Amazon Pledges $2 Billion to Build 20,000 Affordable Homes
Last month, Amazon invested more than $ 2 billion in a new Fair Housing Fund to build 20,000 affordable homes in the US The company will work to create homes in three US cities where thousands of employees live. from Amazon. These communities include Puget Sound in Washington State; Arlington, Virginia; and Nashville, Tennessee.
Not only the Amazon Home Equity Fund It will preserve existing homes, but 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 early 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 at the Crystal House property in Arlington, and;
- $ 185.5 million in below-market loans and grants to the King County Housing Authority to preserve up to 1,000 affordable homes in Washington State, with additional investments in all three regions.
“Amazon has a longstanding commitment to helping people in need, including the Mary’s Place Family Haven We build within our Puget Sound headquarters. The shelter now supports more than 200 women and children who are homeless every night, ”said Jeff Bezos, founder and CEO of Amazon. “This new $ 2 billion Fair Housing Fund will create or preserve 20,000 affordable homes in the three regions of our headquarters: Arlington, Puget Sound and Nashville. It will also help local families achieve long-term stability while building strong and inclusive communities. “
The Amazon Fair Housing Fund includes:
This scope is amazing!
1 – $ 2 billion in below-market capital
Amazon will provide below-market capital, through loans, lines of credit and grants, to preserve and create 20,000 affordable homes. These housing units will serve moderate to low income families in the Puget Sound, Arlington and Nashville region.. In these areas, Amazon will target households that earn between 30% and 80% of the Area Median Income (AMI). For example, this program would include four-person households earning less than $ 79,600 a year in the Washington, DC metropolitan area. This math translates to a family of four making less than $ 95,250 a year in the Seattle-Tacoma-Bellevue metropolitan 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 funding for inclusive housing construction to address the increase in homelessness in the United States. The housing crisis disproportionately affects communities of color, so the grants will go primarily to minorities. Finally, the fund will provide assistance to government partners such as transit agencies and school districts. This funding would give them the resources to create and develop affordable housing initiatives.
“In the booming cities of the US, many affordable apartment buildings for teachers, healthcare providers, public transportation workers, and others with modest incomes are increasingly being converted into luxury apartments, causing displacement and reduces 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 economic stability and mobility for low- and moderate-income families.” .
3 – The first commitments of the Amazon Fair Housing Fund include these two projects:
These generous efforts are already underway.
Washington Housing Conservancy’s Crystal House in Arlington, Virginia
In Virginia, the Amazon Housing Equity Fund’s first commitment includes a below-market loan of $ 339.9 million and grants worth $ 42 million. These went to the Washington Housing Conservancy (WHC), a non-profit 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 decreased by 14,400 units since 2000. Between 2010 and 2018, median home values increased by about 20% after adjusting for inflation. Median rents increased 11%, while median household income increased only 7%.
Using Amazon’s flexible capital, WHC acquired Crystal House in less than two months, a quick turnaround for commercial real estate. Crystal House will offer a rental structure to assist households earning less than 80% AMI. Through the natural rotation of rentals, you will significantly lower rents to attract low-income people.
Conversion of the apartments into affordable housing began on January 1, 2021 and will continue for the next five years. A 99-year contract will ensure that Crystal House remains affordable into the future.
“Washington Housing Conservancy interrupts a market cycle that leads to displacement and offers the kind of stability that allows residents to focus on their future, rather than the uncertainty of rising rents,” said Kimberly Driggins, executive director of the Washington Housing Conservancy . “With the support of Amazon, we are advancing our vision of inclusive mixed-income communities of racially diverse low- and middle-income families and individuals, living close to their employment and accessing high-performing schools and community services.”
King County Housing Authority Portfolio in Washington State
Amazon already maintains a growing partnership with the King County Housing Authority (KCHA) in Washington. His first in-state commitment will fund an initial $ 161.5 million below-market loan and $ 24 million in grants. This will ensure the affordability of 1,000 apartments. $ 4 million of grant funds will preserve housing for extremely low-income households (less than 30% of AMI).
According to a January 2020 review, King County lost more than 40% of its affordable housing in the last ten years. The Housing Authority’s portfolio currently includes more than 7,000 affordable housing units for low- and moderate-income workers. With Amazon’s Housing Equity Fund, KCHA will continue to build its portfolio, preserving affordability by minimizing rent increases. These buildings will remain affordable for at least 99 years.
“Purchasing these properties in Bellevue to ensure they remain affordable is critical to preserving the economic diversity of this area,” said Stephen Norman, Executive Director of the King County Housing Authority. “We are excited to work with Amazon to preserve affordable housing options near jobs, transit, and schools. Our entire region thrives when a variety of housing options are available to everyone. “
Additionally, Amazon donated $ 2.25 million to the nonprofit The Housing Fund in Nashville in December 2020. This effort will help moderate to low-income households maintain home ownership while building financial stability.