The Path to Affordable Housing: Amazon Housing Equity Fund
February 15, 2023
What is affordable housing? According to the Department of Housing and Urban Development (HUD), an affordable home is when costs are no more than 30% of a household’s income. Many groups have realized that housing costs are a significant burden on low-income families and have tried to develop affordable housing units across the nation. Amazon recognizes that many people have been squeezed out of the housing market due to rising prices and has committed $2 billion to their Amazon Housing Equity Fund to help with this issue. This fund was implemented to create or preserve at least 20,000 affordable housing units in three of their hometown locations, Arlington, Virginia/Washington D.C., Nashville, Tennessee, and Puget Sound Region, Washington.
The Amazon Equity Fund will assist over 18,000 people by providing low-rate loans, grants, and partnering with mission-driven organizations and local governments. Since this fund was created in 2021, Amazon has created or maintained 12,500 affordable homes and spent about $1.6 billion in loans and pre-development grant commitments. Amazon made the Accelerator Program to encourage minority groups to seek a career in housing development. They have invested about 50% of their funds to minority-led developers and minority-led local nonprofits, in efforts to tackle the lack of diversity and support developers of color in the real estate industry. Amazon committed about $21 million through its fund in December 2021 to help increase the number of professional real estate developers of color that strive to create affordable housing. Creating a convenient community is an important approach to their equity fund, and Amazon wants to develop or preserve affordable communities in areas where public transportation is easily accessible. To do this, they announced in 2021 that they would commit $300 million to partner with public transit agencies across the fund’s three geographic areas. The company understands the importance of having easy access to transportation and applied its Transit Oriented Development tactic (TOD) to support affordable housing in high-capacity public transit areas.
Impact in the DMV
Since the Housing Equity Fund began, Amazon has spent nearly $992 million in loans and grants to build or preserve 6,200 homes in Arlington, Virginia, and the District of Columbia. This funding has helped increase the stock of long-term multifamily units by 22% in these regions. About 14,400 privately owned affordable housing units have been lost in Arlington County since 2000. With the support of the Washington Housing Conservancy (WHC) and Arlington County, Amazon was able to preserve 1,953 units at the Crystal House apartments and Barcroft apartments.
Not far from the Amazon headquarters in Northern Virginia, the Barcroft apartments is the largest affordable housing complex in the region with 1,334 affordable homes. The company committed $160 million to preserve those affordable homes for 99 years. These affordable units were under intense pressure for redevelopment, and losing them would have displaced almost 3,000 people. The Crystal House apartment community was Amazon’s first housing initiative in Virginia, with 619 affordable housing units. To acquire Crystal House, the company spent $340 million in low-rate loans and $42 million in grants to the WHC. At least 550 new affordable homes will be built on undeveloped land as part of the Crystal House transaction.
Last year, Amazon committed $147 million to build and maintain 1,260 affordable homes throughout Washington, D.C., which will create 20,000 homes for low-to-moderate income households across the metropolitan area. Through this commitment, Amazon partnered with 12 project developers in D.C. who are keen on keeping rents affordable to households earning 30-80% of the area median income (AMI) for 99 years.
Amazon is one of the biggest companies in the world and one of the leaders that invests in community development. The Amazon Equity Fund is an excellent example of how giant corporations and businesses can leave a positive mark by assisting communities in tackling ongoing issues.
The Amazon Equity Fund has been overwhelmed with applications and temporarily paused accepting applicants until 2023. If your organization is in one of the three localities (D.C/Arlington, Nashville, or Puget Sound Region) trying to help create or preserve affordable housing, you can apply for grants or loans through the Amazon Housing Equity Fund here or by emailing HousingEquityFund@Amazon.com. The Fund is also willing to issue grants to government partners, such as school districts, that aren’t traditionally involved in affordable housing.
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