Amazon is expanding its commitment to housing with an additional $1.4 billion investment to create and preserve affordable housing in and around Seattle, as well as near its two other business centers, the company announced Tuesday.
The funding builds on Amazon’s Housing Equity Fund, a $2 billion initiative launched by Amazon in 2021 with the goal of supporting 20,000 affordable housing units over the next five years. The fund is aimed at three cities where Amazon has a high concentration of corporate employees: the Puget Sound region; Arlington, Virginia and Nashville, Tennessee.
On Tuesday, Amazon said it had already exceeded its target for the fund. Three and a half years after its launch, Amazon has invested $2.2 billion in loans and grants in 21,000 affordable housing units.
Amazon expects the additional $1.4 billion to finance 14,000 more homes.
In the Puget Sound region, Amazon’s headquarters, the company and other tech giants have worked to help fund affordable housing projects, while facing criticism that their high salaries have contributed to a surge in the cost of living.
Amazon CEO Andy Jassy said in a news conference Tuesday that “we know that housing is a really big challenge for a lot of people, especially in and around high-cost metropolitan areas. We believe we can help give back to our communities by helping to preserve and create thousands of affordable homes.
Alice Shobe, global director of Amazon Community Impact, said the new funding is a way to “build on success.”
“We’re excited about how we’ve been able to innovate,” she said in an interview before the news. “We feel an urgency around this issue.”
Shobe said there were still many unknowns about how the new funds would be spent. That gives Amazon room to put money where it sees opportunities, she said.
“We have a vision and a general direction for where we are going, but real estate changes,” she said. “We want to make sure we remain flexible and in communication with community partners to ensure we meet their needs.”
As with the first round of funding, the $1.4 billion investment will be a combination of loans and grants..
The funding is primarily intended for projects that will be affordable to those earning between 30 and 80 percent of the area median income, Shobe said. In King County, that would be between $28,800 and $70,650 for an individual or between $41,100 and $100,900 for a family of four, according to 2023 data from the King County Housing Authority.
The first round of funding was primarily aimed at the same income bracket, Shobe said, although Amazon also contributed to some projects aimed at renters with area median incomes below 30%, as well as a homeownership pilot project.
Through a partnership with the National Housing Trust, Amazon said in a report released Tuesday that it would provide $40 million to support homeownership. A pilot project in Seattle will involve 83 homes, and Amazon hopes to expand it to serve 800 homeowners.
Of the 21,000 affordable housing units Amazon has helped finance, more than 8,600 are in the Puget Sound region, including 3,600 in Seattle and 1,400 in Bellevue. In Puget Sound, 62% of this housing is for households earning less than 60% of the area median income.
Another 9,400 units are near Washington, D.C., and another 3,000 are in Nashville.
The company did not yet know how the new round of funding would be distributed among its three business units.
In Seattle, Bellevue and surrounding areas, Amazon has been criticized for contributing to rising housing costs with high wages for company workers and pressure against new corporate taxes.
There is also a huge need for affordable housing in the area. More than a third of the 309,000 new housing units needed in King County over the next 20 years must be affordable to people earning 30 percent of the area median income or less, according to recently approved estimates from the Metropolitan County Council by King.
Seattle’s Office of Housing said in February it would provide far less money than usual for new affordable housing this year as it faces years of heavy spending following the COVID-19 pandemic and increased construction and operating costs. This year, it will finance four new affordable housing projects at a cost of $53.3 million. In comparison, the amount of annual spending has not fallen below $100 million since 2018.
At Tuesday’s news conference, Jassy said affordable housing is especially important in “communities like ours, where rents have outpaced wages and made it harder for people like teachers, nurses and first responders to live close to their work and be part of the communities they support. .”
About 95% of projects supported by Amazon’s Housing Equity Fund will remain affordable for 99 years, Amazon said.
Amazon expects it to be one of many backers for each affordable housing project. Shobe said most projects have three to 12 funding sources. In its first investment round, 80% of the projects Amazon contributed to also had federal, state or local government funding, she said.
Seattle Mayor Bruce Harrell said Tuesday he will “brag” about the relationship between Seattle city government and Amazon, especially as he prepares to attend the U.S. Conference of Mayors. United.
“These kinds of projects just don’t happen organically,” Harrell said. “This happens because people with resources and the means to think of others” want to get involved.
Amazon focused most of its initial $2.2 billion investment on shovel-ready projects, Shobe said. This is part of what allowed them to move forward so quickly.
The company also began its efforts by focusing on preserving existing units: more than half of the units it helped finance came from projects aimed at preserving existing housing stock. Shobe said they have focused on “natural affordable housing” or buildings that owners are looking to sell, making the property a prime target for developers looking to flip and raise rents.
“We felt the urgency to plug the pipes,” Shobe said. “It was really about creativity around deal after deal, working with developers to say ‘What will make this happen?’ What piece is missing from your puzzle? »
Of the units already created, Amazon said 94% are within walking distance of public transportation, such as bus or light rail stations.
The company estimates that about 46,000 people live in the 21,000 affordable homes it has funded so far.
Inside the Pacific Tower building on Beacon Hill, Amazon’s former headquarters in Seattle, on Tuesday, those who attended the press conference overlooked one of the affordable housing projects supported by Amazon.
Beacon Pacific Village, expected to open this summer, will offer 160 affordable housing units, according to the Seattle Chinatown International District Preservation and Development Authority, which helped develop the project.
Jared Johnson, co-executive director of the organization, said the group was really excited to learn that Amazon would be expanding its Housing Equity Fund because “we know how critical the need is.”
“It’s not just buildings,” Johnson said. “These are houses.”