Amazon said it will commit $125 million to developers who have entered into joint development agreements with Metro. Out of the total, $25 million will be set aside for minority-led development companies. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
“By providing flexible, low-cost capital, we’re not only able to help support the work that WMATA has been able to do for some time, but help accelerate it,” said Catherine Buell, head of community development at Amazon.
In doing so, the initiative could boost ridership for a transit system scrambling to emerge from the coronavirus pandemic.
“I think it just fits very well with the overall strategy that we’re taking,” Metro General Manager Paul J. Wiedefeld said. The move puts low-to-moderate-income residents closer to transit that connects them with jobs downtown and at other business centers where housing and parking are expensive.
The Seattle-based tech giant, which has begun to hire thousands of employees into a second headquarters in Arlington’s Crystal City neighborhood, announced similar initiatives with transit agencies in Washington state’s Puget Sound region and in Nashville.
The $300 million across the three metro areas will come from the company’s Housing Equity Fund, a $2 billion effort to create 20,000 affordable homes for families in the cities where Amazon has the largest footprint.
In the Washington region, the money must go toward developers who have joint agreements with Metro, and individual developers need to apply for funding. Out of eight joint initiatives that have received approval, six are in Maryland, with one each in D.C. and Virginia — although none are near the HQ2 site. More are likely to appear along the 11-mile Silver Line extension into Loudoun County.
In Montgomery County, construction has started on a 14.7-acre site near the Grosvenor-Strathmore station, which will include 2,000 units of housing, retail and parking and office space. Andy Altman of Fivesquares Development, which is behind the redevelopment, said the money from Amazon could allow his firm build more affordable units — and build them faster.
One 400-unit building on the site, which is set to include 100 apartments below market rate, could begin construction as soon as next year, when it otherwise could have taken years, he said.
Other projects that could benefit from the fund include:
● A 2.4-acre mixed-use complex at New Carrollton, with homes for 650 residents.
● A mixed-use residential and retail project at the College Park station with about 430 multifamily units and retail space.
● A mid-rise apartment building at Takoma in the District, with more than 200 units.
● A project at West Hyattsville on 5.3 acres of Metro property will be folded into an adjacent 18.5-acre property to include 300 apartments and 183 townhouses.
● A 1 million-square-foot site near West Falls Church in Fairfax County that includes 657 apartments and 75 townhouses.
Still, the goal of 1,000 new units sought by Amazon is probably a small fraction of the homes needed to keep working-class residents in a region that is pricing them out. In a September 2019 report, the Metropolitan Washington Council of Governments said 320,000 new housing units — including at least three-quarters that are affordable to low- and middle-income households — would be needed in the region by 2030.
Buell said other institutions also must help address that scarcity.
“The demand for housing affordability preceded Amazon coming into the capital region,” Buell said. “This is really our way of helping to solve the problem. We’re not going to solve it alone.”
Of the $2 billion in the Housing Equity Fund, about $500 million has been committed to specific projects. Earlier this year, Amazon said it helped the nonprofit Washington Housing Conservancy purchase Crystal House, an 825-unit apartment complex in Arlington’s Crystal City neighborhood.
Buell said that Amazon will soon open an application process for the remaining funds, which will guide the next affordable housing investments.
Metro is looking to these new residential developments around stations — as well as the addition of Amazon’s HQ2 — to create new passengers, replacing hundreds of thousands of riders the agency expects won’t return to their pre-pandemic commuting patterns.
When workers abandoned offices in March 2020, their absence sent Metro’s fare revenue to a free fall. Office and federal workers make up the largest customer base for Metrorail, which generates 80 percent of the transit agency’s revenue.
Many workers are being granted increasing flexibility to work from home, which will continue to put a damper on future revenue. Last week, Metro saw a jump in riders, posting its highest count since the pandemic, but rail ridership is still about one-fifth of pre-pandemic totals.
The transit agency expects ridership levels to grow slowly, reaching about 34 percent of pre-pandemic levels between July and June 30, 2022, and between 70 and 75 percent in the summer and fall months of 2023.
Metro has been replacing lost revenue with $2.5 billion of federal aid, included in three stimulus packages approved during the pandemic. In the meantime, Metro board members are shifting service and lowering fares in hopes of regaining riders.
A reliable base of riders during the pandemic has been “essential” service workers and low-income residents, according to Metro records and surveys. Many transit agencies are prioritizing making service more accessible and convenient for them, and low-income housing on Metro land near transit fits with the goals of Metro’s board.
“A lot of either low-income or moderate-income people can’t afford to get close to some of these centers because they’re priced out of the market,” Wiedefeld said. “So by bringing them into that, it’s not just that they have better transit access for that location, but now they have it for the entire region.”