Amazon promises to invest $1.4 billion to build 14,000 affordable housing units
Amazon has pledged to invest $1.4 billion to build 14,000 affordable housing units to support housing needs in Seattle, Nashville, and the Washington metropolitan area. This is one of Amazon's efforts to help people afford housing. Amazon's housing equity fund aims to protect and create rental housing, then expand into homeownership. The e-commerce giant is focusing on providing apartments for middle-income families to help those who cannot afford the continuously rising housing costs. This move has received some criticism, with some arguing that Amazon should take more measures to meet the needs of the poorest residents
According to Zhitong Finance APP, Amazon (AMZN.US) has pledged to invest $1.4 billion in its housing equity fund to support affordable housing in Seattle, Nashville, and the Washington metropolitan area.
The company stated in a blog post on Tuesday that this funding will be used to build 14,000 units of affordable housing in these areas, bringing Amazon's total housing commitment to $3.6 billion.
It is understood that the company allocated approximately $2 billion in 2021 for low-interest loans and grants, joining its tech industry peers in efforts to help make housing more affordable, especially in expensive West Coast cities where their headquarters are located. Critics have long accused Amazon and other tech giants—including Google (GOOGL.US), Apple (AAPL.US), Meta Platforms (META.US), and Microsoft (MSFT.US)—of exacerbating housing shortages in the region by bringing in high-paid engineers who can outbid locals.
CEO Andy Jassy stated at a press conference, "We know that housing is a huge challenge for many people, especially in expensive metropolitan areas and their surrounding areas. We strongly believe that we can give back to our community by helping protect and build thousands of units of affordable housing."
Amazon's housing equity fund was initially aimed at preserving and creating rental housing in the Seattle area, Arlington, Virginia, and Nashville, before expanding to homeownership last year. The company has also used this funding to enhance its reputation in its hometown of Seattle through video ads and mailers sent to residents promoting the initiative.
The e-commerce giant has been focused on providing apartments for households with median incomes between 30% and 80% of the area's median income in each region, as a way to help those who do not qualify for existing subsidies and cannot afford rising housing costs. Critics of this approach argue that Amazon should take more measures to meet the needs of the poorest residents.
Jenny Schuetz, a senior fellow at the Brookings Institution who has studied the housing market for over 20 years, stated that Amazon has helped non-profit organizations purchase existing apartment buildings and keep them reserved for low-income families, which is more cost-effective than building housing from scratch.
She mentioned that in expensive markets, the cost of building an affordable housing unit could be as high as $1 million, so even large commitments could quickly be exhausted.
"This is a lot of money, and we need every penny we can get," said Sarah Saadian, Senior Vice President for Policy at the National Low Income Housing Coalition, regarding Amazon's latest commitment, "but the federal government cannot rely on corporate charity to solve this problem."