Amazon is pledging $40 million in grants and loans for affordable homeownership projects in several regions of the country, including the Seattle area.
Wednesday’s announcement marks an expansion of the tech and e-commerce giant’s Housing Equity Fund, started in 2021, through which Amazon lends and donates money for affordable housing. So far, the fund has focused on affordable rental developments, and this is its first funding for homeownership projects.
“Those who are able to own homes are more likely to experience long-term economic stability, while those who can’t are more likely to struggle financially,” said Senthil Sankaran, managing principal of the equity fund, in a statement.
Homeownership is key to the nation’s racial wealth gap. In Washington, 68% of white people in Washington own their home, compared with 35% of Black people and 47% of Hispanic people, according to 2021 census data analyzed by the National Association of Realtors.
Amazon will provide the new round of funding to the nonprofit National Housing Trust, which will then provide loans and support to three nonprofits working on homeownership in the Seattle area, along with one in Washington D.C., and one in Nashville, Tenn. In Seattle, the funding will focus on planning and construction of new affordable homes for sale.
Habitat for Humanity Seattle-King & Kittitas Counties will receive a low-interest loan that will help pay for the construction of four Habitat projects, including cottages in South Park, condos in Capitol Hill and Columbia City and town homes in Burien, said CEO Brett D’Antonio. Habitat homes are available for households making 80% of county area median income or less, or just below $91,000 for a family of three in King County.
Three of those projects are already under construction, but securing financing has become more difficult as interest rates have climbed, D’Antonio said. “Having access to this low-interest Amazon funding is really huge.”
A grant will also fund down payment assistance for about 50 Habitat homebuyers in the next year and a half.
Amazon and the National Housing Trust declined to specify how much funding each nonprofit will receive, saying details were still being finalized.
Other Amazon funds will go to African Community Housing & Development, a SeaTac nonprofit that is working with Habitat for Humanity to develop three surplus Sound Transit properties along Martin Luther King Jr. Way South in Rainier Valley. Those sites are expected to include 65 total affordable condos and town homes for sale.
The funding will help African Community Housing & Development hire new staffers and upgrade internal systems needed to comply with government funding, the organization said. Eventually, the nonprofit hopes to develop its own homeownership projects.
“By creating homeownership opportunities for the community, we are opening doors to generational stability for families,” Executive Director Hamdi Abdulle said in a statement.
The third organization, Homestead Community Land Trust, will use a grant from Amazon to help pay for staff to partner with community organizations in areas where residents face a high risk of displacement, said CEO Kathleen Hosfeld.
Homestead is currently working with community groups in Skyway in hopes of securing a King County-owned site to build affordable homes for sale. Homestead aims to collaborate with community groups, giving residents more say in how developments in their neighborhood happen, Hosfeld said.
The land trust also recently received a $10 million unrestricted grant from philanthropist MacKenzie Scott.
Some Seattle residents blame Amazon for contributing to the region’s housing crisis, in part because competition for homes from highly paid tech workers can drive up housing costs. In 2018, Amazon also opposed a city “head tax” proposal meant to help address homelessness.
Alice Shobe, global director for Amazon in the Community, said many factors are behind a shortage of housing in the region, including restrictive zoning.
Since 2021, Amazon says, its Housing Equity Fund has committed $524 million to help preserve or build more than 5,300 units of affordable housing in the Puget Sound region, not including the latest homeownership funding. Affordable housing developments typically combine an array of funding sources, including government funds, to cover the full cost of building or purchasing homes.
The need for affordable rental and for-sale homes remains far more vast than philanthropy has addressed. King County needs nearly 17,000 new homes per year for the next two decades, with more than half of them affordable to people with low incomes, according to state projections. Homeownership advocates say developments with homes for sale should be a focus of public and private funders.
“We have an enormous amount of catching up to do,” Hosfeld said. “We need to mobilize resources at the scale of the need.”
