Amazon is expanding its commitment to housing with an additional $1.4 billion investment to create and preserve affordable homes in and around Seattle, as well as near its two other corporate hubs, the company announced Tuesday.
The funding builds off Amazon’s Housing Equity Fund, a $2 billion initiative Amazon launched in 2021 with the goal of supporting 20,000 affordable housing units in the next five years. The fund is aimed at the three cities where Amazon has a large concentration of corporate employees: the Puget Sound region; Arlington, Va., and Nashville, Tenn.
On Tuesday, Amazon said it already exceeded its goal for the fund. Three and a half years after its launch, Amazon has invested $2.2 billion in loans and grants toward 21,000 affordable housing units.
Amazon expects the additional $1.4 billion will fund another 14,000 homes.
In the Puget Sound region, Amazon’s main headquarters, the company and other tech giants have worked to help fund affordable housing projects, while also facing criticism that their high corporate salaries have contributed to a skyrocketing cost of living.
Amazon CEO Andy Jassy said at a news conference Tuesday that “we know housing is a really big challenge for a lot of people, especially in and around expensive metro areas. We feel strongly we can help give back to our communities by helping preserve and create thousands of affordable homes.”
Alice Shobe, the global director for Amazon Community Impact, said the new funding is a way of “building on success.”
“We’re excited about the way we’ve been able to innovate,” she said in an interview before the news. “We feel urgency around this issue.”
Shobe said there’s still a lot of unknowns about how the new funding will be spent. That leaves room for Amazon to put the money where it sees opportunities, she said.
“We have a vision and broad direction of where we’re going, but real estate changes,” she said. “We want to make sure we’re staying flexible and in communication with community partners to make sure we’re responding to their needs.”
Like the first round of funding, the $1.4 billion investment will be a mix of loans and grants.
The funding is primarily for projects that will be affordable for those earning 30% to 80% of the area median income, Shobe said. In King County, that would be $28,800 to $70,650 for an individual or $41,100 to $100,900 for a family of four, according to 2023 data from the King County Housing Authority.
The first round of funding mostly went toward the same income bracket, Shobe said, though Amazon also contributed toward some projects for tenants at below 30% area median income as well as to a homeownership pilot.
Through a partnership with the National Housing Trust, Amazon said in a report released Tuesday, it is providing $40 million to support homeownership. A pilot project in Seattle will include 83 homes, and Amazon hopes to expand it to serve 800 homeowners.
Of the 21,000 affordable housing units Amazon has helped to fund, more than 8,600 are in the Puget Sound region, including 3,600 in Seattle and 1,400 in Bellevue. In the Puget Sound, 62% of those homes serve households earning less than 60% area median income.
Another 9,400 units are near Washington, D.C., with another 3,000 in Nashville.
The company didn’t know yet how the new round of funding would be split among its three corporate hubs.
In Seattle, Bellevue and the surrounding areas, Amazon has come under criticism for contributing to rising housing costs with its high salaries for corporate workers and pressure against new corporate taxes.
There’s also a tremendous need for affordable housing in the area. More than a third of the 309,000 new homes required across King County in the next 20 years need to be affordable to people making 30% of area median income or less, according to recently approved estimates from the Metropolitan King County Council.
Seattle’s Office of Housing said in February it will provide far less money than usual for new affordable homes this year as it deals with years of heavy spending following the COVID-19 pandemic and an increase in construction and operating costs. This year, it will fund four new affordable housing projects at a cost of $53.3 million. By comparison, the annual spending amount hasn’t dipped 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 salaries and made it harder for people like teachers and nurses and first responders to live close to their jobs and remain part of the communities they support.”
About 95% of the developments Amazon’s Housing Equity Fund supports will remain affordable for 99 years, Amazon said.
Amazon expects it will be one of many backers for each affordable housing project. Shobe said most projects have anywhere from three to 12 sources of funding. In its first round of investment, 80% of the projects Amazon contributed to also had federal, state or local government funding, she said.
Seattle Mayor Bruce Harrell said Tuesday he would “brag” about Seattle city government’s relationship with Amazon, particularly as he geared up to attend the U.S. Conference of Mayors.
“These kinds of projects just don’t happen organically,” Harrell said. “They happen because people with resources and the wherewithal to think about other people” want to get involved.
Amazon focused most of its original $2.2 billion investment on projects that were ready to get off the ground, Shobe said. That’s part of what enabled them to move so fast.
The company also started its efforts by focusing on preserving units that were already there — more than half of the units it helped fund came from projects to preserve existing housing stock. Shobe said they focused on “naturally occurring affordable housing,” or buildings that owners are looking to sell, leaving the property a prime target for developers to flip and raise rents.
“We felt urgency around plugging the drain,” Shobe said. “It was really the creativity around deal by deal, working with the developers to say ‘What will get this done? What piece is missing in your puzzle?’”
Of the units already created, Amazon said 94% are walking distance to public transit, like bus or light rail stations.
The company estimates roughly 46,000 people are living in the 21,000 affordable housing units it has put money behind so far.
On Tuesday, inside the Pacific Tower building in Beacon Hill, the site of Amazon’s former Seattle headquarters, those who attended the news conference overlooked one of the Amazon-supported affordable housing projects.
Beacon Pacific Village, set to open this summer, will offer 160 affordable homes, 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 Amazon would extend its Housing Equity Fund because “we know how critical the need is.”
“These aren’t just buildings,” Johnson said. “These are homes.”
