Amazon’s $2B housing push has mostly left out Washington, D.C., area’s poorest

WASHINGTON — Amazon sought to tamp down fears about displacing residents around its new northern Virginia headquarters with a pledge last year to create and preserve thousands of affordable housing units in the District of Columbia area’s notoriously tight market.

But more than 14 months and $750 million into that effort, the help is overwhelmingly flowing to renters with incomes on the high end of a range the company targeted, according to a Washington Post analysis of company data.

Amazon’s Housing Equity Fund is a voluntary endeavor, and many local officials have praised the tech giant for committing so much money to address a long-standing shortage of affordable housing. Others argue that Amazon can and should do more, in part because the company — which earned about $33.4 billion last year — stands to profit from interest on the loans it is volunteering. (Amazon founder Jeff Bezos owns the Post.)

For now, though, Amazon’s efforts will likely do little to move the needle for the region’s lowest-income residents, many of whom are already stretching their paychecks to make rent every month. Just 6% of the units secured so far under Amazon’s fund have been set aside for the poorest renters — hardly enough to address fears that they will have to move out as the company’s new office buildings go up.

Catherine Buell, the director of Amazon’s Housing Equity Fund, said the company’s $2 billion effort is designed to address a specific “market need”: increasing the housing supply for low- to moderate-income workers, who make 30% to 80% of the area median income — too much to qualify for most public benefits but not enough to afford skyrocketing housing prices.

“Even an Amazon cannot solve the entire affordable housing issue,” she said. “Amazon doesn’t own the affordable housing challenges, and governments are primarily responsible for managing the housing issues in their community. We’re here to be a partner.”

Yet, the company's effort has so far committed few resources toward the lower end of its intended range. Of more than 4,100 units secured so far, just 215 will be set aside for residents who make 50% or less of the area median income. (That translates to an annual salary of up to $45,150 for an adult living alone, or up to $64,500 for a family of four.)

It’s those apartments — for home health aides, school bus drivers or construction workers — that are most needed and are most rapidly disappearing in northern Virginia and beyond, the company’s critics say.

“Even though the Amazon investments are significant, the number of units we have lost and will continue to lose greatly outweighs the number Amazon contributes to preserving,” said Derek Hyra, an urban policy professor at American University and a Falls Church, Va., planning commissioner.

For Amazon’s dollars to be most effective, Hyra and others also say, the company must extend its targets even lower — to the lowest-income renters, including minimum-wage workers.

The lack of enough affordable housing in the Washington region has long predated Amazon's arrival. For at least two decades, the number of housing units in and around D.C. has not been able to keep up with the area's booming population.

A 2020 analysis of Arlington’s housing needs, prepared by George Mason University’s Stephen S. Fuller Institute, noted the stark shortage of units in the county for the lowest-income renters: For every five households making 50% or less of area median income, there were only about two units considered affordable to them. At higher income brackets, there was a surplus of units.

The same trend is true regionally: According to the Urban Institute, there were far more households in 2015 that needed or wanted to pay for housing units at the lowest income tiers than the supply of those actual units.

When Amazon announced its plans to create 25,000 new jobs in the county, the shortage was severe enough that state lawmakers committed $75 million of state funds for affordable housing in northern Virginia as part of the overall deal. Separately, the company separately gave $20 million to Arlington for its own housing funds, plus $40 million more in land to build more affordable units.

Advocates and residents nonetheless expressed deep fears that the corporate giant and its growing, highly paid workforce would displace the few low-income neighborhoods left nearby. Virginia’s deal with Amazon — as much as $750 million in direct subsidies to the company — rests on the condition that new hires in Arlington earn an average of $150,000 a year.

It was against that backdrop that Amazon announced its Housing Equity Fund in January 2021. The e-retailer poured $2 billion into its fund, promising to secure 20,000 units across the Seattle, Nashville, and Washington metros — all expensive urban areas where the company’s footprint is growing rapidly.

Buell said Amazon's fund was largely meant to tap into the company's access to low-interest loans and pass that along to developers, helping them build more affordable housing or buy privately owned affordable buildings and keep rents there low.

There is broad debate among affordable housing advocates and economists over whether it is beneficial to create housing at moderate income levels that might relieve pressure on the poorest residents, or build directly for the poor.

With so many units targeted to renters making 60% or 80% of the area median income, Amazon’s fund has taken the former route. Katie Cristol, chair of the Arlington County Board, said the results were “transformational.”

Amazon-funded deals in Arlington have increased the county’s supply of affordable housing by 22%, preserving hundreds of units that will stay affordable for 99 years — decades longer than the norm in a state where rent control does not exist.

The money has also helped secure deals that county lawmakers say may not have happened otherwise. When the Barcroft Apartments were put up for sale last fall, many feared that the massive complex would be snapped up by a for-profit developer that would end up creating luxury units and pushing out the current tenants, mostly working-class immigrants from Africa, Asia, and Latin America.

Instead, it was acquired by Jair Lynch Realty Partners, which used loans from Amazon and Arlington County and will maintain rents affordable for those making 60% or less of the area median income.

“It took the financial muscle of Amazon to make it happen,” said Arlington County Board member Takis Karantonis, an urban planner and economist.

But where the fund has tried to ensure that rents stay low long term, or to ensure that a number of units are secured across the D.C. region, it has not ensured that those units are deeply affordable. That’s where Hyra and others say the need is greatest.

Amazon officials and county lawmakers say government assistance programs such as the federal Housing Choice voucher program (formerly known as Section 8) are meant to fill the gap. Those vouchers can subsidize units like those at Barcroft, which are targeted for 60% of the area median income, and make them affordable to renters who make less than that.

Still, demand for those efforts far outstrips funding, and they do not always cover everyone who needs the assistance. Federal vouchers go to only about 1 in 4 households that qualify on income, and a local equivalent in Arlington covers only seniors, people with disabilities and working families. Families with mixed immigration statuses do not qualify for full aid.

“It’s really about bricks and mortar, which is what you need to help people stay,” said Alice Hogan, a consultant with the Arlington-based Alliance for Housing Solutions. “If you don’t produce that supply, there’s nowhere for them to go live.”

Large tech companies began digging into their pockets to fund affordable housing about three years ago, following long-standing frustrations that they had helped create much of the shortage on the West Coast.

Amazon became the latest to jump in, and the first to do so on the East Coast. But Hyra, the American University professor, said Amazon must look outside the tech industry if it hopes to make the most transformative impacts. He said the company could look to partner with public housing agencies in the Washington region, or give out money that would fund more deeply affordable apartments.

Almost 95% of the money Amazon has given out in the region to date has taken the form of loans. If the company committed upfront grants that do not need to be paid back, developers could further lower rents and accommodate more lower-income renters, Hyra said.

Amazon spokeswoman Sarah Lee said the company does not disclose the terms of its loans, though Buell noted in an interview that most of the loans have interest rates that fall within 2% to 5% for about 20 to 30 years.