Amazon Expands its Housing Equity Fund: Creating Affordable Housing in Seattle, Nashville, and Arlington

Amazon is expanding its Housing Equity Fund with $1.4 billion, creating and preserving affordable housing units in Seattle, Nashville, and Arlington.

Amazon refilled its multibillion-dollar Housing Equity Fund with an infusion of money and projects this will preserve and create an additional 14,000 affordable housing units.

Online retail giant announced this week that it will commit an additional $1.4 billion to its Housing Equity Fund to create and preserve roughly 14,000 affordable housing units across three major metropolitan areas where it maintains a corporate presence.

The company will invest the funds in the metro areas of Seattle, Nashville and Arlington, Virginia. Amazon said in an announcement that this investment will bring the total fund to $3.6 billion and 35,000 housing units since its inception in 2021.

In Arlington, Virginia, the fund created and preserved more than 9,500 units and increased the city’s affordable housing stock by 23%. And in Puget Sound, Washington, the fund helped pay for more than 8,600 units and increased the housing stock by 30%. In Nashville, the fund created over 3,100 units.

“We created the Amazon Housing Equity Fund to preserve and create homes that will remain affordable for the next century, ensuring families can stay in their communities for generations to come,” Amazon CEO Andy Jassy said in a statement. “We hope our additional commitment, combined with other public and private resources will help make a meaningful difference for thousands more people and enable these regions to thrive.”

Amazon Expands its Housing Equity Fund

Amazon launched the $2B fund in January 2021 with the goal to preserve and create 20,000 housing units. The company expected to allocate the fund over five years, but it exceeded its original goal in less than four years. Amazon says it has created or preserved over 21,000 units of housing.

The fund focuses its efforts on units for families earning 30% to 80% of each area’s median income and typically works with nonprofit groups to buy existing apartment complexes and reserve them for low-income families. This approach costs less than building housing from scratch, Jenny Schuetz, a Brookings Institution senior fellow, told Bloomberg.

Amazon has not yet designated the additional funds, and it does not accept applications yet, the Washington Business Journal reported. The company will release more information about the fund later this summer.

Amazon reports that 92% of homes that Housing Equity Fund has financed sit near bus or rail stations to reduce transportation costs and that 41% of the homes have two or more bedrooms to serve families.

In August, The Fairfax County Redevelopment and Housing Authority acquired a site in Tysons, Virginia, where it plans to build two 20-story towers that will include 516 apartment units. The developer secured a $55M below-market-rate loan from Amazon’s Housing Equity Fund. This loan will help the developer build the project, known as Dominion Square, all at once rather than in phases.

Amazon believes “there’s really a need to balance both new construction and preservation,” Sankaran said. As opposed to building new rent-capped units, preservation involves buying existing properties — usually older, less amenitized apartments whose market rents people deem “naturally” affordable — and locking in those lower rents with affordability covenants. Preservation doesn’t necessarily cost less than building brand new affordable housing, since market-rate interests who want to renovate or redevelop naturally affordable properties may bid up acquisition prices. But preservation “helps from a time frame standpoint,” in that “you’re keeping families in homes” where they already live, Sankaran said.