Amazon launches $2 billion Housing Equity Fund to preserve and create over 20,000 affordable homes
[Jan. 19, 2021: Joseph Shavit]
Amazon’s new Housing Equity Fund is a more than $2 billion commitment to preserve existing housing and 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 will support Amazon's commitment to affordable housing and will help ensure moderate- to low-income families can afford housing in communities with easy access to neighborhood services, amenities, and jobs.
"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."
The 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, Virginia, 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. Amazon’s Housing Equity Fund also 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 supporting households making between 30% and 80% of the area’s median income—that’s less than $79,600 per year for a family of four in the Washington, DC, metro area. 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 US, 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 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 and support the stability and economic mobility of moderate- and low-income families."
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Here are details about the first housing agencies to receive support from Amazon’s Housing Equity Fund.
Washington Housing Conservancy
Who: The Washington Housing Conservancy (WHC) is a nonprofit organization that strives to preserve homes so they are affordable for moderate- to low-income residents in the National Capital Region. WHC is on the front lines in the communities where they invest, working to combat displacement and help build connected communities through partnerships and investments in neighborhood services and amenities.
What: Amazon’s commitment includes $339.9 million below-market loans and grants worth $42 million to WHC.
Where: With Amazon’s flexible capital, WHC was able to execute the purchase of Crystal House in Arlington, Virginia—near Amazon’s new headquarters—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.
Why: 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%.
“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.”
How: 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.
“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.”
King County Housing Authority
Who: The King County Housing Authority (KCHA) in Washington state provides rental housing and assistance to more than 55,000 people. KCHA was the nation’s first housing authority to access the municipal bond market for preservation and conversion of market-rate apartments as affordable housing, beginning with an acquisition in 1991.
What: As part of Amazon’s growing partnership with the 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.
Where: 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 (earning less than 30% of the area’s median income) at the Illahee Apartments.
"I am 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 partnership like this will ensure fast, strategic action, as well as positive, long-term change as we tackle this affordability crisis together as a region."
Why: 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 the area’s median income.
How: The KCHA’s portfolio currently includes over 7,000 units of housing 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 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 of 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."
Read more about Amazon’s Housing Equity Fund.