Amazon Housing Fund Sends a Political Message
By Katie Wilson
At a press conference last month, Mayor Bruce Harrell stood on a podium and thanked Amazon for funding affordable housing in Seattle. He was joined by the director of Amazon’s Housing Equity Fund and representatives of three housing development organizations led by people of color who receive loans or grants from Amazon totaling a total of $ 23 million: Mount Baker Housing, El Centro de la Raza, and Gardner Global, a Black-owned developer working on a mixed-use apartment project on the former site of the Mount Calvary Christian Center in the Central District.
This is Amazon’s latest disbursement from the $ 2 billion Amazon promised last January for affordable housing at three of its employment hubs. Three of the projects, including the Mount Baker Village conservation project, are affordable to people earning up to 60 percent of the Seattle area’s median income, currently approximately $ 54,000 per person; Gardner Global’s development in the Central District will include units for households up to 80% of the area’s median income.
Today, Amazon is Seattle’s largest employer — and now Washington state. For the past six years, Amazon’s relationship with the city and its politics has been rife, with notable tax disputes, heavy bids to influence local elections, and tech worker protests over the company’s role. in the climate crisis. Given this history, it’s worth taking a closer look at Amazon’s investment in affordable housing: its size, what it means for recipients and companies, and its political importance.
To start with the obvious, $ 23 million isn’t a huge sacrifice for Amazon, especially considering that $ 15 million came in the form of low-interest loans to be paid.
JumpStart brought in an impressive $ 248 million last year. If Amazon’s tax bill is actually in the order of $ 124 million, these grants are about one-fifteen of that.
It helps to compare the $ 8 million Amazon will spend on two of the projects as grants to what the company can give to the city this year thanks to JumpStart Seattle, a payroll -based tax paid by the city’s largest employer to pass in 2020.
Neither Amazon nor the city will disclose that number. But back-of-the-napkin math suggests the company could easily be responsible for more than half of total tax revenue, given the size of its Seattle workforce and the graduate tax structure, whose rate is rising based on company size and worker compensation. JumpStart brought in an impressive $ 248 million last year. If Amazon’s tax bill is actually in the order of $ 124 million, these grants are about one-fifteen of that.
According to Seattle Councilmember Teresa Mosqueda, “$ 97 million from JumpStart went to the Office of Housing to provide in the 2022 calendar year” to support affordable housing projects and services. Since another large portion of the first year’s revenue went into pandemic -related budget holes, he said, “we should be able to do more next year.”
Those city funds are already enabling the acquisition of property and development of affordable housing in at least 16 areas around the city. I wish those projects and the progressive tax revenue that supports them have garnered as many press conferences and as much media fanfare as Amazon’s housing fund inspiration.
All this is not to say that Amazon’s voluntary grants and loans are not important to their recipients. Combining funds to build and operate affordable housing is extremely difficult. Estela Ortega, executive director of El Centro de la Raza, which received $ 3.5 million for an 87-unit project in Columbia City for families earning between 30 and 60 percent of the area’s median income, said the grant helps to close a gap caused by rapidly rising costs.
“We had a $ 54 million budget early in the year, then our contractor made a new estimate and it reached $ 58 million,” Ortega said. “Amazon’s money is critical. If we need to raise another few million, we won’t be ruined in January of 2023, which is our plan.
It also illustrates that Amazon’s contributions, even though they may be valuable, are a small portion of the funding for these projects: That $ 3.5 million almost covers sales tax costs for El Centro Columbia City. The project also receives $ 5 million from the state Housing Trust Fund and more than $ 11 million from the city of Seattle, among other sources. (Notably, Seattle’s contribution includes more than $ 7 million from JumpStart. If my speculative math is correct, that means Amazon could pay for the project through taxes just as much as through a grant.)
You can’t really blame Amazon’s public relations team for heading its press release— “Amazon to fund construction of 568 affordable homes in Seattle” —to the company’s best advantage, which subtly suggests that Amazon can respond in full. bill. It’s less forgivable for the Seattle Times to start its coverage the same way— “Amazon pledged Thursday to provide $ 23 million to create and maintain nearly 600 affordable homes in Seattle” —and then not to mention all to the rest of the rest. source of funding or the total cost involved. The average member of the public, who is no expert in housing development and finance, can easily get stuck with the impression that Amazon alone is gifting us 600 affordable homes.
None of this could be important, and could be considered nitpicking, if there was no greater political significance to Amazon’s actions. But the tenor of the press conference in June, in which Amazon was in the role of good corporate citizen, was quite different from the battles of recent years to make a surprise. When Amazon’s housing fund was first announced and an initial round of recipients in 2021, the absence of projects in Seattle was noticeable. Instead, $ 185.5 million (most of the loans) went to projects in Bellevue, the favorite foil of every pundit in Seattle when it comes to Amazon-politics. So what does it mean that Amazon is suddenly playing very well with its hometown?
One possibility: Taxes. Seattle is looking at a huge budget deficit for 2023 — even tens of millions, and possibly more. City departments have been asked to game out potential budget cuts of 3 to 6 percent. City projections are improving in the coming years, but nevertheless, this fall, elected officials will face a choice: To cut back, or seek new revenue? A task force will soon meet to review the city’s progressive tax options, and an obvious option is to dial JumpStart. Will Amazon’s one -time housing contribution serve as leverage against raising the company’s tax rates in the future? This is not a distant idea.
“We need to continue to expand our progressive revenue base so that those companies that work very well, even during a global pandemic, contribute to the fabric of the city. We need it every year, not just in whim of corporate decision -making. ” – City Councilmember Teresa Mosqueda
Since Amazon could benefit politically from these loans and grants, how should we feel about the company’s actions? That is the question that fund recipients and local elected officials must directly face.
“In working with many powerful corporations in the area, we know they have high -level policies that are not always in the best interest of the community,” Ortega said. “We never hesitated to stand up and raise our voice for the community. Therefore, our position is to receive funds from these entities because we have met good people on a local level, on the ground, who want to help the community.
“Whenever there is a philanthropic contribution or corporate donation, of course we need the money, we need it hard and it is appreciated,” Councilmember Mosqueda said. But pinky one-time infusions can’t replace stable and progressive profits, allowing publicly accountable leaders to make investments with the entire city in mind.
“We need to continue to expand our progressive revenue base so that those companies that work very well, even during a global pandemic, contribute to the fabric of the city,” Mosqueda said. “We need it year over year, not just on the whim of corporate decision -making.”