“While Austin continues to experience exponential growth and economic prosperity, not all Central Texans have the same access to opportunity,” Mike Nellis, chief executive officer, Austin Community Foundation, said. “By partnering with the Austin Housing Conservancy Fund, we are leveraging our resources to help keep educators, artists and other essential members of our workforce from being priced out of Austin.”

The $250,000 from Austin Community Foundation will provide a line of credit to support the Fund’s momentum in purchasing apartment communities serving residents earning between 60 to 120 percent median income as defined by the U.S. Department of Housing and Urban Development, which equates to $34,200 to $68,400 for an individual.

“Preserving stable housing for Austin’s workforce provides a positive impact to all who live in Central Texas”, David Steinwedell, president and CEO, Affordable Central Texas, said. “We are honored to obtain this investment by Austin Community Foundation through FundATX. The revolving line of credit will increase our ability to acquire properties quickly and can be easily expanded through additional participants to increase its effectiveness.”

Austin Community Foundation’s investment is made through FundATX, the organization’s impact investing program that supports projects intended to create a positive social outcome along with a financial return. This strategy allows the foundation to invest in solutions to local issues while generating a financial return on philanthropic dollars that can be recycled to consistently fund new projects.

Recently, Austin Community Foundation announced a call for investors to join FundATX, which aims to improve the economic security of Central Texans. Since January, the Foundation has raised approximately $500,000 from local business leaders and philanthropists, and the fund now has approximately $2.5 million committed.

Learn more about FundATX at

Affordable Central Texas (ACT), the investment manager and sponsor of the Austin Housing Conservancy Fund, a local open-ended private equity investment fund that preserves affordable multifamily rental housing for moderate- and middle-income Austinites, announced today it has received a $450,000 operating grant from St. Davids Foundation.

We’re incredibly grateful to St. Davids Foundation not only for the grant, but for their continued support, said David Steinwedell, CEO of Affordable Central Texas. We share a common goal to increase Austinites access to opportunity, whether that means proximity to good schools, transportation options or employment, and Im eager to explore the positive impact that stable housing can have on Austins moderate- and middle-income workforce.

Affordable Central Texas is among 41 nonprofits that received grants totaling more than $18 million from St. Davids Foundation in December 2018. The grant to be distributed to ACT over two years will be used to improve operations, assess residents educational, health care and financial needs, and determine and measure the impact of the Funds property purchases.

Its our vision to make Central Texas residents the healthiest people on the planet, said Earl Maxwell, CEO of St. Davids Foundation. As rent prices increase, our teachers, first responders, nurses and others are pressured with a choice nobody should ever have to make: housing or opportunity. By partnering with ACT, we want to make sure Austins workforce has a stable place to live and access to opportunity.

To learn more about Affordable Central Texas, visit To learn more about the Fund, visit

About Affordable Central Texas

Affordable Central Texas, a 501(c)(3) nonprofit, is the sponsor and investment manager of the Austin Housing Conservancy Fund. ACT was formed in 2016 by a group of highly experienced Austin real estate, finance and affordable housing professionals. ACT has been the recipient of several recent operating grants from the St. Davids Foundation, TEGNA and SynerMark Properties in addition to previous grants from the Michael and Susan Dell Foundation, Wells Fargo, Seton and IBC Bank, as well as contributions from numerous individuals. For more information, visit

About the Austin Housing Conservancy Fund

The Austin Housing Conservancy Fund is an open-ended social impact private equity fund. The first of its kind to provide long-term moderate- and middle-income housing preservation, the Funds purpose is to purchase and preserve affordable multifamily rental housing for Austinites. Raised, funded and deployed in Austin, the Fund delivers risk-adjusted financial returns through flexible, discretionary investments that directly benefit Austins teachers, nurses, first responders and other core workers. For more information, visit

About St. Davids Foundation

St. Davids Foundation is one of the largest health foundations in the United States, funding more than $70 million annually in a five-county area surrounding Austin, Texas. Through a unique partnership with St. Davids HealthCare, a Malcolm Baldrige award-winning hospital system in Central Texas, the Foundation reinvests proceeds from the hospital system back into the community, with the goal of building the healthiest community in the world. St. Davids Foundation also operates the largest mobile dental program providing charity care in the country and runs the largest healthcare scholarship program in Texas.

The foundations strategic priorities include:

  • Providing Central Texans with the healthiest care in the world,
  • Creating the healthiest places for Central Texans to live, and
  • Helping Central Texans become the healthiest people they can be.

Learn more about St. Davids Foundation at

Victoria Jett
Red Fan Communications
O: (512) 551-9253 / C:
(512) 468-1016

This article was featured on the Community Impact Newspaper website, a link to this article can be found here.


As lawmakers focus on rolling back property tax rates, renters also face affordability issues

Updated March 5 at 9:45 a.m. to clarify the recommendation for affordable housing units made in the Austin Strategic Housing Blueprint

In November, University of Texas senior Allie Nunas founded the West Campus Neighborhood Association.

“We have a stake in the city,” Nunas said, citing the cost of student housing, inadequate lighting and safety issues as resident concerns. “Why shouldn’t we try to make Austin good, even if we’re here for … a short period of time?”

As in most Central Austin neighborhoods, West Campus is majority-renter.

Census data from 2017 found that 54.7 percent of city residents rent; in some Central Austin ZIP codes, the portion is much larger. Everywhere, it is likely to grow as home prices continue to skyrocket, wages remain stagnant and student loan debt swells.

However, tenant advocates, academics, researchers and city officials agree the concerns of property owners often overshadow those of renters, who also face challenges of affordability and representations.

“The vast majority of the most-vulnerable communities rent,” said Council Member Greg Casar, who represents majority-renter District 4. “It’s important for us to spend extra attention to renters.”

American Dreamers

In 2018, the median home price in the city of Austin was $375,760, per the Austin Board of REALTORS. This price is out of reach for most residents, who often have to choose between renting in the city or buying property somewhere more affordable, such as Manor, where the median home price in 2018 was $187,000, or Elgin, where it was $203,900.

“[D]emand [for homeownership]is not necessarily going away,” said Holly Davis, director of public affairs for the Home Builders Association of Greater Austin. “It’s whether … they can afford to get into the market.”

Despite these barriers, renters often face “second-class” status, said Shoshana Krieger, project director of Building and Strengthening Tenant Action, or BASTA, a local nonprofit that helps tenants organize.

“I think there is a stigma against renters,” Krieger said. “[There’s a perception that] if you did all the things which the American dream affords you, then you wouldn’t be a renter.”

High cost, fewer benefits 

A growing portion of Austin renters are cost-burdened, or spending more than 30 percent of their income on housing, the amount recommended by the U.S. Department of Housing and Urban Development.

In 2015, 25 percent of four-person households earning between $34,550 and $82,920 were cost-burdened, up from 9 percent in 2000, according to a 2017 report by the Urban Land Institute.

The cost-burden rate for those earning less jumped from 69 percent to 91 percent in the same period.

The increasing cost-burden rate is the result of many factors, including a lack of adequate affordable housing in Austin and the high cost of new development.

According to the Austin Strategic Housing Blueprint, which Austin City Council adopted in 2017, the city needs to construct 135,000 housing units over 10 years to meet demand—with 60,000 of those units affordable to families making 80 percent of less of the area’s median family income. This is an expensive proposition.

“You can’t build brand-new rental housing at a price that is affordable to people in this income bracket,” said David Steinwedell, CEO of the local nonprofit Affordable Central Texas, citing the cost of land, labor and permitting delays.

Like homeowners, renters searching for affordable housing in Austin have few good options.

“A lack of housing is a real challenge to renters because if you don’t have anywhere to go. You’re at the mercy of your landlord,” Casar said.

Austin homeowners also have advantages—tax benefits such as the homestead exemption, the ability to capture some of the rising value of their home by selling—that make them “much less vulnerable to displacement” than renters, according to the 2018 report “Uprooted,” which City Council commissioned to study displacement and gentrification in Austin.

“[L]owering property taxes for homeowners would help low-income homeowners remain in their homes but also shift more of the property tax burden to landlords, potentially contributing to increased rents and hurting Austin’s vulnerable renters,” the report found.

Seeking representation

Property taxes are the main revenue source for the state of Texas, a burden that falls most squarely on the shoulders of property owners.

State lawmakers have acknowledged this and on Jan. 31 introduced two bills that would allow voters to roll back tax rates if local property tax revenue exceeds 2.5 percent year-over-year growth.

“We can no longer sit idly by while homeowners are reduced to tenants of their very own property with taxing authorities playing the role of landlord,” Texas Gov.Greg Abbott said in January 2018 while campaigning for re-election.

Renters shoulder these costs, too, if property owners raise rent to cover increasing tax bills, but they lack the protections and political agency of homeowners.

“Tenant protections in the state of Texas are minimal at best,” Krieger said, citing laws that prohibit inclusionary zoning, which requires private developers to subsidize affordable housing on-site; source-of-income protections, which prevent landlords from discriminating against tenants who receive housing vouchers; and, in nearly all cases, rent control.

Neighborhood associations in Central Austin, which are influential among council members, tend to be dominated by homeowners, said Elizabeth Mueller, an associate professor at the University of Texas School of Architecture and co-author of the “Uprooted” report.

“We do have a lot of people who are longtime tenants living in neighborhoods throughout Austin. But we don’t do a good job of making sure they’re included in neighborhood associations,” Mueller said.

Some Austin neighborhood associations stipulate in their bylaws that voting memberships may only be open to homeowners, such as downtown’s Judges Hill Neighborhood Association.

Frustrated with these dynamics and some of the decisions being made by the 45-year-old Hyde Park Neighborhood Association, a group of area residents formed Friends of Hyde Park in 2015.

The association is free to join, offers online voting to encourage participation and counts approximately equal numbers of renters and owners as members.

“If we didn’t have our second neighborhood association as a dissenting voice, you just don’t have that same sort of power structure that has influenced city of Austin politics for so long,” President Pete Gilcrease said.

Staking a claim

Still, renters may have reasons to be optimistic.

Austin City Council now has three renters among its ranks—Paige Ellis, Jimmy Flannigan and Natasha Harper-Madison—up from just one in the prior term.

Its members have also committed to finding solutions for cost-burdened residents, most notably by presenting a $250 million affordable housing bond to voters, 74 percent of whom supported it. The bond includes $94 million for affordable rental housing.

And Austinites are organizing in new ways, whether with the help of BASTA, in Hyde Park or on campus.

“We live here, too,” Nunas said.

This article was featured on the Culture Map Austin website, a link to this article can be found here.
By Lauren Jones Feb 19, 2019, 9:27

David Steinwedell, CEO of the Austin Housing Conservancy, a local, open-ended private equity investment fund, is on a mission to preserve the city’s naturally occurring affordable housing and help keep Austinites in their homes. Steinwedell, who has 35 years of real estate experience and is the former executive director of the educational and research nonprofit, Urban Land Institute, has seen both the positive and negative consequences population growth has had on the city.

“Austin has experienced fantastic growth,” he says. “Any other city would be jealous of what has happened economically. The challenge is that with growth the cost of rent has outpaced wages and now has migrated to affect not just traditionally low-income but the workforce as well. Since 2011, rent has increased by 69 percent and wages by just 15 percent.”

On a mission to provide relief, and with backing from Mayor Steve Adler, the Austin Housing Conservancy wants to secure continuous stable housing for thousands of Austinites. Thus far, Steinwedell and his team have purchased three multifamily buildings around the city.

With rent prices steadily increasing, more and more Austinites have become rent-burdened, a term Steinwedell explains as one’s rent account for 30 percent or more of total monthly income. That is what the Austin Housing Conservancy is fighting against.

“We wanted to see if we could take common institutional investment vehicles and adapt it to see if there could be a way to track private capital to address an issue for the public good,” he says. “So far, we have 792 units that serve 1,200 people. If other companies had come in and bought those buildings, those residents would most likely have been displaced.”

The three buildings under the Austin Housing Conservancy today are for those making approximately 80 percent of the median income, in layman’s terms, around $48,000 a year for a one-person household. The first building is near Wells Branch — a timely acquisition. With the announcement of the new Apple headquarters, rent prices in the Northwest Hills and Wells Branch neighborhoods have already risen by 10 to 20 percent, says Steinwedell.

In the last decade, the naturally occurring affordable units have been disappearing at an alarming rate to make way for luxury apartments and condos. While Steinwedell knows that those luxury high rises are meeting a market demand, it does put more pressure on the working class.

“Ultimately we want to figure out how to build new properties that are affordable,” he says. “Right now, it’s so expensive to build anything that you can’t charge rents that are affordable.

For Steinwedell, it’s not just about preserving housing, it is also about preserving the Austin culture and the quirks that “keep it weird.”

“It’s about your kid’s teacher, it’s the nurse at the doctor you go to, it’s the tattoo-covered barista at your favorite coffee shop,” he says. “If they can’t afford to live here anymore then it starts to rip Austin apart as a really cool place to live.”

Currently, the Austin Housing Conservancy is an Austin-focused fund, but in the future Steinwedell hopes to branch out to other large cities such as San Antonio, Dallas, and Houston, making Texas as a whole a more affordable place to live for all.

With Austin’s booming economy, the city is becoming less affordable for a good portion of the city’s middle class, but a nonprofit is trying to help by buying up properties across town to keep the costs of rent within reach.

AUSTIN, Texas — Artists, nurses and even teachers are having to look outside the city of Austin for more affordable rents, but a nonprofit group is working to keep them here.

If you’ve lived in Austin even just couple of years, you’ve probably noticed it’s getting more and more expensive. There’s construction all around. New apartments are going up to meet the demand of a growing city and older apartments are taking in new residents.

“I just love how quiet it is,” said Blake Bartosh, who lives in Austin. “I can listen to the waterfall that’s right by my window.”

So, it’s a great feeling when you find an apartment that has just what you’re looking for, but not everyone is so fortunate, many can’t afford today’s rents.

“A teacher who is in AISD can’t afford now to live anywhere close to the school they teach in,” said David Steinwedell, president and CEO of the nonprofit Affordable Central Texas.

Steinwedell said Austin teachers are often priced out of Travis County and end up leaving town permanently.

“Usually their kids move and go to a different school system and eventually the teacher says, why am I commuting back and forth? Why don’t I just go teach in the Dripping Springs School District or the Elgin School District, now you’ve lost not only a teacher but you’ve lost a lot of students,” said Steinwedell.

Real estate experts like Kevin P. Scanlan said droves of people moving here from the east and west coasts add to the demand and the cost.

“The chamber of commerce said more than 150 people move to Austin every single day, so that, of course, is not only going to have an impact on the availability of rental property but also the prices,” said Scanlan, president of Austin Board of Realtors and owner of All City Real Estate.

Austin’s rent prices are reaching new heights. Zumper, a platform that helps people find apartments, shows the average cost of a one bedroom is now more than $1,200 per month. A new report from Rent Café shows last year the city’s prices went up $57 per month from the year before. That’s $15 higher than the national average.

“It’s not surprising at all because how attractive Austin is as a destination city,” said Scanlan. “You see small one bedroom or even studio apartments in the downtown area going for well over $2,000 a month because people are willing to pay that to live in this city.”

The problem for Texas renters is no one regulates these prices. So, Affordable Central Texas launched an investment fund called the Austin Housing Conservancy to help Austin’s middle class.

“Teachers, nurses, but even bank tellers, even like entry-level programmers,” said Steinwedell.

Thanks to donations and investors, the group bought several existing properties at the end of 2018: Bridge at Northwest Hills Apartments, Bridge at Terracina Apartments and The Preserve at Wells Branch.

Many of them were built in the 1970s to early 2000s, like the Bridge at Northwest Hills apartments where Blake Bartosh lives.

“It’s like five minutes from work,” said Bartosh. “I don’t have to deal with any commuting, so it’s really nice and it’s a really nice area.”

Bartosh is a music teacher at Doss Elementary in Austin and said he chose to live here for the location and affordability.

“Money was a big factor and I had to look at where I was going to live and see if I could make it on my own basically,” said Bartosh. “There are a lot of teachers that do have to commute.”

“We’re going to hold our rents to wage growth,” said Bartosh. “That’s what we’re going to do from an affordability standpoint is not increase rents 5-7 percent a year.”

The group looks to help those who make between $36,000 to $72,000 a year. Steinwedell said they’ve helped about 1,200 people living in their complexes and will work to help more.

“If you look at a map of what we own in three or five years, what we really hope it looks like is there’s dots everywhere,” said Steinwedell.

“It just helps me stay here longer,” said Bartosh. “I love this area and I don’t want to move away.”

KVUE and the TEGNA Foundation granted Affordable Central Texas $5,000 in 2018 for their efforts to help the middle class find an affordable place to live.

6 February 2019 Mike Phillips, Bisnow London

For years, traditional commercial real estate investors stayed away from investing in residential of any kind, citing low returns and repetitional risk. Then the private rented sector took off and drew them in. Now, they are venturing into a sector that was really out of bounds: affordable housing. Social impact investing is on the up.

CBRE Global Investors last month announced it had raised £250M of equity from 13 investors for the CBRE UK Affordable Housing Fund. The amount of equity exceeded its target.

Hedge fund manager Man Group has poached Shamez Alibhai from Cheyne Capital with a view to raising a fund to invest in social housing and associated sectors. Alibhai ran Cheyne’s £250M Social Property Impact Fund.

Franklin Templeton this month made the first acquisitions for its €158M pan-European Franklin Templeton Social Infrastructure Fund, including a medical clinic in London.

While returns from affordable housing are low, they are also stable and predictable, which is driving the influx of interest.

“It is in the newspapers every day — there is a big structural mismatch between the demand and supply of affordable housing,” CBRE GI Head of UK Funds Hannah Marshall said.

“One of the obstacles holding back delivery is the changes to grants and funding for registered providers [of social and affordable housing] and housing associations. There is an opportunity for the private sector to step in and fill that gap.”

CBRE GI’s fund is open-ended and has a target return of 6%, which Marshall said is appealing to institutional investors because it matches their need for long-term income. CBRE GI is not setting up its own registered provider (the government-regulated entity required to invest in the sector directly in the UK) but instead it will partner with these bodies and housing associations, which will manage the assets.

It will forward fund new developments and invest in standing assets, including social and affordable rented housing, shared ownership and other tenures such as key worker housing and homeless hostels. It will stop short of any assets where the operations include the provision of care.

Marshall said CBRE GI would not be looking for assets with index-linked leases, but instead would share the risk of income linked to government policy.

“The reality is, even in the main commercial sectors, you are not insulated from government policy. But the key thing here is the housing crisis is not going away.”

From the point of view of being good for the world, CBRE GI is working with advisory firm The Good Economy to create a way of measuring the fund’s social impact, both at the point when acquisitions are made and over the course of the life of the fund. Such standards do not exist, and have to be created from scratch.

“The key principle is to help people unable to rent or buy in their local community and to deliver services to that community,” Marshall said. “We will continue to measure the fund’s impact.”

Read more at:

Thursday, January 17, 2019 by Chad Swiatecki

An investment group focused on preserving workforce housing units around Austin has announced plans to add 2,000 more apartment units to its portfolio in 2019.

The Austin Housing Conservancy Fund expects to purchase four apartment complexes around the city this year in addition to the three complexes it bought in 2018 that gave it nearly 800 units with roughly 1,200 residents.

Unlike traditional real estate investment groups, the conservancy was organized with a nonprofit organization and created specifically to keep rents in its portfolio affordable to residents and families earning between 60 and 120 percent of the area’s median income. Units targeted at that income level are harder to build and preserve than lower-income units classified as affordable because there are fewer subsidies and other government programs available to decrease their costs.

David Steinwedell, CEO of Affordable Central Texas, which sponsors and manages the fund, said there is growing upward pressure on rents in Austin caused by outside investors who see the city as an attractive market. That demand makes it common for buyers to purchase workforce housing stock, make high-end improvements and charge upper-class rents.

“There continues to be a ton of capital coming from outside of Austin that wants to invest in property here right now, which has been exacerbating the problem, and it also makes it a very competitive acquisition market,” he said. “Over time I’m hoping that we’ll be able to grow our pace, but right now I think four more complexes is a reasonable expectation of what we can accomplish in 2019.”

Last year the conservancy closed on three properties located in North and Central Austin: The Preserve at Wells Branch, Northwest Hills and The Place at Terracina. Steinwedell said he would like the next round of purchases to include locations in South and West Austin and to be located near transit, job centers and grocery stores, but that the availability of markets up for sale and their prices are large factors in the buying process.

Thus far the conservancy has been funded with investments from 25 members in Austin, with that number expected to approach 50 this year and regional and national investors expected to come on board as well.

Steinwedell said the move into workforce housing has had its challenges, including a menu of maintenance requests by previous management, and move-out threats by nearly two dozen tenants at one of the properties. He said those issues were addressed quickly and tenants have been pleased to hear that rents will stay in line with area incomes rather than growing at a nearly double-digit rate.

“The upside surprise is how welcome we’ve been made to feel by the existing tenants when they start understanding that our program isn’t to to kick them out like a lot of others where they’re going to come in to do these massive renovations and they displace all the tenants and raise rents dramatically,” he said. “When we tell them that no, no, you’re not going to be asked to move and in fact we’d like for you to stay, that’s kind of a happy day for a lot of people.”

Steinwedell said in the future he expects the conservancy could get into the development game and work to build new housing stock for working families, but for the near term its focus is on growing its portfolio to a size that can offer housing to around 20,000 residents over the next decade.

Also participating in the conservancy’s 2018 purchases was Bellwether Enterprise Capital, a national lender that offered the Fannie Mae loan of nearly $50 million for the Northwest Hills and Terracina properties.

Kevin Bowen, Bellwether’s senior vice president, said affordable and workforce housing is a priority for the company because it is seen as stable and less risky than projects that require more capital for expensive improvements to command high rents.

“We view these affordable housing projects … we think that they are stronger than a market-rate project because they’re not relying on those rent increases but they’re also very much needed in the society we live in today,” he said. “And in Austin with the rate that rents are increasing there and in other major areas, you have even more of the need for affordable housing.”

Photo of The Preserve at Wells Branch courtesy of the Austin Housing Conservancy.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.

By Karen Weise

SEATTLE — The Seattle area, home to both Microsoft and Amazon, is a potent symbol of the affordable housing crisis that has followed the explosive growth of tech hubs. Now Microsoft, arguing that the industry has an interest and responsibility to help people left behind in communities transformed by the boom, is putting up $500 million to help address the problem.

Microsoft’s money represents the most ambitious effort by a tech company to directly address the inequality that has spread in areas where the industry is concentrated, particularly on the West Coast. It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

Microsoft’s move comes less than a year after Amazon successfully pushed to block a new tax in Seattle that would have made large businesses pay a per-employee tax to fund homeless services and the construction of affordable housing. The company said the tax created a disincentive to create jobs. Microsoft, which is based in nearby Redmond, Wash., and has few employees who work in the city, did not take a position on the tax.

The debate about the rapid growth of the tech industry and the inequality that often follows has spilled across the country, particularly as Amazon, with billions of taxpayer subsidies, announced plans to build major campuses in Long Island City, Queens, and Arlington, Va., that would employ a total of at least 50,000 people. In New York, elected officials and residents have raised concerns that Amazon has not made commitments to support affordable housing.

Microsoft has been at the vanguard of warning about the potential negative effects of technology, like privacy or the unintended consequences of artificial intelligence. Executives hope the housing efforts will spur other companies to follow its lead.

“We believe everybody has a role to play, and everybody needs to play their role,” said Brad Smith, Microsoft’s president and chief legal officer.

The company’s strong finances, a sign of its resurgence under Satya Nadella as chief executive, have given it resources to deploy, Mr. Smith said. In October, the company reported net income of $8.8 billion in its most recent quarter, up 34 percent, and it had almost $136 billion in cash and short-term investments on its balance sheet. The company’s stock has risen steadily under Mr. Nadella, and Microsoft is now valued at over $800 billion.

A number of other tech businesses have tried to address the homeless crisis. Amazon’s chief executive, Jeff Bezos, has supported homeless service providers through his personal foundation, and the Salesforce chief executive, Marc Benioff, helped fund a proposition in San Francisco to tax businesses to pay for homeless services. Voters approved the tax in November, rejecting opposition from some tech leaders, including Twitter’s chief executive, Jack Dorsey.

Others plan to build housing for their own employees. Such housing may help with demand, but it has also reinforced the impression that the companies are focused too closely on their own backyards.

Microsoft began researching the region’s housing last summer, after the nasty tax fight in Seattle and around a peak of the housing market. The company analyzed data and hired a consultant to decide how to focus its work. The area’s home prices have almost doubled in the past eight years, and Mr. Smith said he learned that “the region has counterintuitively done less to build middle-income housing than low-income housing, especially in the suburbs.”

That squeeze hits a range of workers. “Of course, we have lots of software engineers, but the reality is that a lot of people work for Microsoft. Cafeteria workers, shuttle drivers,” Mr. Nadella said this week at a meeting with editors at the company’s headquarters. “It is a supply problem, a market failure.”

Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region. Some of those loans may be made through the federal programs that provide tax breaks for low-income housing.

The company plans to invest the money within three years, and expects most of it to go to Seattle’s suburbs.

The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

The remaining $25 million will be grants to local organizations that work with the homeless, including legal aid for people fighting eviction. The Seattle Times reported Wednesday that if the $500 million were put into one project, it would create only about 1,000 units, so instead Microsoft will most likely put smaller amounts in many projects to help build “tens of thousands of units.”

“There is almost no level of housing that isn’t direly needed,” said Claudia Balducci, a member of the King County Council who helps lead the Regional Affordable Housing Task Force.

report in December by the task force said that the region needs 156,000 more affordable housing units, and will need 88,000 more units by 2040 to accommodate future growth.

A growing body of research has tied the lack of affordable housing to increasing homelessness. A December study from the real estate website Zillow said that was particularly true when households pay more than a third of their income in rent. The New York, Boston, Los Angeles, San Francisco and Seattle regions — the country’s largest tech hubs — have all already crossed that threshold.

“The idea that you can live in your bubble and put your fingers in your ears just doesn’t work anymore,” said Steve Schwartz, head of public affairs at Tableau Software, which is based in Seattle.

Amazon in recent years has worked closely with Mary’s Place, a homeless shelter for women and children in Seattle, and is integrating a shelter for about 65 families into one of its new buildings. Amazon has paid tens of millions of dollars to the city’s affordable housing trust fund as fees to build in the core of Seattle.

Amazon declined to comment.

Google supported the City of Mountain View’s plan to add 10,000 housing units in an area it’s developing, with 20 percent designated for lower-income residents. And Facebook has planned to build 1,500 apartments near its Menlo Park headquarters, with 15 percent to be affordable.

Microsoft has begun a major overhaul of its main campus in Redmond, committing billions of dollars in renovations and connecting it to a light rail station under construction. The company helped finance a successful campaign for voters to approve more property taxes to pay for transportation. This new investment in housing takes its commitments a step further.

“This is where Microsoft is going to be, and the region needs to work,” Ms. Balducci said. “I don’t think this is wholly altruism.”