Amazon has pledged to spend more than $2 billion over the next five years to build tens of thousands of affordable housing units in three of the e-commerce giant’s major employment hubs, underscoring the ongoing housing crises affecting parts of the US where large, high-paying tech employers reside. Amazon’s pledge, announced on Wednesday, follows similar commitments from Apple, Facebook, and Google, all of which previously promised between $1 billion and $2.5 billion each to tackle similar issues plaguing the San Francisco Bay Area.
The parts of the US Amazon plans to invest in include Washington state’s Puget Sound region that encompasses Seattle, as well as Arlington, Virginia and Nashville, Tennessee where Amazon has opened fast-growing offices. The company employs more than 75,000 people in the Puget Sound region alone thanks to its headquarters in the state, and it has around 1,000 employees each in Virginia and Tennessee with plans to expand those workforces to more than 5,000 employees in each sector. (These numbers do not include Amazon’s much larger warehouse, seasonal, and contract workforce that push its employment figures over 1 million people as of October of last year.)
Amazon’s announcement may once have included planned investment for New York City, after lawmakers cut a deal with the company in early 2019 to bring jobs to Long Island City, Queens as part of a highly publicized competition of sorts the company held to attract bids from municipalities around the country. But fierce backlash from local residents and criticism from politicians, including US Rep. Alexandria Ocasio-Cortez (D-NY), led Amazon to scrap its controversial NYC plans and instead focus on expansions of its Arlington and Nashville offices.
AMAZON’S PLEDGE FOLLOWS SIMILAR ONES FROM APPLE, FACEBOOK, AND GOOGLE
“Amazon has a long-standing commitment to helping people in need, including the Mary’s Place family shelter we built inside our Puget Sound headquarters. The shelter now supports over 200 women and children experiencing homelessness every night,” Amazon CEO Jeff Bezos said in a statement. “This new $2 billion Housing Equity Fund will create or preserve 20,000 affordable homes in all three of our headquarters regions—Arlington, Puget Sound, and Nashville. It will also help local families achieve long-term stability while building strong, inclusive communities.”
Amazon is spending its money mostly in the form of low-cost loans, starting with nearly $382 million to the Washington Housing Conservancy to “preserve and create up to 1,300 affordable homes on the Crystal House property in Arlington” and $185.5 million to King County Housing Authority for an additional 1,000 affordable homes in the state of Washington. Amazon plans to announce additional investments in both regions, as well as Nashville, in the coming months and years. The pledge also includes $125 million in cash grants to small businesses, nonprofits, and minority-led organizations, with the goal of helping them “build a more inclusive solution to the affordable housing crisis.”
The unspoken reality of these large housing pledges is that tech companies often play a major role in gentrification and displacement of local communities. That’s often through a complex interplay of factors related to disproportionately high wages and unmatched benefits that allow employees to live in and around city centers despite sometimes working in more rural or suburban settings, where housing is cheaper and in less demand. And as part of its long-term strategy to help attract and retain talent, a company like Amazon has an incentive to make the urban centers and regions it turns into major employment hubs more affordable places to live.
One major goal is to avoid driving away employees who can’t afford to live somewhere like Seattle or, in the case of companies like Facebook and Google, in San Francisco or Silicon Valley. Another goal is to help alleviate the pressure from politicians and activists who often criticize tech companies and their workforces for doing little to give back to the communities within which they build their companies.