WA needs affordable rentals for families. Ballmer Group wants to help

Despite a boom in studio and one-bedroom apartment construction, the Seattle area struggles with a long-standing shortage of affordable family-sized homes. A new philanthropy-funded effort takes aim at that problem.

The Ballmer Group announced Thursday it plans to offer developers forgivable loans to help fund at least 10,000 affordable homes across the state with two or more bedrooms.

It's the latest attempt to spur much-needed construction of affordable housing, particularly for families with children. Research finds housing is a key factor in children's health and education.

"Without a safe and stable place to call home, we know it's really super hard for a kid to thrive in school, be healthy - essentially reach their full potential," said Terri Ludwig, CEO of the philanthropic organization founded by former Microsoft CEO Steve Ballmer and Connie Ballmer.

The Ballmer Group isn't the first philanthropy to take on the housing shortage. Amazon and Microsoft fund loans or grants for affordable housing projects, following years of high-tech salaries contributing to the region's affordability crisis. Add those and others to hundreds of millions of dollars in state, local and federal funding each year.

Still, the need is far greater than philanthropy can solve.

According to 2023 state projections, Washington state needs roughly 1 million new homes by 2044, and nearly half of those homes need to be affordable for people making low incomes, including supportive housing for people experiencing homelessness.

For every 100 low-income renters in the state, there are just 44 available homes they can afford.

For low-income families with children, Washington needs about 3,000 new affordable homes per year, based on a Ballmer Group analysis of census data and state housing-need projections.

The Ballmer Group didn't name a total dollar amount it planned to spend or a firm timeline beyond its goal to fund 10,000 homes. Funding will vary by project but developers could get up to $150,000 per unit for new rental housing in the state.

Developers will not have to repay the loans if they keep the units affordable for 60 years and follow other rules. To qualify, at least half of units in a development must have two or more bedrooms and be affordable to people making 50% of area median income or less, about $74,000 for a family of three in the Seattle area.

A key difference in Ballmer's efforts: The program aims to encourage developers to tap into private funding, rather than already stretched public resources, to make deals happen.

Most affordable housing deals cobble together an array of public and private funding sources. Ballmer is offering funds only to deals that don't rely on competitive public funds. The hope is to encourage new affordable housing plans that aren't already in the works, including from private developers who usually build higher-cost housing.

That's the "potential magic," said Steve Walker, executive director of the Washington State Housing Finance Commission, which will administer the program.

"Year over year, we have more good proposals than we can fund," Walker said. "This is really trying to do it differently."

The program will face tests, especially in a state where construction costs are so high.

Microsoft, for example, pledged $500 million in 2019 for affordable housing in the Puget Sound region. President Brad Smith hoped then that would help build 50,000 units, he told The Seattle Times this year. Instead, after a $750 million commitment, the company has helped create or preserve just 16,500 homes. Smith has urged policymakers to introduce regulatory changes to drive down costs.

Developers rarely build larger apartments, often citing regulations and high construction costs.

There's also a question of demand: As families grow, many people gravitate toward detached houses, either because they prefer them or because they feel like the only option available with enough space. But renting or buying a single-family home has become far too costly for many people, especially those struggling to make ends meet on lower incomes.

Building family-sized housing is traditionally quite cost-prohibitive," said Alec Thomas, head of development at Great Expectations, a private developer focused on affordable housing.

Thomas' firm is a test case of Ballmer's new model. The company broke ground this spring on a 102-unit apartment building near Puyallup. The project taps into Ballmer funding, along with private financing.

The site will include two-, three- and four-bedroom apartments, most of them for people making between 50% and 60% of area median income, with rent for a three-bedroom apartment as low as $1,500.

New types of funding sources are needed "so that both the private side and the public side are helping to solve this enormous need," Thomas said.

Elsewhere in the state, Ballmer Group has about nine other projects in the works so far.

The Ballmer Group funds some Seattle Times initiatives. The Seattle Times maintains editorial control over this and all its coverage.

This story has been updated to correct Brad Smith's title at Microsoft.

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This story was originally published June 11, 2026 at 4:55 PM.