Amazon adding $1.4B to its affordable housing fund in Seattle and other regions
Amazon CEO Andy Jassy, left, speaking with Seattle Mayor Bruce Harrell at an event at the Pacific Medical Tower in Seattle at which he announced $1.4 Amazon is adding $1.4 billion to its Housing Equity Fund to preserve and create an additional 14,000 housing units in regions including Seattle, Nashville, Tenn., and Arlington, Va. The company's CEO, Andy Jassy, emphasized the importance of affordable housing in communities where rents have exceeded salaries. This commitment brings Amazon's support for affordable housing to more than $3.6 billion, which is being used to fund more than 35,000 units in its “hometown communities” as it describes them. The three Amazon hubs have struggled to meet housing needs for lower-income residents due to high-paying tech jobs. The fund has supported an increase in affordable housing inventory through below-market loans and grants to public agencies, housing partners, and minority-led organizations.
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Amazon is adding $1.4 billion to its Housing Equity Fund and has pledged to preserve and create an additional 14,000 housing units in the regions that include Seattle, Nashville, Tenn., and Arlington, Va.
CEO Andy Jassy announced the news at an event held today at Seattle’s Pacific Medical Tower, an early headquarters for Amazon.
“We’re here to talk about the importance of affordable housing, especially in communities like ours, where rents have outpaced salaries and may have 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,” Jassy said.
The new commitment brings the company’s support for affordable housing to more than $3.6 billion, which is being used to fund more than 35,000 housing units in the company’s “hometown communities,” as it describes them.
The three Amazon hubs have all struggled to meet housing needs for lower-income residents as high-paying tech jobs have exacerbated each region’s economic divide.
Amazon launched its Housing Equity Fund with a $2 billion pledge in January 2021. The fund has supported an increase in the affordable housing inventory through below-market loans and grants to public agencies, housing partners and minority-led organizations. The effort’s initiatives include a partnership launched with the National Housing Trust to aid moderate-income individuals and families in purchasing homes.
Amazon leaders shared today that they’ve beat by two years their original funding and housing goals, contributing $2.2 billion to the effort and providing more than 21,000 affordable homes.
Jassy explained that their efforts are targeting households that earn 30% to 80% of area median income, residents “who often don’t typically qualify for subsidies but whose pay hasn’t kept pace with escalating rates.”
Ben Maritz is the CEO of Great Expectations, an affordable housing development company in Seattle. Maritz, whose company has benefited from Amazon’s Housing Equity Fund, said the company’s efforts have been a huge help to the sector.
Lower-income housing projects have been hard hit by the high interest rates, creating gaps in the amount of funding developers need and the cash they can access. The Amazon fund is providing “essential” support, Martiz said, loaning money at reduced rates that allow projects to go forward.
“It’s keeping the whole industry going,” he added. “They’re great. They’re easy to work with.”
Amazon reported that it has funded more than 8,600 units in the Seattle area, and increased the affordable housing stock by 30% in Bellevue, Wash. where it has been building out its office space.
Maritz said that Microsoft is also playing an important role in the sector by helping developers buy tax-exempt bonds that cut building costs for affordable housing and by aiding with financing for land acquisitions.
Shoko Toyama, vice president and chief development officer at the nonprofit Plymouth Housing, likewise praised the two corporations.
“We appreciate the support tech companies, including Amazon and Microsoft, have made to being leaders in this space in our region,” Toyama said by email, “both through their direct investments and through their vocal support of affordable housing, including throughout the Puget Sound region.”
Both companies contributed to a Plymouth Housing campaign that created 600 permanent homes for people experiencing homelessness, Toyama said, and they’ve donated to the organization’s operational programs as well.
Business, civic and community leaders have clashed for years over the right strategies for addressing the Seattle region’s housing crisis and the obligations of success tech companies in remedying the problem.
In 2019, Microsoft announced $500 million of support for affordable housing efforts in the Seattle area, sparking a movement among tech giants. Amazon, Apple, Google and Facebook, which later rebranded as Meta, soon followed suit, making pledges of roughly $1 billion or more to fund housing development in their communities. Microsoft itself added another $250 million to the cause a year after its initial commitment.
With others in its cohort, Amazon stacks up as one of the world’s tech behemoths, valued at nearly $2 trillion. The company reported revenue of $574.8 billion last year, up 12%, and profits of $30.4 billion.
Many in the region have argued in the past that the company wasn’t doing enough to offset the impacts caused by its growing ranks of high-paid workers.
The Seattle City Council in 2018 passed — and then quickly repealed — a controversial “head tax” targeting Amazon and other high-revenue businesses.
The council ultimately approved JumpStart Seattle, a payroll tax that currently applies to companies with yearly payroll expenses of $8.1 million or more. The tax applies to hundreds of entities, but roughly 80% of the proceeds come from fewer than a dozen of businesses, mostly in the tech sector — including Amazon.
Last fall, Amazon was among the supporters of the Seattle Housing Levy, donating $25,000 to the yes campaign. And Seattle voters approved the $970 million, seven-year measure that supports the construction of affordable family-size apartments and for-sale homes, helps fund housing nonprofits, and backs other community efforts around housing stability.
Both the payroll tax and the housing levy are major drivers for City of Seattle programs that provide low-income housing.
The efforts by Amazon and other companies, as well as government agencies and private nonprofit and for-profit developers have added to the housing inventory, but the crisis isn’t over. Seattle alone needs more than 70,000 new low-income housing units over the coming two decades, according to city estimates.
“We’re way behind in large part due to interest rates,” said Maritz. “The pipeline for housing has fallen off a cliff.”
While the housing strain continues in the Pacific Northwest and across the nation, the breakneck growth of the tech sector has slowed significantly.
Amazon, Microsoft and other area tech companies have implemented multiple rounds of layoffs in recent years. Last year Amazon announced layoffs totaling 27,000 corporate workers, with roughly 2,500 of those impacted coming from the Seattle area. Its most recent cuts included hundreds of tech jobs lost in April.
But both companies have benefited from a broader tech rebound driven by a surge of interest in artificial intelligence. Amazon’s stock is up nearly 50% over the past 12 months; Microsoft shares are up 30%.
Maritz would love for the big tech companies and others to leverage some of their AI expertise to help cut costs and gain efficiencies in developing new housing. That includes automating some of the more tedious steps in drafting architectural plans and developing strategies for modular, lower-waste construction.
Ours, he said, “is a low-tech industry.”
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