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Amazon will spend millions to help low- and middle-income families buy their first homes in the D.C. region, the company announced Wednesday, extending its multibillion-dollar affordable housing effort to a development strategy that has traditionally seen little public or corporate investment.
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The undertaking is part of a $40 million initiative that executives said is meant to help boost homeownership among “underserved groups” in the D.C., Seattle and Nashville areas. The tech giant maintains large footprints in these three increasingly expensive regions, and activists and government officials have worried an influx of well-paid tech employees will make a housing shortage even worse — to the point that it could push out longtime residents.
(Amazon founder Jeff Bezos owns The Washington Post, and the newspaper’s interim CEO, Patty Stonesifer, sits on Amazon’s board.)
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Working with the nonprofit National Housing Trust (NHT), the company said it will give housing developers or local organizations grants to come up with strategies on how to create “affordable homeownership” opportunities. Then, the housing trust and Amazon will offer those organizations loans to build or preserve housing units set aside for low- and middle-income families.
“What this is doing — and what really doesn’t exist — is providing upfront resources to develop permanent affordable homeownership,” said Priya Jayachandran, the housing trust’s CEO. “We do really see that gap.”
Jayachandran added that there have historically been few government subsidies to help people buy homes compared with those for rental housing. But in a system where most people’s equity is built up through real estate, boosting homeownership is one tool to help bridge wealth disparities. That is especially true in metro areas like D.C., where sky-high costs create high barriers to entry.
The homeownership effort is the latest slice of the company’s $2 billion Housing Equity Fund, which has largely been providing loans to build or preserve apartments for low- and middle-income renters.
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The company rolled out the fund amid criticism that its Seattle headquarters had prompted housing prices and rents there to skyrocket and fears that a second campus, in Arlington, might do the same in Northern Virginia.
(Amazon stands to receive up to $750 million in taxpayer subsidies from local and state officials for the Virginia project, dubbed “HQ2.” A check for nearly $153 million is due from the state in fall 2026 if the company maintains current hiring levels at its new offices.)
Senthil Sankaran, the fund’s managing principal, said in a statement that “this new initiative will allow us to explore ways to help more moderate-income households realize their dreams of homeownership and, in turn, help build wealth that can pass on to the next generation.”
The first pool of money in the homeownership effort will take the form of grants to support affordable housing developers and community organizations looking to help grow their affordable homeownership programs. A total of $16.5 million will be divided evenly between each of the three metro areas involved in the program.
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In the D.C. region, recipients will include the Douglass Community Land Trust, an organization based in the city’s Anacostia neighborhood that has sought to protect against gentrification in that area.
Some of the funding will support the group’s “Pay It Forward” program, in which the trust buys homes below their market price and then resells the homes to low- or middle-income households.
When those households eventually resell, they must do so at another below-market price — specifically, one that would make the house attainable for a family at the same income level as the owners when they first bought the property.
Could a community land trust help solve D.C.’s gentrification crisis?
Because there are only a few very small organizations like the Douglass Community Land Trust working in affordable homeownership, a necessary first step is helping them scale up. “It’s a two-punch solution,” she said. “In order to do more affordable homeownership development, you’re going to have to build on-the-ground capacity.”
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The other pool of Amazon money, $20 million, will be distributed through an existing National Housing Trust fund to help these local organizations build new houses and apartments for families to buy or to convert existing ones into these opportunities.
The remaining $3.75 million in the fund will go toward helping the loan recipients provide down payment assistance to the families purchasing those homes and toward loans that can help those builders get new projects off the ground.
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Altogether, the $40 million Amazon effort is projected to result in 800 units across all three metro areas. Because no loans have been meted out in or around D.C. yet, it is unclear how many of those units will eventually be in the region surrounding HQ2.
Jayachandran said the money may end up funding a variety of strategies, including the “Pay it Forward” model, deeds that restrict sale prices and community land trusts. Such trusts purchase land and lease it to a developer or individual, who owns the actual building for a lower price.
These models have drawn buzz in cities with high home prices. Unlike conventional affordable housing projects, which often revert to market rates after a set period elapses, they generally do not lose their affordability. But there are few federal or state programs to subsidize the construction of these units and few banks willing to fund them with loans.
While the new initiative would help address that shortfall of money, Jayachandran cautioned that it may not necessarily address some criticisms of the overall Housing Equity Fund.
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About $1.7 billion of the fund has been doled out since its launch in January 2021. Upon the fund’s debut, Amazon said it would look to help renter households making between 30 and 80 percent of the area median income (AMI) — or $45,210 to $120,560 for a family of four in the D.C. area. Critics have pointed out the vast majority of units are for households on the upper end of that income spectrum.
Amazon’s $2B housing push is mostly leaving out D.C. area’s poorest
Jayachandran said that the families that benefit from the homeownership program will probably fall between 60 and 120 percent of the AMI — which in the D.C. area translates to a range between $90,420 and $180,840 for a family of four. As a lender, the National Housing Trust generally funds projects that target families making 80 percent AMI.
Christina Rosales, the housing and land justice director at the advocacy group PowerSwitch Action, said there was promise in helping local affordable housing organizations grow in size. But she stressed that metro areas like D.C.’s are most lacking in housing that is most affordable to its poorest residents.
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“It’s important to look at the need, and the need has been affordable housing for extremely low-income households,” she said.
She also warned against relying on private funds from a company like Amazon without including broad input from community members. In Seattle, where Rosales lives, city lawmakers levied a worker roll tax on the company that finances some affordable housing projects directly — without relying on any corporate goodwill.
Jayachandran acknowledged that even tens of millions of dollars may not result in the construction of many units. Because developers ultimately have to underwrite the homeowner, an apartment meant for someone to own can be a lot more expensive than building a rental.
But that doesn’t mean it’s not worth trying. “Is this is going to be the answer? No,” she said. “But if you want to close the racial wealth gap, you’re going to have to have creative solutions.”
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