(Bloomberg) -- Amazon.com Inc. is making its first foray into support for home ownership, putting up $40 million through nonprofit partners to create affordable housing.
Most Read from Bloomberg
The move comes after the e-commerce giant has provided some $1.7 billion to create or preserve affordable rental units as part of a $2 billion initiative launched two years ago.
The homeownership program announced Wednesday will back projects near the company’s two headquarters sites in Seattle and Arlington, Virginia, as well as Nashville, a hub for Amazon’s logistics group. The National Housing Trust, a nonprofit, will use Amazon’s cash to acquire or build affordable homes in partnership with local organizations. The company anticipates the cash going to fund community land trusts – which hold onto the underlying land, but sell the structures to defray some of the cost associated with buying a house, as well as down payment assistance.
“Traditionally in the United States, homeownership has been the path to generational wealth creation,” said Senthil Sankaran, managing principal of Amazon’s Housing Equity Fund and a former official with the Washington, DC, Housing Authority. “We wanted to use this pilot program to understand where there might be opportunities to expand access to homeownership for folks that may be shut out from the benefits of homeownership.”
Amazon committed in 2021 to investing $2 billion in below-market loans and grants to support affordable apartment units, adding its sum to the more than $5 billion fellow technology giants had earmarked to help solve a housing crisis in and around their West Coast headquarters cities. The companies have funded a variety of approaches, from low-cost loans to nonprofits to partnerships with government entities or state affordable housing funds. Amazon’s effort is centered on people who make too much to qualify for most government assistance, but are unable to keep up with rising housing costs.
Would-be homebuyers in the last year have had to contend with rising interest rates that can put mortgage loans out of reach. US housing affordability in July was at a record low going back to 1989, the National Association of Realtors said last week.
Amazon’s original fund, which was launched with a goal of creating or supporting the preservation of 20,000 housing units by 2025, is nearing the end of its initial outlay. Sankaran said it was premature to say whether Amazon would reinvest the sum in perpetuity, or whether the scale of the new homeownership program would be expanded in the future. Amazon, thus far, said it has helped build or preserve more than 14,000 rental units to date.
“We’re going to have some additional announcements coming forward,” Sankaran said. “Right now, I’m very focused on meeting the goals.”
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.