Amazon As a Leader in Affordable Housing?

Many places have seen the affordable housing crisis worsen, driving rent prices up and reducing the already limited number of housing choices for working- and middle-class families. To help remedy that situation, Amazon has embarked on a Housing Equity Fund. It has an affordable housing problem as a neighbor, so the online behemoth has taken some steps to become an okay neighbor. This Fund makes decisions to create and preserve affordable housing. More specifically, its authority and reach allow it to preserve the nationally significant affordable housing that already exists, while also pushing for dramatic increases in the supply of affordable units.

One of the genuine successes of Amazon’s approach is that the tech giant has not solely focused on creating new housing units. In fact, according to its Housing Equity Fund Impact Report, around 59% of Amazon’s funding so far has gone to maintaining existing units and remodeling others to make them appropriate for low-income renters. This is critical since a lot of the existing affordable housing in Seattle is on the verge of being turned into luxury apartments. 

Amazon has the right idea. However, what local organizations and independent researchers have to say about affordable housing is not all that positive. They mostly criticize it for being, well, not very affordable. According to the Urban Institute, “there is a huge gap between what these buildings cost to construct and maintain and the rents most people can pay.” So usually, affordable housing projects require government subsidies to be feasible.

This is where it becomes a little more contentious. Amazon has made a considerable effort to try to be part of the local housing scene. But its critics don’t see it as anything more than a damage control strategy to the years that Amazon opposed progressive taxation in Seattle that was designed to generate money specifically for affordable housing. Some point out that the fund provides a combination of low-interest, long-term below-market loans and useful gap-filling grants. However, this means that Amazon will be nearly made whole on its spending, earning back nearly all of it and at least tens of millions of dollars a year in interest while the lending and gap-filling aren’t solving the problem of affordability. And when affordable housing groups making use of these funds have to pay interest, too, that’s money that could otherwise go toward actually building low-cost housing.

America is in the midst of a housing affordability crisis, and it cannot be at all usefully solved by shoving a bit of funding into some housing projects, valuable as those are. Preventing the cost of homes to rise beyond what the average Amercan can afford is the real solution. This can, with some effort, be partly achieved by reinstalling across the country a sustainable supply of seriously affordable housing.

Until next time…