Al Jackson, JBG executive vice president of social impact investing
JBG Smith, the dominant developer in the National Landing area where Amazon will build its HQ2 offices, has raised $78 million in an affordable housing initiative. The company hopes to raise between $100 million and $150 million in all. The funds would be used to develop “workforce” housing, targeting households with incomes too high to qualify for government housing assistance but too small to afford the rent on average two-bedroom apartments, reports the Washington Business Journal.
The JBG Smith initiative does not directly address the concerns of community activists who worry that an influx of highly paid Amazon employees will drive up housing prices in the Arlington-Alexandria area, leading to gentrification and displacement of lower-income families. But the addition of “a few thousand” units of housing would absorb a significant percentage of households expected to be drawn to the area. Amazon has said it will hire 25,000 employees over several years. The project likely will attract thousands of employees from other companies and organizations in the Amazon innovation ecosystem as well as people performing retail, construction, and service jobs.
The big question is where that housing will be built. The article quotes Al Jackson, executive vice president for social impact investing at JBG, only as saying that the company will target neighborhoods that could experience “significant gentrification” over the next decade.
Bacon’s bottom line:
The ability of JBG Smith to raise $75 million (and maybe more) to build “workforce” housing suggests that availability of capital is not the bottleneck in expanding the housing supply in Northern Virginia’s urban core. Developers are interesting in serving the housing market for less-affluent Virginians, and they can find the money.
The debate shifts: Can Arlington and Alexandria deliver the needed zoning permissions? I anticipate that JBG will encounter opposition from the same groups that have criticized the Amazon project from the beginning for its impact on the housing market. It’s true that “workforce” housing is not the same as affordable housing for lower-income residents. JBG’s apartment units will not directly help the poor.
But if JBG is allowed to develop at greater density — displacing 1,000 units of low-density housing stock with 5,000 units of high-density housing, to pick numbers out of a hat for purposes of illustration — Arlington and Alexandria could focus their pledged affordable-housing funds on replacing the 1,000 displaced units. If those 1,000 units could be built at five-times higher density in the same neighborhoods, they would displace only 200 units. And so on. Thus, higher density makes the housing problem manageable.
