In partnership with Amazon, we have completed a transaction that will lead to the preservation and creation of 1,300 affordable homes at the 16-acre “Crystal House” site in Arlington, Virginia—a groundbreaking purchase announced today as part of Amazon’s establishment of a $2 billion Housing Equity Fund. WHC’s acquisition of Crystal House will preserve affordable housing for individuals and families in Arlington for 99 years.
This acquisition is possible through Amazon’s $378 million investment in a below-market-rate loan, to create an inclusive, mixed-income community at 1900S. Eads Street. Amazon’s capital also supports the development of a vacant property on the Crystal House site to create more affordable housing for low-and middle-income earners.
Having access to such affordable and ready capital allows us to do more with our existing resources and complete a transaction in less than two months, far less time than is typical in commercial real estate. To support our important social impact work, Amazon is also providing a $2 million grant to WHC for inclusive property management training, placemaking and community-building efforts, and the development of a technology platform to support communication with and services for residents.
This investment from Amazon advances our work to disrupt a market cycle that leads to displacement and offers the kind of stability that lets residents focus on their future, instead of the uncertainty of escalating rents. We’re fulfilling an important milestone toward realizing our vision to create 3,000 housing units in communities of racially diverse middle- and low-income families and individuals. We are making it possible for hundreds of individuals and families to find homes closer to their employment and access high-performing schools and community amenities.
According to the Arlington County government, the county has lost 17,000 privately-owned affordable housing units since 2005. Between 2010 and 2018, the median home sales price climbed 24 percent (after adjusting for inflation) and median rents climbed 11 percent, while median household incomes climbed only 9 percent. This crucial and immediate creation of affordable homes will stabilize rents and ensure that more individuals and families can build long-term wealth and financial stability.
Amazon is providing a $335.5 million below-market loan to the WHC and grants totaling $42 million to preserve Crystal House and create affordable rents for over 619 apartment homes (or 75% of the units), with the opportunity to develop an additional 717 apartments and 21 townhomes on a vacant parcel on the site. Rents will be lowered through natural occurring vacancies to reach rental rates that are affordable to households earning less than 80% of the area’s median income. JBG Smith will manage the property on behalf of WHC. In addition to Amazon’s $378 million investment, WHC is investing $5 million in equity in the acquisition and the Washington Housing Initiative, through its Impact Pool, is providing $6.7 million in loans.
As always, we are grateful for your support and look forward to sharing more information with you as this project unfolds.
Kimberly C. Driggins
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Photo credit: Amazon/Joel Flora