The acquisition was financed through a $381.9 million package of below-market loans and grants from Amazon’s Housing Equity Fund. The Seattle-based tech giant, which has begun to move employees into a planned second headquarters in Crystal City, announced similar initiatives in Washington state’s Puget Sound and in Nashville as part of a $2 billion effort to create 20,000 affordable homes for middle- and low-income families. Bethesda, Md.-based developer JBG Smith also helped with the deal and will manage the property. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
“Amazon provided the financing needed to acquire the building, and they gave us a below-market-rate loan for the property and some land that will be developed at a later date,” said Kimberly Driggins, the housing conservancy’s executive director. “You don’t see many projects like this.”
According to Driggins, it’s not only the partnership between an affordable-housing nonprofit and a retail behemoth that is key to the setup. The conservancy and the Crystal House project aim to create spaces for families and individuals who may make too much money to qualify for government housing assistance but do not earn enough to afford high-demand real estate markets.
“There is a gap around middle-income-housing workers, such as teachers, first responders and people in the hospitality industry,” Driggins said. “They are being pushed out of the core.”
Housing costs in the Arlington area have jumped: According to the county, between 2010 and 2019, the average monthly apartment rent in the area rose 26 percent, from $1,789 to $2,262.
“This is a really strong market city, and wages have not kept up with the cost of living,” Driggins said. “People are increasingly more burdened here by housing costs.”
Over the next five years, rent prices for 75 percent of the units at Crystal House will drop to help residents who are making less than 80 percent of the area’s mean income of $126,000.
“The building is already mixed-income, and many of the residents now would qualify for the affordable units,” she said. “We’re phasing in the affordability over five years. There will not be any displacement of residents in the building. We will be able to attain our goals over attrition.”
As part of the sale terms, the building is to remain affordable for at least 99 years.