Amazon to invest $300 million from its Housing Equity Fund for 3,000 new affordable housing units in three metro areas
July 7, 2021
Amazon will invest $300 million to build 3,000 new affordable housing units in the Puget Sound, Arlington/Metro D.C., and Nashville regions. The ecommerce giant will work with "traditional and non-traditional partners," to acquire land near public transit in hopes of creating move-in ready homes by as early as 2025.
The latest commitment is part of Amazon's $2 billion Housing Equity Fund to develop transit-oriented housing for moderate- to low-income families. Amazon will work closely with public transit agencies in the three areas to fund development on either surplus land owned by the agencies or privately owned land near active transit corridors.
The public-private partners believe the funding will help ensure families with low to moderate incomes can afford to live in neighborhoods with easy access to employment, schools, healthcare, education and other amenities.
Of the $300 million, one-third ($100 million) of the funding is earmarked for Puget Sound to accelerate the creation of up to 1,200 units on surplus transit properties near light rail stations across the region. The first $25 million will fund pre-development activities such as site due diligence, engineering and permitting. The remaining $75 million will support the direct creation and construction of new affordable housing.
In a statement announcing its commitment, Amazon officials said they are partnering with Sound Transit and providing below-market funding to help create and significantly expedite the development of affordable housing.
"Transit-oriented development (TOD) is a unique approach to preserving and creating affordable housing options so moderate- to low-income families can afford to live near - and benefit from - quality public transit," stated Amazon, which is now Washington state's largest private employer. "When successful, TOD has a range of benefits, including greater economic activity, reduced traffic congestion and associated environmental benefits, and a strengthened, more resilient labor force."
Commenting on the affordable housing crisis across the Puget Sound region, Sound Transit CEO Peter Rogoff said his agency is expanding rail service into communities that are becoming less and less affordable for working families. The public transit agency builds and operates regional transit service throughout the urban areas of King, Pierce and Snohomish counties.
"We have a forward-leaning policy of partnering with developers to facilitate affordable housing near our stations but obtaining the necessary funding to build those units has always been a challenge," Rogoff stated, adding, "Amazon's $100 million commitment to help fill the gap and make transit more accessible to those who need it the most is truly welcome and appreciated."
The new funding pledge builds on a previous commitment totaling $185.5 million for the King County Housing Authority, which supports health and self-sufficiency through its rental housing and assistance. The below-market loans and grants are enabling KCHA to preserve up to 1,000 affordable homes in Bellevue. As of February 2021, more than 11,000 households rent affordable housing at one of the organization's 138 properties, with 55% of its resident population identifying as non-white.
Amazon officials say they recognize there is no one-size-fits-all answers to affordable housing. "We've taken a unique approach in each of our hometown regions to work with transit agencies in the most efficient, expedient, and regionally pragmatic ways possible.
The $125 million commitment in below-market capital to the Washington Metropolitan Area Transit Authority (Metro) will be used to create more than 1,000 transit-accessible new homes in the Washington, D.C. area. Of the amount allocated, $25 million is set aside to fund development led by minority developers.
In January 2021, Amazon committed $381.9 million in below-market loans and grants to the Washington Housing Conservancy. That investment from its Housing Equity Fund supports the preservation and creation of up to 1,300 affordable homes on the Crystal House property in Arlington.
The third recipient of funds, Nashville, will use its $75 million pledge in below-market capital for developers to create an estimated 800 affordable homes to meet urgent needs. Amazon will choose the development partners to construct affordable homes on privately-owned properties within a half-mile of transit stops. Working with WeGo, the primary regional transit agency, Amazon said priority will be given to minority-led organizations and racially and economically diverse communities.
In January, when Amazon announced its new $2 billion Housing Equity Fund to create or preserve 20,000 affordable homes in three regions, Founder and CEO Jeff Bezos said the Fund would help local families achieve long-term stability "while building strong, inclusive communities."
In each of the three headquarters regions, Amazon supports households making between 30% and 80% of the area's median income. In the Seattle-Tacoma-Bellevue metro areas, this translates to a household of four earning less than $95,250 a year.
"Low-income and minority families are disproportionately affected by an affordable housing shortage in the U.S." states Amazon in its Equity Fund's position statement, adding, "While only governments at the local, state and federal level have the capacity to implement more effective housing policies, we believe the private and public sectors can work together to address this challenge."