- Amazon committed $300 million from its newly launched Housing Equity Fund to create an estimated 3,000 affordable housing units near public transit in its three U.S. hubs: 1,200 in Washington's Puget Sound region; 1,000 in Arlington, Virginia; and 800 in Nashville, Tennessee.
- The affordable housing will be built on surplus land the transit agencies own in the Seattle and Washington, D.C., regions. The units will be built on private land near transit in Nashville, which has a less developed transit network. Amazon said it intends to focus on properties located within half a mile of transit stops and to prioritize investments in economically and racially diverse communities.
- The goal is to get the housing units built for low- to moderate-income families within the next five years, according to Catherine Buell, head of community development at Amazon.
Local leaders have frequently mentioned in recent years that the nation's affordable housing shortage has reached a crisis level. Amazon's initiative is a novel way to reduce the housing crises in the areas in which it has a large presence, according to some experts.
"It's not super common for large corporations to devote hundreds of millions of their philanthropic dollars to affordable housing investments," said Yonah Freemark, senior research associate at the Urban Institute. "The vast majority of affordable housing investments in the United States are funded through the Low-Income Housing Tax Credit; it's a government-provided funding source that goes through private corporations, but the corporations are not sourcing the money directly."
Another unique aspect of this plan is that transit agencies, not housing authorities, are leading the charge to create the affordable housing.
"One of the goals of the Housing Equity Fund was to partner with nontraditional public agencies who are doing affordable housing work, but clearly this is not their expertise. Transit agencies are some of those agencies we see doing a lot of the work on affordable housing," Buell said.
Housing and transportation are two of the leading U.S. household costs, especially for financially overburdened residents. Transit-oriented development (TOD) is gaining traction as a way to simultaneously ease multiple financial burdens that low- and middle-income residents often face.
"The connection between transit and housing affordability is real for many of the residents in the regions in which we operate, and we hope that this initial investment will start to curb some of that stress." Buell said. "The goal is that this will have a double impact on their bottom line."
The Washingon, D.C., and Seattle areas already have strong transit infrastructure and have incorporated TOD into their planning processes, Freemark said. "In some ways, Amazon is reinforcing what already is occurring in those regions," he said.
Sound Transit is the project partner in Washington's Puget Sound region. Thatcher Imboden, director of land use planning and development at Sound Transit, said the agency buys property to build transit infrastructure on, but it sometimes is left with surplus property. A Washington state statute requires Sound Transit to offer 80% of its surplus property that is suitable for housing to affordable housing development.
"It gives us the ability — which is pretty unique — to be able to contribute our land value toward creating affordable housing," he said.
This is not the first time Sound Transit has partnered with affordable housing funders to develop the agency's surplus properties. However, the funding partners are usually other public-sector entities, not private companies. Working through a public-private partnership (P3) like Amazon's initiative could expedite the process of delivering affordable housing because there is less bureaucratic red tape and accountability for operating in taxpayers' interest than when two public agencies collaborate, Imboden said. In a P3, a lot of work goes into determining alignment on mission, roles and responsibilities.
Most of Amazon's funding will be in the form of below-market loans. "Our partnership allows us to have another tool in our tool chest... $100 million of low-cost, flexible loans is extremely valuable for creating affordable housing," Imboden said.
Land in the Seattle area has become quite expensive, Imboden noted, which makes it more difficult to create affordable housing. Sound Transit's public property contributions offer meaningful opportunities for housing development in addition to ample, reasonably priced access to jobs, education and services via the nearby transit, he added.
"While Sound Transit's properties alone are not going to solve the affordable housing crisis that exists in this area, we are creating much-needed affordable housing at amenity-rich locations in areas that are at risk of displacement, as well as areas that previously experienced displacement," Imboden said. "You can't let the big [housing crisis] numbers scare you from getting meaningful work done... This is a holistic approach to try to figure out how to create as much affordable housing as can be done."
Studies across the country also indicate that lower-income residents, the key demographic for the Amazon-funded initiative, tend to ride buses more than subways or trains. This phenomenon is said to occur for numerous reasons, including that bus fares can be the cheapest form of transit, bus networks generally are more extensive and far-reaching than train lines and train lines can drive economic development that raises housing prices and pushes low-income residents farther away. Those factors are true in the Washington, D.C., region, one of the three program hubs.
That information raises questions about whether positioning the affordable housing near train lines — subways, commuter rail and regional train lines — best meets the needs of the targeted demographic, considering many of the early planning discussions focus on train corridors. But Freemark explained that often low-income transit riders simply face accessibility issues.
"Low-income people are not necessarily choosing to take the bus over train services. In many cases, they're taking the bus because that's what's available in their communities," he said. "If you have situations where affordable housing is present in areas where train service is provided, then low-income people will take the train. In the case of Washington [D.C.] and Seattle, it makes perfect sense to leverage the existing rail transit systems."
Amazon is focused on ensuring the Housing Equity Fund is successful and accomplishes its goals before determining the next investments, Buell said.