Carl Mortished: Tech giants are helping the homeless as it suits them

What is the common thread linking Seattle and the Niger Delta? Before you sigh and turn the page, let me assure you that this isn’t a bad joke about fraud.

Strange as it may seem, these two places have something in common that you might think impossible given the huge gap between the US and Nigeria in terms of geography, wealth and social development. Yet, in both places, big corporations are stepping in to help needy people because the state cannot or will not provide assistance.

In January, Microsoft said it was establishing a $500 million fund to help solve a housing crisis in Seattle, the home town of the software giant. The city was for years a dream destination for Americans who wanted to share the Pacific Northwest lifestyle that seduced the bosses of Amazon, Starbucks and Microsoft.

Years of runaway economic growth have left Seattle with a severe housing shortage and a chronic homelessness problem. The city ranks third after New York and Los Angeles in numbers of people without homes and the expansion of the workforce among tech companies has caused Seattle house prices to soar. It sounds great that Microsoft wants to do something about the problem it helped to create, by putting money back into the community.

However, little of this is charity; it’s business. It is creating a fund of $475 million that will provide low- interest loans to developers to build homes for people on middle incomes. Only $25 million is being allocated to help the homeless, who were reported last year to include more than 11,000 people in King County, which is where Microsoft’s headquarters are.

Moreover, the company is expecting to hire many thousands more as it expands its Seattle HQ. Recycling some of Microsoft’s monster piggy bank of cash into local housing, especially if it helps to keep a lid on the soaring cost of accommodation, is a sensible move for a firm that wants to keep attracting staff to the area. If it’s good for Microsoft and it’s good for Seattle, why worry?

Here in London, we have a housing crisis that easily dwarfs Seattle’s. Perhaps the Mayor of London should ask Facebook, which is building a swanky headquarters in our city, to offer cheap loans for community housing schemes.

At least Microsoft seems to recognise there is a problem. Last year, a posse of big corporates, including Amazon and Starbucks, fought hard for the repeal of a supertax that Seattle council was to impose on big companies with revenues to be spent on affordable housing and the homeless. The intense lobbying did the trick and Seattle scrapped the tax.

The benevolent whimsy of rich companies is not a solution to social problems. It won’t ensure that housing is affordable in Seattle, anymore than your coins in the charity box will house London’s homeless. Corporations have always seen fit to help local communities when it suited their purpose.

Unilever built nice homes for staff at Port Sunlight and in the Niger Delta, multinational oil companies — such as Shell, Total and ExxonMobil — build infrastructure, schools, clinics and fund training. These public services are not the job of oil companies but when the state does not provide, it is a moot point who is responsible for schooling the children. It is fashionable to label this compulsion the licence to operate: the firm provides or it leaves.

We are no longer in the 19th century when the state’s social provision was rudimentary, nor are we in the Niger Delta, where government struggles to meet basic needs.

In cities such as London or Seattle the responsibility for building infrastructure lies squarely with the state. It cannot delegate this role to the private sector without running the huge risk of suborning public authority. The power of a Microsoft or Amazon as employer and local economic engine cannot be overestimated.