Amazon Earmarks $2B for Affordable Housing Near its HQs

Amazon has pledged more than $2 billion toward affordable housing in three communities across the country. It joins a handful of other affordable housing funds that have come to market recently. 

The company’s Housing Equity Fund will preserve and create more than 20,000 affordable housing units through below-market capital in the form of loans, lines of credit, and grants. Its initial focus will be on Washington State’s Puget Sound; Arlington, Virginia; and Nashville, Tenn.—all communities where the e-commerce giant has or expects to have at least 5,000 employees in the future. In each of those areas, Amazon is targeting households making between 30% to 80% of the area’s median income.

Amazon’s first investments include $339.9 million in below-market loans and grants worth $42 million to the nonprofit Washington Housing Conservancy, with an aim toward preserving and creating up to 1,300 affordable homes on the Crystal House property in Arlington’s National Landing neighborhood, as well as $185.5 million in below-market loans and grants to King County Housing Authority to preserve up to 1,000 affordable homes in Washington State. 

Arlington County government data shows that the region has lost 14,400 privately-owned affordably priced housing units since 2000, and that median income has failed to keep pace with the increase in median home values and rents. With Amazon’s investment, WHC purchased Crystal House with a 99-year covenant to ensure the property remains affordable in the long term. The sale also includes the conversion of existing units to more affordable apartments on January 1.

The company’s commitment in Washington State will fund an initial $161.5 million below-market loan and $24 million in grants that will allow the King County Housing Authority to complete acquisition financing on 470 recently acquired units across three properties and to support housing preservation of housing units for extremely low-income households at a fourth property. A January 2020 McKinsey study shows that while King County added 67,000 units of market rate rental housing over the last decade, the region lost more than 40 percent of housing considered affordable to households earning 80 percent of AMI or less.

The Housing Equity Fund has also earmarked an additional $125 million in cash grants to businesses, nonprofits, and minority-led organizations to help build more inclusive affordable housing solutions. Grants will also be provided to government partners such as transit agencies and school districts that are not typically involved in affordable housing issues.

The investments represent the latest example of capital flooding into the affordable housing asset class. Belveron Partners, an investment group focused on affordable housing and preservation, today announced the closing of a $280 million real estate investment fund focused on acquiring and preserving upwards of 5,000 affordable and workforce housing units across the Northeast and Mid-Atlantic regions and the Southwest. And earlier this week, the National Equity Fund, the Metropolitan Atlanta Rapid Transit Authority and Morgan Stanley announced a $100 million fund to provide financing to multi-family property owners to help low-income families and individuals stay in their homes as rents increase throughout the Atlanta metro area.