Amazon adds €1.4 billion to its affordable housing fund in US

Amazon is adding $1.4 billion to its affordable housing fund to build or maintain an additional 14,000 homes for people on low incomes in what the e-commerce giant calls its “hometown communities” in the states of Washington, Virginia and Tennessee in the US.

One of Amazon’s affordable apartment blocks in Seattle

The injection of new funds, announced by CEO Andy Jassy, brings to $3.6 billion the total invested by the company in affordable housing to create or support 35,000 units.

Amazon’s Housing Equity Fund, launched in 2021, aimed to finance 20,000 units over five years in the three areas – the Puget Sound in Washington state; Arlington, Virginia, and Nashville, Tennessee. The extra funds will be allocated to the same areas.

“We are pleased to announce that we have exceeded our original goal two years early and have provided $2.2 billion to create and preserve over 21,000 affordable homes,” said Jassy. “The extension of the Housing Equity fund underscores our commitment to affordable housing and to helping thousands of families live closer to where they work or near transportation hubs, removing a major barrier to success.”

The fund was initiated in response to criticism, not directed just at Amazon but at other tech firms, that the influx of highly-paid tech employees had led to a spike in housing prices in the areas there their employers’ offices were located.

Cities like Seattle and San Francisco have seen longtime residents being displaced and having to move out of town as rents and prices became unaffordable due to demand from tech employees.

An Amazon-funded block of flats in Washington

Amazon said it wants to cater to the “missing middle”, professionals like teachers or nurses who do not qualify for government subsidies but often struggle to afford the rent. The group’s housing solutions are targeted at people on low-to-moderate incomes, defined as those earning between 30% and 80% of the area’s median income.

Great attention has been paid to residents’ quality of life, Amazon said: 92% of the homes are near bus or train stations to reduce transportation costs, while 41% of the housing units have two or more bedrooms so that families can move in.

“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,” said Jassy. “We hope that our additional commitment, coupled with other public and private resources, will help make a meaningful difference for thousands more people and enable these regions to thrive.”

Until now, a majority of the financing has been provided to both non-profit and for-profit developers in the shape of loans, enabling Amazon to generate revenue from interest payments.