Amazon Pledges $2 Billion to Build 20,000 Affordable Homes
Last month, Amazon invested over $2 billion into a new Housing Equity Fund to build 20,000 affordable homes across the U.S. The company will work to create homes in three U.S. cities where thousands of Amazon employees live. These communities include Washington State’s Puget Sound; Arlington, Virginia; and Nashville, Tennessee.
Not only will the Amazon Housing Equity Fund preserve existing housing, but it will create inclusive housing through below-market loans and grants. The funds will go to housing partners, public agencies, and minority-led organizations. According to a press release, the fund will “ensure that moderate- to low-income families can afford housing in resource-rich communities with easy access to neighborhood services, amenities, and jobs.”
Amazon’s first investments include the following:
- $381.9 million in below-market loans and grants to the Washington Housing Conservancy to preserve and create up to 1,300 affordable homes on the Crystal House property in Arlington, and;
- $185.5 million in below-market loans and grants to King County Housing Authority to preserve up to 1,000 affordable homes in the state of Washington, with additional investments to come in all three regions.
“Amazon has a long-standing commitment to helping people in need, including the Mary’s Place family shelter we built inside our Puget Sound headquarters. The shelter now supports over 200 women and children experiencing homelessness every night,” said Jeff Bezos, Amazon founder, and CEO. “This new $2 billion Housing Equity Fund will create or preserve 20,000 affordable homes in all three of our headquarters’ regions—Arlington, Puget Sound, and Nashville. It will also help local families achieve long-term stability while building strong, inclusive communities.”
Amazon’s Housing Equity Fund includes:
This outreach is amazing!
1 – $2 Billion in Below-Market Capital
Amazon will provide below-market capital – using loans, lines of credit, and grants – to preserve and create 20,000 affordable homes. These housing units will cater to moderate- to low-income families in the Puget Sound region, Arlington, and Nashville. In these areas, Amazon will focus on households making between 30% to 80% of the area’s median income (AMI). For example, this program would include homes of four earning less than $79,600 a year in the Washington, D.C. metro area. This math translates to a family of four earning less than $95,250 a year in the Seattle-Tacoma-Bellevue metro area.
2 – $125 Million in Grants to Minority-Led Organizations and Public Agencies
In addition, the Housing Equity Fund will provide $125 million in cash grants to businesses, nonprofits, and minority-led organizations. This will provide funds for building inclusive housing to address rising homelessness in the U.S. The housing crisis disproportionately affects communities of color, so that the grants will go to minorities primarily. Finally, the fund will provide assistance to government partners such as transit agencies and school districts. This funding would grant them the resources to create and build upon affordable housing initiatives.
“In booming cities across the U.S., many apartment buildings affordable for teachers, healthcare providers, transit workers, and others with modest incomes are increasingly being redeveloped into luxury apartments, causing displacement and reducing housing options for working families,” said Sarah Rosen Wartell, President, Urban Institute. “Investments like those announced today by Amazon that help preserve these existing buildings and maintain moderate rent levels are critical to local efforts that promote economic inclusion and support the stability and economic mobility of moderate- and low-income families.”
3 – Amazon’s first Housing Equity Fund commitments include these two projects:
These generous efforts are already underway.
Washington Housing Conservancy’s Crystal House in Arlington, Virginia
In Virginia, Amazon’s first Housing Equity Fund commitment includes a $339.9 million below-market loan and grants worth $42 million. These went to the Washington Housing Conservancy (WHC), a nonprofit organization that preserves homes for low- to moderate-income residents. The grants also included $2 million to fund WHC’s social impact work.
According to the Arlington County government, privately-owned affordable housing has declined by 14,400 units since 2000. Between 2010 and 2018, the median home value increased by around 20% after adjusting for inflation. Median rents climbed 11%, while median household incomes increased by only 7%.
Using Amazon’s flexible capital, WHC acquired Crystal House in under two months, a fast turnaround for commercial real estate. Crystal House will offer a rental structure to help those households earning less than 80% of AMI. Through natural rent turnover, it will decrease rents significantly to appeal to lower-income individuals.
The conversion of the apartments to affordable housing began on Jan. 1, 2021, and will continue over the next five years. A 99-year contract will ensure that Crystal House remains affordable far into the future.
“Washington Housing Conservancy disrupts a market cycle that leads to displacement and offers the kind of stability that lets residents focus on their future, instead of the uncertainty of escalating rents,” said Kimberly Driggins, Executive Director, Washington Housing Conservancy. “With Amazon’s support, we are advancing our vision for inclusive, mixed-income communities of racially diverse middle-income and low-income families and individuals, to live near their employment and access high-performing schools and community amenities.”
King County Housing Authority Portfolio in Washington State
Amazon already maintains a growing partnership with the King County Housing Authority (KCHA) in Washington. Their first commitment in the state will fund an initial $161.5 million below-market loan and $24 million in grants. These will ensure affordability for 1,000 apartments. $4 million of the grant funds will preserve housing for extremely low-income households (less than 30% of AMI).
According to a January 2020 review, King County lost over 40% of its affordable housing in the past ten years. The Housing Authority’s portfolio currently includes over 7,000 affordable housing units for moderate- and low-income workers. With Amazon’s Housing Equity Fund, KCHA will keep building its portfolio, preserving affordability by minimizing rent increases. These buildings will remain affordable for at least 99 years.
“Acquiring these properties in Bellevue to ensure that they stay affordable is critical to preserving the economic diversity of this area,” said Stephen Norman, Executive Director, King County Housing Authority. “We are excited to work with Amazon to preserve affordable housing options close to jobs, transit, and schools. Our whole region thrives when a range of housing options is available to all.”
In addition, Amazon donated $2.25 million to The Housing Fund nonprofit in Nashville in December 2020. This effort will help moderate- to low-income households maintain homeownership while building financial stability.