Amazon is launching a new $40 million affordable housing initiative targeted at expanding homeownership for moderate-income families in three cities where it has major operations.
The pilot initiative, a partnership with the National Housing Trust, is targeted at households making less than 80 percent of the local median income, which for a family of four would be $80,000 in Nashville, $95,000 in Arlington and $100,900 in Seattle.
The program is part of a larger $2 billion Amazon pledge to create or preserve at least 20,000 affordable housing units near its hubs — after the company and other tech giants were accused driving up home prices with their legions of well-paid workers.
Details of the new initiative, which will be administered through local partner organizations in each of the three cities, are still in flux, but NHT says that it plans to test concepts including shared equity ownership to keep home prices low.
Thresholds representing 80% of area median income for a family of four are seen above
Shared equity ownership involves a one-time investment that subsidizes the cost of the home, and then imposes restrictions on the resale value to keep it affordable for the next family that purchases it.
In some cases, it takes the form of a community trust that owns and maintains the land the home sits on, with the residents owning the physical house itself.
Amazon says that removing the cost of the land from the total cost of the home allows the price of homes to stay affordable for middle-class homeowners.
‘Historically, those who are able to own homes are more likely to experience long-term economic stability, while those who can’t are more likely to struggle financially,’ said Senthil Sankaran, managing principal of the Amazon Housing Equity Fund.
‘This new initiative will allow us to explore ways to help more moderate-income residents realize their dreams of homeownership and, in turn, help build wealth that can pass on to the next generation,’ added Sankaran.
Amazon is headquartered in Seattle, which has long struggled with a shortage of affordable housing, and is building its second headquarters in Arlington, on the outskirts of Washington DC.
The company also runs its logistics operations from Nashville, where it has more than 2,500 corporate employees, and plans to hire up to 5,000.
Amazon employs more than 65,000 workers in the Seattle area and about 8,000 in Arlington, where it expects to grow its headcount to about 25,000 by 2030.
In June, Amazon opened phase one of HQ2, though it has indefinitely paused construction of the second phase of the project.
The two buildings comprising Amazon’s second headquarters, HQ2, are seen after a grand opening ceremony, in Arlington, Virginia in June
An outdoor area is seen at the new Amazon headquarters in Arlington, Virginia
Virginia Gov. Glenn Youngkin, center is seen with Amazon executives during a grand opening ceremony at Amazon’s second headquarters, HQ2, in Arlington on June 15
The new affordable housing initiative is not aimed at helping Amazon employees, but rather the teachers, first responders, and service industry workers who risk being priced out of homes as the retail giant’s corporate campuses grow.
Amazon attracts thousands of well-paid workers to each of the areas where it opens a corporate base. They usually drive-up house prices and begin to gentrify poorer areas, whose longtime residents find they are no longer able to live where they grew up.
In Nashville, residents who qualify for the program could buy a below-market house with a down payment of just 1 percent, according to The Tennessean.
Amazon is partnering with The Housing Fund to administer the program in Nashville, where families making up to 120 percent of median income might qualify — a threshold of about $120,000 for a family of four.
‘Incomes are not keeping up with housing values so people could lose their homes because of rising property taxes,’ The Housing Fund CEO Marshall Crawford told the newspaper, adding that the city has suffered a shortage of affordable housing.
‘Now, Amazon is giving us additional resources to acquire properties. It was a major win for them to build a headquarters in Nashville and it’s a major win for the residents for them to put money behind affordable housing.’
In Nashville, the median sales price for homes in $459,900, up 3.3 percent from a year ago and a 12.1 percent increase from December 2019, according to data from Redfin.
Arlington’s median home price of $687,500 represents a rapid rise, up 7.4 percent from a year ago and a 15.7 percent gain from December 2019.
In Seattle, the median home sales price remains sky-high at $810,000, although that is down 4.5 percent from a year ago and a 2 percent drop from December 2019.
NHT says that each local partner will have their own homebuyer selection processes with specific criteria based on income, though the goal of the program is for the majority of homes to go to families making 80 percent or less of the median local income.
Amazon is headquartered in Seattle, which has long struggled with a shortage of affordable housing, and is building its second headquarters in Arlington (file photo)
Amazon’s Seattle headquarters is seen above. Some Seattle residents have long blamed Amazon for rising home prices in the area, due to the company’s influx of highly paid workers
Local partners in the Seattle area include Habitat for Humanity Seattle-King & Kittitas Counties, which will provide flexible financing to support the construction of over 140 homes as well as a funding enabling 50 families to become homeowners in 2023.
The Habitat projects include cottages in South Park, condos in Capitol Hill and Columbia City and town homes in Burien, CEO Brett D’Antonio told the Seattle Times.
Habitat homes are available for households making 80 percent of county area median income or less, which in King County is 100,900 for a family of four.
Other Seattle-area partners are African Community Housing & Development and the Homestead Community Land Trust.
In the DC area, Amazon is partnering with Douglass Community Land Trust, which will use the funds to grow their development capacity for their home equity programs.
Some of the funds will support the group’s ‘Pay It Forward’ program, in which the trust buys homes then resells them below market price to low- or middle-income households, according to the Washington Post.
However, when those homeowners eventually resell, they must do also do so below-market price.
That program is open to first-time homebuyers who make less than 80 percent of area median income, which in the DC area would be $95,300 for a family of four.