Primed for affordable housing

Virginia Housing CEO Susan Dewey says Amazon.com Inc.’s $2.5 billion-plus HQ2 East Coast headquarters under construction in Arlington created a “launching pad” for awareness of the link between adequate, affordable workforce housing and economic development.

Although Amazon expects to pay its 25,000 HQ2 employees generously, the e-tailer was concerned about the availability of affordable housing for its workers and other residents, says Jason El Koubi, Virginia Economic Development Partnership’s interim director. “Part of why Virginia was successful in its bid was that we were able to bring innovative solutions to the table to address these concerns.”

Virginia Housing pledged a total of
$75 million over five years from its Resources Enabling Affordable Community Housing (REACH) program to support state and local housing initiatives in the area around HQ2.

This was bolstered by Amazon’s own commitment to affordable housing, kicked off in 2021 with the announcement of its $2 billion Housing Equity Fund to preserve and create more than 20,000 affordable units in Arlington, Nashville and Washington State’s Puget Sound region, all regions where Amazon has a large workforce.

“As we were looking at HQ2, affordable housing was one of the No. 1 priorities, next to traffic,” says Catherine Buell, director of Amazon’s Housing Equity Fund. Amazon’s commitment in Arlington has helped the county to preserve and potentially expand some well-located affordable communities that were at risk of being redeveloped at a higher price point.

Last year, the Housing Equity Fund provided $382 million in low-interest loans and grants to the Washington Housing Conservancy to purchase Crystal House, an 828-unit apartment community near the HQ2 campus. Arlington Housing Director Anne Venezia says 75% of the units at Crystal House will be preserved as affordable housing for workers making 50% to 80% of median family income for the area. Additionally, Amazon has donated $40 million in adjacent vacant land to Arlington County for the construction of up to 550 affordable housing units.

“At the end of the day between preservation and infill development, we will have over 1,200 affordable units plus some market units in a very high-cost area of the county,” Venezia says. “That was a really tremendous opportunity, and fabulous that Amazon stepped in.”

In another recent effort, which Buell calls “a picture-perfect example of why we created the Housing Equity Fund,” Amazon and Arlington County teamed up to provide more than $300 million in financing to help Washington, D.C.-based Jair Lynch Real Estate Partners purchase the 1,334-unit Barcroft Apartments complex.

The 60-acre community along Columbia Pike has housed moderate-income workers since it was built in 1939. But when it came up for sale last year, county leaders worried that its prime location would draw investors who would hike rents.

Jair Lynch has pledged to keep all of the units affordable for those making up to 60% of the area median income for 99 years. Arlington County and Amazon respectively provided $150 million and $160 million low-rate loans to make the deal happen.

The county’s partnerships with Amazon and Jair Lynch were key to enabling quick action to secure such an attractive piece of real estate when it came up for sale, Venezia says.

Last summer, Amazon’s Housing Equity Fund announced that it would provide $125 million in below-market loans to help developers working with the Washington Metropolitan Area Transit Authority — which runs the Metrorail and Metrobus systems — to build more than 1,000 affordable homes located near transit in the D.C. area. In March, Amazon announced it was assisting in the development of about 750 affordable apartments near the New Carrollton and College Park Metro stations in Maryland.

“As we go into 2022, we are looking for more of those strategic partners,” Buell says, adding that hospitals, educational institutions and other area employers could be future partners in addressing housing affordability.

https://virginiabusiness.com/article/hitting-a-brick-wall/