2024 Fall Issue of Urban Land - 83

Most of our loans, for example, come in as
subordinate debt. We still want the owner to
go to the markets and leverage as much debt
as they can . . . to support the goals of the
project. But by having access to our lowerrate
capital, they can still meet the returns
that they need for their own individual investors;
and to cover the cost of their debt, which
is usually significantly higher than ours.
[In] exchange for this lower-rate capital,
they then can afford to rent the units . . . at
lower rental rates. So, it preserves the incentives
for the owners and the developers, and
provides enough cash flow. It's really important
for us that the projects still cash-flow
enough so that they can maintain the property.
But because they have access to Amazon's
lower-rate capital, they can then afford
to rent it out to lower-income tenants.
UL: How does the Housing Equity Fund support
its partners?
Sankaran: The Housing Equity Fund has really
been an accelerant, more than anything else.
It's important to note that there are a lot of
players in this space already doing great work
. . . . There are folks out there, a lot of highly
motivated, mission-focused developers and
owners, that are looking to provide affordable
housing in these communities. However,
there's limited capital sources that help, so,
what ends up happening is that projects get
launched, but they end up waiting and waiting
because there's limited access to the public
funds that [can] come into a deal.
Our fund helps public sector partners
stretch their dollars further. Say, without the
access to our capital, they're able to fund 10
projects in a year. Well, maybe with our dollars
coming in and lowering the cost of doing
some of these projects from the developer
perspective, each of those projects requires a
smaller amount of public capital. So, now they
can do 20 deals a year. [As] a deal sits . . .
waiting for the additional capital to go, costs
unfortunately don't stay constant-they also
continue to rise.
For example, we have a project in the D.C.
area-in Tysons, Virginia, where we're working
[with] APAH-the Arlington Partnership
for Affordable Housing. They were working
on a deal, in partnership with Fairfax County,
adjacent to the Springhill metro station . . . a
former site of a car dealership, [where] the
county wanted to put affordable housing . . .
. They helped acquire the land, and they were
contributing the land into the project. And it
was going to be multiple years, [probably] 7
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to 10 years, multiple public financings . . . to
do the units.
They had come to us about phase one,
which was going to be 100-and-something
units. And we really worked with them closely
to understand what the needs were. [We
said], " Well, what if we gave you more than
what you came to us [for]-could you accelerate
this project and deliver more units faster? "
And, creatively, we were able to [do so], in
partnership with the county . . . with the nonprofit
developer, and by putting in the additional
capital to help speed things up. They
took on more than they originally planned on
doing. Instead of doing 100-and-something
units, [they] are now building 500-andsomething
units that [they] will deliver in 3
years versus 7 to 10 years. And that addresses
a need today, so that's been a big part of
what we've been trying to do.
UL: Are all of your projects near public transportation?
Sankaran:
Ninety-five percent of our projects
would be considered transit-oriented development.
They're located within a half a mile of
. . . fixed rail, light rail, or high-frequency bus
lines, which is critical because the two biggest
costs in a household budget, typically,
are housing and transportation. [If] you can
locate affordable housing near transportation,
you're reducing both of those things, which
then leads to [a] greater amount of disposable
income for each family, [which] can then
choose how [to] deploy those dollars, whether
that be [toward] food, education . . . . It [has]
In Bellevue, Amazon is
partnering with Sound
Transit and BRIDGE
Housing to create
233 new-construction
affordable apartments in
the Spring District/120th
light rail station area.
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2024 Fall Issue of Urban Land

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