Amazon Launches $2B Housing Equity Fund to Preserve, Create 20,000 Affordable Housing Units
SEATTLE — Amazon has launched its Housing Equity Fund, a more than $2 billion commitment to preserve and create over 20,000 affordable housing units in Washington State’s Puget Sound region; Arlington, Va.; and Nashville, Tenn. — three metro areas where the company has or expects to have at least 5,000 employees each in the coming years.
Amazon’s first investments include $381.9 million in below-market loans and grants to the nonprofit organization Washington Housing Conservancy (WHC) to preserve and create up to 1,300 affordable units at the Crystal House multifamily property in Arlington. WHC purchased Crystal House recently using Amazon’s capital. Rents at the property will be significantly lowered to target households earning less than 80 percent of the area median income (AMI).
The conversion of existing apartments to affordable units began on Jan. 1 and will continue over the next five years. A 99-year covenant ensures that Crystal House will remain affordable for the long term.
Arlington County has lost approximately 14,400 privately owned, affordably priced housing units since 2000, according to the county’s government.
In addition, the Seattle-based online retail giant has committed $185.5 million in below-market loans and grants to King County Housing Authority (KCHA) to preserve up to 1,000 affordable homes in the state of Washington. The funds will enable KCHA to complete acquisition financing on 470 recently acquired units across three properties — Pinewood Village, Hampton Greens and Illahee Apartments.
Rents will be affordable to households earning at or below 80 percent of AMI. This commitment includes $4 million to support the preservation of housing for extremely low-income households (less than 30 percent of AMI) at Illahee Apartments. These buildings will remain affordable for at least 99 years.
Over the past 10 years, King County lost more than 112,000 units, or 40 percent, of its affordable housing inventory, according to a January 2020 study from McKinsey.
The below-market capital Amazon is providing comes in the form of loans, lines of credit and grants. In each region, Amazon targets households that earn between 30 and 80 percent of the AMI. In the Washington, D.C. metro area, this figure translates to a household of four earning less than $79,600 per year. In the Seattle-Tacoma-Bellevue metro area, the figure is less than $95,250 per year for a household of four.
The fund also includes $125 million in cash grants to businesses, nonprofits and minority-led organizations “to help them build a more inclusive solution to the affordable housing crisis,” according to a news release. Amazon says that the fund will also give grants to government partners not traditionally involved in affordable housing issues, such as transit agencies and school districts.
“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,” says Sarah Rosen Wartell, president of the 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.”
— Kristin Hiller