SEATTLE — Amazon and Sound Transit announced a partnership Wednesday to speed up development of as many as 1,200 affordable homes next to light-rail stations, using vacant lots left over after construction.
The e-commerce giant is establishing a $75 million low-interest loan fund for developers, and donating $25 million for site preparation, engineering and permits.
The money will be available immediately, said Catherine Buell, head of community development for Amazon. As developers repay the loans, the money would be recirculated for future financing, she said.
The company’s Housing Equity Fund is announcing similar affordable-housing contributions Wednesday of $125 million around Washington, D.C.-area transit stations, and $75 million along the WeGo bus-rapid transit network in Nashville.
It’s the latest round in Amazon’s $2 billion housing program, that included a $185.5 million commitment in January to buy 470 apartments in Bellevue, and provide another 530 affordable units across the region.
“We are targeting households earning between 30% and 80% of median income,” said Buell. “Many of these households do the ‘drive until you qualify,’ and transportation tends to be more than 13% of their budget,” she said.
Affordable housing near transit will reduce daily transportation costs, compared to a longer drive where property is less expensive, she said.
Amazon’s money is intended to allow faster development, compared to months or years cobbling a deal with a multitude of lenders.
Cash would be lent for a 20-year term at below-market interest rates, with possible forgiveness of the money spent on preconstruction plans, Buell said. She describes the money as “subordinate” loans, to fill the gaps after nonprofit developers tap other sources.
Access to capital is often difficult, which slows the redevelopment of Sound Transit’s excess property, said CEO Peter Rogoff, whose agency already created its own $20 million affordable-housing loan fund.
“They were just quintupled by Amazon,” he said.
Possible housing sites could include 10 lots in Seattle’s Rainier Valley, empty since 2009, that the transit agency gave to the city of Seattle last winter for new housing, and property next to the 2016 Angle Lake Station.
More land will become available at Northgate, Lynnwood, Redmond, Federal Way and Kent/Des Moines stations through 2024. Sound Transit’s “transit-oriented development” program has completed or approved more than 1,500 apartments. New apartments are opening this year next to the Capitol Hill Station, and a 360-unit tower is planned on nearby First Hill.
“We know we can be a gentrifying force,” acknowledged Rogoff, as sometimes transit stations drive up land values.
Even in areas where people earning low incomes aren’t displaced, such as Bellevue’s new Spring District, the influx of market-rate housing tends to be expensive, Rogoff said. Sound Transit is negotiating to establish 280 affordable units there.
Washington state law requires an “80-80-80” rule — that 80% of leftover Sound Transit lands are developed so 80% of units are affordable to households making less than 80% of the median income. (That currently translates to below $74,050 for a couple or $92,560 for a household of four people.)
Rather than seek top dollar or lucrative public-private partnerships on that property, elected leaders here prefer to build transit ridership and social equity through land discounts.
“There’s nowhere better to build affordable housing than near transit,” Sound Transit Chair Kent Keel, of University Place, said in a statement.
Sound Transit’s affordable housing program is ahead of most peer agencies, Buell said.
Los Angeles Metro has designated 35% of its properties to serve households at or below 60% of median income.
From Bellevue to Poulsbo, the central Puget Sound region is one of the nation’s most expensive housing markets, with single-family home prices rising 25% to 35% this past year. Median rent is around $1,400 a month for a one-bedroom apartment, while the median detached house in King County fetches more than $825,000.
Amazon itself is often blamed by residents and city council members for the area’s housing-affordability crisis. A generation ago that reputation stuck to Microsoft, which itself pledged $500 million in 2019 toward affordable “workforce housing” and homelessness relief in the region.
