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Amazon and… Affordable Housing?

By Emily Hazelton

In late 2023, I received a glossy mailer from Amazon. Across the front it read, “Amazon’s Housing Equity Fund works with local partners to increase housing across the Puget Sound.” And on the back, “We believe everyone should have access to housing they can afford.”

These claims felt outrageous, since I remember Amazon keenly opposing progressive taxation in Seattle that was designed to generate money specifically for affordable housing. Is Amazon starting to care about social justice issues?

I’ll recap part of Seattle’s struggle to tax big corporations, as briefly as I can.

In May of 2018, the City Council unanimously passed a head tax on high-profit companies to raise $47 million per year for affordable housing and emergency services to houseless people. Fewer than 600 businesses in Seattle would have paid the tax — only companies with annual revenue exceeding $20 million would owe $275 per Seattle-based employee per year. Amazon made $232.9 billion in 2018 and employed about 45,000 workers in Seattle, so they would have paid approximately $12 million annually.

Before the legislation had even passed, Amazon announced they had halted plans to build or occupy two towers in the downtown area, which represented 7,000 new Amazon jobs.

Amazon, Starbucks, Vulcan, Kroger, and Albertson’s then each contributed $25,000 to a “No Tax on Jobs” campaign to put a referendum on the ballot so the public could repeal the tax. The PR of the anti-tax campaign was extremely successful at pinning the housing crisis on council members for ineffective management, and council members began to fear they’d lose the head tax and get voted out of office. As a result of the pressure and a turn in public opinion, 7 out of 9 council members voted to repeal the tax (only Kshama Sawant and Teresa Mosqueda voted to keep it).

The next year, Amazon spent $1.45 million ahead of the 2019 election to support more moderate City Council challengers (this effort was not successful, and Sawant’s opponent even blamed his loss on Amazon’s support).

The Tax Amazon momentum ultimately prevailed — after the politicians regained their seats, they passed JumpStart Seattle, a payroll tax that allowed the city to invest in affordable housing ($97.2 million in the 2022 budget and $137.6 million in 2023) — but this was in spite of Amazon’s firm opposition.

At both a national and global level, one can find ample news coverage of Amazon avoiding taxes. The federal corporate tax rate in the United States is 21 percent. In 2017 and 2018, the company did not pay federal taxes at all. During the pandemic, the company made record profit ($21.3 billion in 2020 and $33.4 billion in 2021; profit is revenue minus expenses). And yet they paid an average of 7.5% in taxes across the two years.

A picture of 6 story urban housing development. White text on yellow background reads,  "Amazon's Housing Equity Fund Works with local partners to increase affordable housing access across Puget Sound."

So why is Amazon supporting affordable housing, now? While there is no public information about Amazon’s motives for launching the Housing Equity Fund, a nonprofit labor organization (Warehouse Worker Resource Center) recently leaked Amazon’s community engagement plan for South California. The document reveals the corporation’s logic behind philanthropic endeavors.

The geographic area discussed in the leaked plan is called the Inland Empire. Located east of Los Angeles, the region holds roughly 4,000 warehouses, which cover over 1 billion square feet of land. Land is cheap in the Inland Empire, and proximity to the ports of Los Angeles and Long Beach make it a convenient place to stage shipping logistics. About 40 percent of U.S. goods travel through this region.

The rapid pace of warehouse development is cause for concern for many residents. Activists have highlighted that warehouse jobs are low-paying and dangerous. And all the trucks that carry that 40 percent of our country’s stuff pollute the air and make people sick. Jen Larratt-Smith — founder of R-NOW (Riverside Neighbors Opposing Warehouses) — told KQED, “With all these corporations coming in from outside, buying these warehouses, basically they’re exploiting our land. We have to pay the price of the traffic and the air quality and aesthetics and quality of life, but we don’t really reap any of the benefits.”

In 2023, the American Lung Association ranked San Bernandino and Riverside (counties in the Inland Empire) as the most smog-polluted in the country. That burden falls unfairly on Black and brown community members who live in this particular sacrifice zone. According to the American Lung Association, “research has shown that people of color are more likely to be exposed to air pollution and more likely to suffer harm to their health from air pollution than white people. Much of this inequity can be traced to the long history of systemic racism in the United States… Over the years, decision-makers have found it easier to place sources of pollution … in economically disadvantaged communities of color than in more affluent, predominantly white neighborhoods.” 

In a section titled “Political Landscape in Southern California,” Amazon’s community engagement (CE) plan acknowledges these issues: “The company is perceived to build facilities in predominantly communities of color and poverty, negatively impacting their health. Combined with labor organizing efforts and [sic] the brand and reputational risks remain substantial in Southern California.” The report seems to suggest that the way to manage such “perceptions” is to woo local politicians. The section pivots and goes on to say, “In 2023, a warehouse tax in Perris California garnered more than fifty percent of the vote, but failed to meet the two thirds threshold for new taxes. Similar efforts are likely across the region as municipalities struggle to adapt to the post-Covid stimulus economy. Perris Mayor Marty Vargas is an influential elected leader that we have cultivated through PPE donations to support the region, touring him and his team, and ongoing engagement. He also influences the governing body of KSBD [San Bernardino International Airport] (regional air-hub).”

The report references a dataset that showed customer’s top concerns for the region: homelessness, supporting children and families in poverty, and reducing hunger. In response to this, Amazon will “double down” on increasing visibility on “these important community concerns” by renewing three campaigns — Feed SoCal (donating to local food banks), Back to School, and Holiday Toy Drive. The team will ensure that these campaigns receive media coverage, with “broad based story pitching, including to Spanish language press.” The team will make sure to “reflect the language in the CSI data, including using the words ‘hunger,’ ‘homelessness.’” They will “work with communications and PR to ensure our speeches, press releases, any external communication ties back to these topics.”

The entire report outlines ways to combat negative impressions and build goodwill, which Amazon can leverage politically and reputationally. Some choice quotes from Amazon’s task list:

  • “Continue to build relationships with influential community voices through partnership and sponsorship efforts in Southern California. This includes support of organizations such as San Diego Pride, Feeding America, Donors Choose, local community colleges, and International Community Foundation to positively influence policymakers and generate third party validators and advocates in the Southern California region.”
  • “Develop five go-to community partners that I can call on to rally behind any priorities. Will do this by focusing on these relationships and cultivating deep trust and friendship.”
  • “Continue to partner with BEN [Black Employee Network], Glamazon, Warriors, Latinos, and Women affinity groups on local sponsorships including parades, convenings and other activations that highlight the diversity of our employees…. For example, we will work with Warriors@ to develop our Veterans Day activation at Riverside National Cemetery; our GLAMAZON group for San Diego Pride.”
  • “Earn trust with third party partners to combat Warehouse Moratorium Legislation AB 1000 (Reyes) and AB 1748 (Ramos) — bills that will continue to threaten the region’s economy, and Amazon’s interests.”
  • “Positively affect legislative attempts to ban Single Use Plastic by showcasing Amazon as a leader in sustainability and counter the voices of environmental activists against Amazon. We will highlight our Climate Pledge, renewable battery investments in SoCal, new electric trucks at the Port of LA, the sustainable story around drone deliveries.”

Additionally, community organizations that didn’t meet “partnership expectations” and “that did not result in measurable positive impact in our brand and reputation” will be cut off from Amazon money in 2024. The report gives an example: “In 2022 and 2023, we donated to The Cheech Marin Center for Chicano Art & Culture in Riverside. In 2023, the Cheech Center exhibited a local artist who depicted an Amazon facility on fire, and the artist then gave an interview expressing hostility towards Amazon. We will not donate to The Cheech.”

Now, back to the mailer. Let’s look at the numbers that Amazon provided.

“We created the Amazon Housing Equity Fund, committing $2 billion+ to create and preserve affordable housing across the Puget Sound and our hometown communities.”

If it feels spooky that Amazon’s language is so aligned with demands from Seattle activist and progressive groups, consider that this language is probably crafted to reflect those concerns. Also, note that it says, “and our hometown communities.” The fund money is distributed across three regions where the company operates: Puget Sound in Washington State; Arlington, Virginia; and Nashville, Tennessee (it does not include funding for the Inland Empire). The disbursement of the $2 billion is spread over five years.

Additionally, the fund offers a mix of below-market loans and grants (loans need to be repaid, whereas grants do not). The Guardian calls out the “breathless media coverage” of Amazon’s Housing Equity Fund and comments that “loans, if they’re low interest with long terms, can be incredibly useful to fill funding gaps. Still, it has meant that the corporations will get almost all of the money back with interest… That is, earning tens of millions of dollars annually from these commitments. Meanwhile, affordable housing groups are making interest payments that could otherwise be used to build more low-cost units.“

“$40 million committed to help moderate-income residents become homeowners, including hundreds of families across the Puget Sound.”

In September 2023, Amazon announced a pilot project committing $40 million to help up to 800 families become homeowners (prior Amazon funding has focused on rental properties). This money will be distributed by National Housing Trust (NHT) to organizations in the Puget Sound, Arlington, and Nashville (note the word “including”).

NHT is a nonprofit whose mission is to create and preserve affordable homes. One of their strategies is providing loans to bridge gaps where traditional financing may not be available. NHT states that the initiative will use both “loans and grants to support nonprofits building, preserving, and stewarding affordable homeownership projects” and that the majority of beneficiaries (but not all) will make less than 80% of the area median income. In 2022, the median income in Seattle was $115,400, a salary well outside the range of many service workers, teachers, artists, or nonprofit employees.

In Puget Sound, Habitat for Humanity is receiving a low-interest loan from this pilot program, which “comes at a critical time when securing financing has become more challenging due to rising interest rates.” The announcement from Habitat for Humanity goes on to say, “The commitment of Amazon and its partners is a step in the right direction, but it also underscores the need for a broader mobilization of resources and a collective effort to address the pressing need for affordable housing.” King County, they say, will need nearly 17,000 new homes each year for the next two decades to meet demand.

“$549 million invested … to create or preserve 5,500+ affordable housing units in Seattle, Bellevue, Bothell, Renton, and beyond.”

This is the true amount that has been invested in the Puget Sound Region from the Housing Equity Fund. If I added up all the numbers on the mailer I received, the sum would be $2.6 billion. It feels like the company is trying to leverage its nationwide philanthropy to maximum emotional impact, creating a feeling of excitement and gratitude without too many specifics. The tactic does not feel transparent. A community impact report states that in 2022, Amazon donated $78 million to support the work of 300 organizations in the Puget Sound. I’m assuming that a donation is a grant and does not need to be repaid. This alone is great PR; the company could specify how much money went to specific projects, the distribution between loans and grants, and only focus on the Puget Sound, and I would feel much better. As it is, I feel like Amazon is yelling key words — “housing,” “community,” “equity,” “access” — and then whispering numbers in my ear ($5 million, $20 million, infinity million). It’s creepy.

I don’t think Amazon’s actions speak to a growing sense of community reciprocity or social justice. The Housing Equity Fund, it seems to me, is a begrudging response to pressures of taxation and activist organizing. Amazon also followed in the footsteps of other tech companies. Microsoft, Google, Facebook, and Apple all announced housing funds in 2019 (the same year Amazon was trying to buy Seattle City Council with $1.45 million in campaign contributions). Amazon’s Housing Equity Fund was not announced until early 2021.

As we saw in Amazon’s leaked plan for the Inland Empire, any financial investment must tie to positive media coverage and reputational outcomes for the company. Unlike paying taxes, Amazon will get most of this money back (with interest), can use it to counter narratives about negative impact on communities, and can choose to withdraw the funding if it doesn’t see positive PR results.

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