Microsoft has announced an unusual bit of corporate political activism: $500 million to support affordable housing in the Seattle area, where rents have shot up considerably as tech workers there and at Amazon have moved in.

Specifically, as the Seattle Times’s Vernal Coleman and Mike Rosenberg explain, the company is spending $225 million on below-market-rate loans to developers to build affordable housing in suburbs to the east of Seattle (like Redmond, where Microsoft is headquartered), targeting families earning between $62,000 and $124,000; $250 million on market-rate loans for developers to build low-income housing (targeting households earning up to 60 percent of the area median income, so as to limit to poorer families); and another $25 million in grants to local groups addressing homelessness.

In the day or so since the plan was announced, I’ve seen two kinds of takes. There’s the tech booster take: Look, our coding overlords aren’t so bad! And there’s the cynical anti-capitalist take: This is a rich company trying to pay indulgences when we should just be taxing it to solve these problems.

The cynical anti-capitalist take is absolutely 100 percent right about this much: Microsoft’s initiative, with the exception of that last $25 million going to grants, is not philanthropy. 95 percent of the money is going into for-profit loans that will make the company money.

Yes, there’s an argument to be made that some of these loans wouldn’t be offered absent Microsoft’s injection of capital, as it’s more profitable to finance high-rent developments if you can only build so many units. Maybe the initiative will reshuffle local developers’ portfolios to make them build more low-rent apartment buildings, duplexes, etc. That would be beneficial. But we typically don’t categorize profitable activities as philanthropy.

It won’t fix the problem, but it’s a good move anyway

That said, I think the Microsoft move is probably a net good for the world. As Mike Rosenberg (who’s one of the best housing reporters in the country, and whom you should follow on Twitter if you’re at all interested in the topic) notes, Microsoft also got the mayors of various nearby Seattle suburbs, including Redmond but also Bellevue, Kirkland, and Kent, to commit to upzoning: relaxing zoning rules to allow developers to build structures with more units.

The mayors promise to “consider opportunities” to “increase density near current and planned public transit,” “reduce or waive parking requirements in transit corridors,” streamline permitting for low-income housing, and on and on and on.

Of course, what’s happening here is, in some ways, more nefarious-sounding than the arch anti-capitalist take presumed: Microsoft is not merely trying to buy support; it’s also pressuring local politicians into changing policies to fit its priorities. From a company with as much money, and as many local residents dependent on it for their livelihood, as Microsoft, that kind of pressure is formidable, and kind of disturbing.

But here’s the thing: These policy changes are what could actually transform Seattle from a place where new high-paying tech jobs are net-negative for poor residents to one where they’re net-positive.

As Matt Yglesias explained in the context of Amazon’s HQ2 search, booms helping out high-income workers appear to make things actively worse for poor people in places with tight housing markets, where rents are high due to scarcity.

In places with slack housing markets, where rents aren’t being bid up and housing is plentiful, influxes of rich workers appear to make life better for poor residents, who both get new wealthy customers at their jobs and can afford their rent.

In the New York Times, E. Tammy Kim called for Seattle and cities in a similar situation to impose targeted taxes on companies that employ many high earners. She calls the proposal “akin to a pollution tax,” with the new employees joining the city and renting apartments serving as the pollution in this analogy.

While high tax brackets on rich people certainly have plenty of merit (and Washington currently lacks any income tax at all), this specific plan is a weird second-best to a normal progressive income tax, and would have the unintended consequence of deterring businesses from raising wages for fear of running afoul of the “you have too many high-paid employees” penalty. But more importantly, Kim’s whole argument sort of misses the point of having cities. Seattle is expensive because it’s a really, really nice place to live. That’s a problem because for years, the supply of housing hasn’t kept up with demand.

The solution isn’t to try to reduce demand by pressuring businesses into going somewhere else, because too many people want to live in this great city. The solution is to make it affordable enough that everyone who wants to live there can live there. That could include subsidies for low-income people, affordable housing requirements, expanded public housing, and the like — but it also has to involve making it legal throughout the city and suburbs to build apartment developments large enough to fit everyone.

The real way to remedy Seattle’s problem is to turn the Seattle area into a slack housing market. And these kinds of mayoral pledges suggest that the city’s suburbs are getting interested in doing that.

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