Amazon and other companies invested in affordable housing. Did it work?

To Kimberly Driggins, executive director of Washington Housing Conservancy (WHC), the late 2020 news that Crystal House apartments had come up for sale signaled a rare opportunity.

The 825-unit luxury apartment building had long been an icon in Arlington, Virginia, lending its name to the immediate neighborhood, Crystal City.

Private Corporations’ Entry into Affordable Housing

That deal is a high-profile example of a phenomenon that spread over the last few years: private corporations’ entrée into the affordable housing arena.

In an effort to stem the housing crisis, technology firms, healthcare groups, banks, and other companies announced large financial commitments to fund the construction and preservation of affordable housing.

Today, however, that window of corporate giving to the housing sector seems to be closing. Has it made a measurable difference?

Corporate Commitments to Affordable Housing

The announcements began rolling in around 2019. After steeply rising housing prices in the Seattle area and Silicon Valley led to a public backlash against technology companies there, Microsoft established a fund that eventually increased to $750m. Google committed $1bn, Facebook followed suit with the same amount, and Apple announced it would dedicate $2.5bn.

The next year, when the pandemic and racial justice protests brought the country’s inequities to the fore, more companies made high-profile announcements. Among them were healthcare companies, which have a clear financial stake in housing, and banks, required by the Community Reinvestment Act to invest in lower-income neighborhoods. United Healthcare promised $100m and later doubled it. JPMorgan Chase revealed a $400m fund, and Citibank said it was earmarking $200m for minority developers. In 2021, Amazon announced its Housing Equity Fund.

Loans vs Grants

Most of the tech companies released their commitments with a sizable dose of public relations spin. Frequently overlooked in their press releases and the breathless media coverage was the fact that the vast majority of the funds were being deployed as loans, not grants.

Still, it has meant that the corporations will get almost all of the money back with interest, often at rates close to market levels. Meanwhile, affordable housing groups are making interest payments that could otherwise be used to build more low-cost units.

Impact on Low-Income Families

“Affordable housing” is for households making anywhere from zero dollars to 80% of an area’s median income – which, in a place like Arlington county, is more than $100,000.

Possibly the best-regarded corporate housing effort has been Amazon’s activities in the Washington region. Its Housing Equity Fund is also focused on Seattle and Nashville, but it’s had particular success in Washington.

But even then, Amazon’s projects rarely reached the poorest households – and when they did, it was only because government subsidies were available to offset costs.

Future of Affordable Housing

The level of money that affordable housing groups received probably won’t be seen again anytime soon. It was useful, but in a few years, the units the funding created will be a drop in the bucket.

What the retailer’s money did show, however, was that a reliable source of low-interest loans – from either the public or private sector – can work wonders in a fertile environment, particularly if it’s available over the long term.

The past four years also illustrate very clearly that housing for the most vulnerable households simply cannot be built without vastly more public funding.

“Who can provide a lot of capital at a low rate of return or no rate of return? The government,” said Derek Hyra, an urban policy professor at American University. “If the housing crisis is to be solved, I believe it’ll have to be a public sector intervention.”

SDGs, Targets, and Indicators

1. SDG 1: No Poverty

   • Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership, and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance.

2. SDG 11: Sustainable Cities and Communities

   • Target 11.1: By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums.
   • Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries.
   • Target 11.4: Strengthen efforts to protect and safeguard the world’s cultural and natural heritage.
   • Target 11.7: By 2030, provide universal access to safe, inclusive, and accessible, green, and public spaces, in particular for women and children, older persons, and persons with disabilities.

Table: SDGs, Targets, and Indicators

Analysis

The issues highlighted in the article are primarily related to affordable housing and the involvement of private corporations in funding and supporting affordable housing initiatives. Based on this, the following SDGs and targets can be identified:

SDG 1: No Poverty

The issue of affordable housing is directly connected to SDG 1, which aims to eradicate poverty in all its forms. Target 1.4 specifically addresses the need to ensure equal rights to economic resources and access to basic services, including housing, for the poor and vulnerable.

SDG 11: Sustainable Cities and Communities

Affordable housing is also linked to SDG 11, which focuses on creating sustainable cities and communities. Several targets under SDG 11 are relevant to the issues discussed in the article:

• Target 11.1 emphasizes the importance of ensuring access to adequate, safe, and affordable housing for all.
• Target 11.3 highlights the need for inclusive and sustainable urbanization and human settlement planning.
• Target 11.4 emphasizes the protection and safeguarding of cultural and natural heritage, which can include affordable housing initiatives in historic or culturally significant areas.
• Target 11.7 focuses on providing universal access to safe, inclusive, and accessible public spaces, which can include affordable housing developments that incorporate green spaces.

While the article does not mention specific indicators related to these targets, progress towards achieving them can be measured through indicators such as the number of affordable housing units created, the percentage of households with access to safe and affordable housing, the level of investment in sustainable urban development, and the preservation of cultural and natural heritage in housing projects.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: theguardian.com

Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.