New Housing Equity Fund will preserve and create equitable housing through below-market loans and grants to housing partners, public agencies, and minority-led organizations
First investment of more than $567 million will make up to 1,300 affordable apartment homes available near Amazon’s new Arlington, Virginia headquarters and up to 1,000 apartment homes available near Amazon’s Puget Sound, Washington headquarters, with more investments to come
SEATTLE–(BUSINESS WIRE)–Jan. 6, 2021– Amazon (NASDAQ: AMZN) today announced the 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, Virginia; and Nashville, Tennessee—three communities where the company has or expects to have at least 5,000 employees each in the coming years. Amazon’s Housing Equity Fund will help preserve existing housing and help create inclusive housing developments through below-market loans and grants to housing partners, traditional and non-traditional public agencies, and minority-led organizations. The Fund underscores Amazon’s commitment to affordable housing and will help 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 $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:
$2 Billion in Below-Market Capital
Amazon is providing below-market capital—in the form of loans, lines of credit, and grants—to preserve and create 20,000 homes affordable for moderate- to low-income families in the Puget Sound region, Arlington, and Nashville. In each of these areas, Amazon is targeting households making between 30% to 80% of the area’s median income (AMI). In the Washington, D.C. metro area, this translates to a household of four earning less than $79,600 a year. In the Seattle–Tacoma–Bellevue metro area, this translates to a household of four earning less than $95,250 a year.
$125 Million in Grants to Minority-Led Organizations and Public Agencies
Amazon’s Housing Equity Fund will provide an additional $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, which disproportionately affects communities of color. The Fund will also give grants to government partners not traditionally involved in affordable housing issues, such as transit agencies and school districts, to provide them with resources to advance and create equitable and 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.”
Amazon’s first Housing Equity Fund commitments include:
Washington Housing Conservancy’s Crystal House in Arlington, Virginia
Amazon’s first Housing Equity Fund commitment in Virginia includes a $339.9 million below-market loan and grants worth $42 million to the Washington Housing Conservancy (WHC)—a nonprofit organization that preserves homes so they are affordable for moderate- to low-income residents. A typical affordable housing acquisition would be financed with a combination of loans and private investment, with interest rates as high as 15% for certain portions of the financing. Access to Amazon’s lower-cost long-term financing will allow WHC to maintain affordability well into the future in the National Landing neighborhood of Arlington. Amazon’s grants also include $2 million to fund WHC’s social impact work.
According to the Arlington County government, Arlington County has lost approximately 14,400 privately owned affordably priced housing units since 2000. Between 2010 and 2018, the median home value climbed approximately 20% (after adjusting for inflation) and median rents climbed 11%, while median household incomes climbed only 7%.
With Amazon’s flexible capital, WHC was able to execute the purchase of Crystal House in under two months, an expedited timeline for commercial real estate transactions. WHC’s finance partner, the Washington Housing Initiative and Impact Pool, created by developer JBG SMITH, provided commercial real estate expertise and an additional loan of $6.7 million. Crystal House will offer a dynamic rental structure. Through natural renter turnover, rents will be significantly lowered to appeal to households earning less than 80% of AMI. The conversion of existing apartments to more affordable apartments began on Jan. 1, 2021 and will continue over the next five years. A 99-year covenant ensures that Crystal House will remain affordable for the long term. JBG SMITH will manage the property on behalf of WHC.
“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.”
“Amazon’s investment in affordable housing in Arlington is transformational—and couldn’t come at a better time,” said Matt de Ferranti, Arlington County Board Chair. “We are delighted to further strengthen our partnership with Amazon and to work together to serve our shared commitment to equity and economic opportunity for all of our residents.”
King County Housing Authority Portfolio in Washington State
As part of Amazon’s ongoing and growing partnership with the King County Housing Authority (KCHA), Amazon’s first Housing Equity Fund commitment in Washington will fund an initial $161.5 million below-market loan and $24 million in grants to preserve affordability for 1,000 apartment homes. The funds, to start, will allow KCHA to complete acquisition financing on 470 recently acquired units across three properties—Pinewood Village (108 units), Hampton Greens (326 units), and the Illahee Apartments (36 units)—preserving these critical resources as affordable housing by maintaining rent affordable to households earning at or below 80% of local median incomes. This commitment includes $4 million of the grant funds to support the preservation of housing for extremely low-income households (less than 30% of AMI) at the Illahee Apartments.
According to a January 2020 McKinsey study, King County added 67,000 units of mostly market rate rental housing over the past 10 years. However, during this same period, King County lost more than 112,000 units (or over 40%) of its housing affordable to households earning 80% of AMI or less. KCHA was the nation’s first housing authority to access the municipal bond market for preservation and conversion of market-rate apartments to affordable housing, beginning with an acquisition in 1991. The Housing Authority’s portfolio currently includes over 7,000 housing units affordable to moderate- and low-income workers. With support from Amazon’s Housing Equity Fund, KCHA will continue to build its portfolio and increase affordability over time by minimizing rent increases. These buildings will remain affordable long term—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.”
“I’m thrilled Amazon and King County Housing Authority are working together to make our growing Bellevue community more inclusive, equitable, and opportunity-rich for families of all income levels,” said Bellevue City Manager Brad Miyake. “Corporate-nonprofit partnerships like this will ensure fast, strategic action, as well as positive, long-term change as we tackle this affordability crisis together as a region.”
Since announcing its selection of Arlington as the site of its second headquarters, Amazon has donated more than $19 million to community organizations across the Washington, D.C. metro area. Most recently, Amazon gave $3 million across four legal service agencies to support families and individuals facing eviction issues due to challenges stemming from the ongoing pandemic. In Seattle, Amazon has provided more than $100 million in cash and in-kind donations to Mary’s Place, a nonprofit focused on fighting family homelessness, and in March 2020, Mary’s Place opened the largest shelter in Washington State within a new Amazon office building. In December 2020, Amazon donated $2.25 million to The Housing Fund nonprofit in Nashville to help moderate- to low- income households preserve homeownership and build financial stability.
