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NEW YORK (AP) — Amazon is including $1.4 billion to a fund it established three years in the past for preserving or constructing extra affordable housing in areas the place the corporate has main company workplaces, CEO Andy Jassy introduced Tuesday.
The Seattle-based company stated the brand new sum would go on prime of the $2.2 billion it had already invested to assist create or protect 21,000 inexpensive housing items in three areas: the Puget Sound in Washington state; Arlington, Virginia; and Nashville, Tennessee. When it launched its Housing Equity Fund in January 2021, Amazon stated it aimed to fund 20,000 items over 5 years.
The extra cash will go to the identical areas with a aim of constructing or sustaining an extra 14,000 properties by grants and below-market-rate loans. Thus far, a lot of the funding went to non-profit and for-profit builders within the type of loans that enable Amazon to earn income by curiosity funds. Amazon stated 80% of the items additionally benefited from authorities funding.
Like different tech companies which have made related investments, Amazon launched its inexpensive housing fund following years of complaints that well-paid tech employees helped drive up housing prices in areas the place their employers had arrange major hubs.
Housing advocates in cities like Seattle and San Francisco have lengthy blamed an influx of corporate workers for driving up the demand for housing and pricing out long-time residents.
Alice Shobe, the worldwide director of Amazon Group Affect division, stated 59% of the items Amazon supported to this point have been preservation initiatives that make use of current housing. They embody donations and loans to nonprofits and native authorities companies that may buy buildings and stabilize rents, or in any other case preserve naturally occurring inexpensive housing.
Along with sustaining housing inventory, such initiatives forestall non-public builders from reworking condo buildings and placing the items in the marketplace at a lot greater costs, Shobe stated in an interview.
“We’ve made a giant distinction in each the quantity and high quality of inexpensive housing in these three communities,” she stated.
Amazon targets its investments to supply housing for people with low-to-moderate incomes, which the corporate defines as these incomes 30% to 80% of a given area’s “space median earnings.” The corporate has stated it needs to concentrate on what it calls the “lacking center,” a demographic that features professionals like nursing assistants and teachers who don’t qualify for presidency subsidies however nonetheless wrestle to pay lease.
In September, Amazon made a $40 million funding to drive house possession within the three areas. However the remainder of the cash to this point has gone towards condo buildings.
The corporate beforehand obtained some criticism in Northern Virginia for neglecting the housing wants of individuals on the decrease finish of the earnings spectrum. Initiatives designed for such people are more likely to require extra authorities subsidies and take longer to finish, stated Derek Hyra, a professor at American College and a founding director of the Metropolitan Coverage Heart.
Shobe stated Amazon has labored to take care of a “combined portfolio” with out shedding its concentrate on the lacking center. At the moment, the corporate says a lot of the items it has supported serve households incomes lower than 60% of the realm median earnings, which fits as much as $82,200 for a household of 4 in Washington state’s King County, the place Seattle is situated.
Corporations like Amazon can assist with the availability of inexpensive housing, however their cash alone received’t do a lot to maneuver the needle with out vital investments from the federal government, in line with Hyra.
“They’ve a great amount of cash, however not sufficient cash to unravel the issue,” he stated.
An inner Amazon memo that was leaked last year to the nonprofit labor group Warehouse Employee Useful resource Heart and posted on-line reveals the corporate sees its philanthropy as a instrument that may assist it burnish its status.
In keeping with an individual acquainted with the matter, the housing fund beforehand sat below Amazon’s authorities and company affairs division. Nonetheless, it was moved to the corporate’s public relations arm when Jay Carney, Amazon’s former public coverage and communications chief, left in 2022, the particular person stated.
