not making six figures can pay to live anywhere near your new second home in Crystal City (Arlington, Virginia). “/>Amazon plans to spend $ 2 billion over the next five years to invest in affordable housing in the three cities where its main offices have helped to raise housing prices, the company said today.
The company will use loans, credit lines and grants to “preserve and create” 20,000 committed units at affordable prices for low to moderate income families in the general areas around Seattle, Nashville and Arlington, Virginia, where it has a large corporate presence, Amazon said in a press release this morning.
“Affordable housing” is generally defined as being available to families earning 80% or less of the area’s average income. Amazon specifically targets families between 30 and 80 percent of the AMI area. The AMI for the Washington, DC metropolitan area, including Arlington, is $ 126,000 and therefore, basically any family earning between $ 37,000 and $ 100,800 is within that range. In Seattle, the AMI is $ 119,400 and therefore that window would include families earning between approximately $ 35,800 and $ 95,500.
Amazon has already made two significant investments in affordable housing in these regions, the company added. The first is a $ 340 million combined loan and grant package that it granted to Washington Housing Conservancy to acquire an apartment complex, Crystal House, in Arlington.
“We have no control over how the [housing] markets respond to a large employer entering or expanding into the market, but we can play a role in how Amazon’s growth is impacting our local communities, “said Catherine Buell, head of community development for one of Amazon’s philanthropic arms, to The Wall Street Journal: “Particularly, as we expand our corporate presence, we are working to anticipate the problem as much as possible.”
Amazon’s pledge won support among supporters of affordable housing in Virginia. “We are thrilled that Amazon is really taking a quantum leap in its investments in affordable housing,” said Ars Nina Janopaul, president and CEO of Arlington Partnership for Affordable Housing. Amazon contributed $ 1 million to an APAH project in 2020, added Janopaul, “and we hope to help accelerate the development of affordable homes in Arlington with your support.”
Corporate support for low-income housing initiatives in the Amazon has also helped boost support at the state level, added Janopaul, which benefits everyone. “So I think it’s a great partnership, this corporate leadership, and it helps to motivate government leadership. They work in sync.”
The amazon effect
Amazon has been based in Seattle for more than 20 years, so its effect on the local housing market has been slow to build and not always easy to separate from other factors that affect the city. In Virginia, however, Amazon’s much-vaunted 2018 “HQ2” ad had a visible and immediate effect on already high housing costs.
Arlington has been an expensive place to live for decades, and a major boom in construction of “luxury” condos and apartments near subway stations in the past 10 to 15 years has only accelerated the growth trend. Amazon’s announcement that it would occupy an office space in an Arlington neighborhood – Crystal City, just steps from the Pentagon and Reagan National Airport – added further fuel to the fire.
In the six months after Amazon made the HQ2 announcement, house prices in Arlington County have increased by almost 18%. Speculators jumped first, a few days after the deal went public, but high-income people who just wanted to live near jobs on Amazon were not far behind. In August 2019, Redfin dubbed Arlington and neighboring Alexandria the most competitive real estate markets in the country.
The housing crisis in Arlington is not only dire for low-income families, it is also challenging for middle-class families. When the county published its annual profile in July, the average value of a detached single family home was $ 949,500 ($ 805,000 for a semi-detached house). Rents are also high: the average rent in Arlington in the 2020 report was $ 2,024 for a one-bedroom apartment, $ 2,627 for a two-bedroom and $ 3,367 for a three-bedroom.
There are currently around 8,300 compromised units at affordable prices in Arlington, so Amazon’s promise to create thousands more will indeed expand that number significantly. As in California, however, corporate philanthropy can only go so far without a review of local policy to fill the missing housing gaps.