JBG Smith Raises $75 Million for Amazon-Related Affordable Housing

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.

Share this article


(comments below)


(comments below)


13 responses to “JBG Smith Raises $75 Million for Amazon-Related Affordable Housing”

  1. Acbar Avatar

    Higher density has its consequences. Around decent public transit, like Metro and the dedicated bus lanes and the (now cancelled) street car lines, it can, even should, be encouraged. But plop that higher density in existing single-family Arlington neighborhoods without building the added infrastructure to support all that density, including new schools and parks and soccer fields, and those neighborhoods will deteriorate rapidly. The less-expensive housing is needed but it needs to evolve organically along with everything that supports it, not be force-fit into existing low-density neighborhood infrastructure. That will be Arlington’s challenge, whether (and how) to build out in ways that prepare the County for the Smith Co’s largesse.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Acbar raises an important point. Fortunately, any new high density project in Arlington County will be located amid a highly complex preexisting well established urban matrix. Today’s advanced analytics allow sophisticated developers to mix and match within this matrix to find and build custom solutions that work as if by magic. JBG does this as well as or better than anyone. The strongest aspect of this entire transaction are its principals.

  2. LarrytheG Avatar

    I agree. “Density” is not a zoning issue per se. The bigger issue is where is the rest of the stuff that is needed to serve that density – and who pays for that?

    And how about those who say land-use restrictions are the issue – name them ? If we want to advocate for less restrictions – how about articulating specifically where Arlington needs to change?

    I have a dim view of subsidizing housing for higher than average paid folks – at the same time you’re pushing out service workers…

    1. “How about those who say land-use restrictions are the issue – name them.”

      Er, density limits are a land use restriction. They are embedded in zoning codes and comprehensive plans.

      1. LarrytheG Avatar

        er… density limits are based on the capacity of infrastructure (like water/sewer, roads).

        If the implication is that ANY/ALL such restrictions are what is the cause of less affordable housing – what does that mean? That no restrictions is the “solution”?

        I think you’ve jumped the shark here. I was expecting some discrete and specific things upon which we could judge a given locality for how well they supported more density that did end up generating more affordable housing – but the way you’ve defined it – it sounds like there are NO examples of “good” zoning because zoning itself is the problem?

  3. Jim Loving Avatar
    Jim Loving

    This should be interesting to watch, for lots of reasons. Given I now live in Falls Church City, and rent (after owning in MD for 36 years and declining to buy in NOVA), I might be a candidate myself for one of these!

    In recently traveling this past month to a weekly appointment in Shirlington (South Arlington) along Route 7, West to East, I could not help but notice the large disparity in the development along this corridor as compared to say in Falls Church/Arl/Alexandria closer to Metro. There are LOTS of multi-unit Apartments that could be candidates for re-development, but… with the following caveat – not along Metro. I can’t comment of viability of Bus service from this corridor (Bailys Cross Roads extended), but it would be in the 4-8 mile range from Crystal City Metro. There could be enhancements to Bus service along Columbia pike. There are a few new multi-use developments going up now (at corner of Rt 7 and Walter Reed Dr.).

  4. LarrytheG Avatar

    The problem with “affordability” is that it means different things and when people dialogue about it – they often are not even talking about the same thing.

    Apartments are more often than not “workforce” housing which higher in cost that the kind of housing that many service workers (at minimum wage) could “afford” and yet it’s NOT housing that college-educated professional want – that housing – single family detached in a low-traffic subdivision – is way more expensive in NoVa and many of those folks become commuters to exurban counties that ring the DC urban MSA.

    And yes,,,if we build a bunch of apartments and townhouses away from METRO – most of those folks have cars and use them.

    The truth is that despite what Jim is saying that most jurisdictions DO ALLOW high-density apartments pretty much everywhere – all up and down the major road arteries in the NoVa region and they have the traffic and schools to prove it,

    I’m not sure at all what Jim and others like him would advocate for – since Arlington, Alexandria and Fairfax are quite heavily developed already in multi-story apartments,

    And again – when we say “bus service” – the very same folks like Jim B then come back talking about how terrible “subsidized” bus service is so it’s pretty much damned if you do and damned if you don’t.

    I just do not see any real and substantiative “ideas” on “affordable housing” if the primary suggestion is that density “restrictions” of any kind are evil and the root cause of “affordability” issues.

  5. Top-GUN Avatar

    “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.”
    I’m wondering where that 150 million comes from… my tax dollars possibly? ?

    1. No, JBG has raised that money from private financial markets.

  6. TooManyTaxes Avatar

    Where will the employees want to live? Doesn’t the answer to that question have a lot to do with where housing should be built?

    I came to D.C. to house-hunt in the early fall of 1984. My employer suggested a realtor based on my preference to live in Virginia. I had made that choice because a number of my new co-workers had told me that taxes were lower in Virginia. The first thing I did when I talked to the realtor was to answer questions about what I wanted in location, commuting, neighborhood, price range, etc. Why would that be different for people moving here to work for Amazon? And people who already live here, already live here.

    1. Acbar Avatar

      TMT, you are right of course about the future Amazon employees and existing homeowners. But we should also be concerned about the displaced service industry folks who support all those existing and new residents: the lawn servicers and dishwashers and retail sales folks. They live in many of those less expensive apartments in south Arlington, Baileys, Annandale, Hybla Valley, Reston, Woodbridge today. Will they be able to afford to remain there? — probably not. Where else could they (must they) move to and still get to work via existing transportation modes in an even denser Arlington of super-expensive condos and SF homes? Will the places they move to have the schools and playgrounds for them? That’s the crunch coming for us in NoVa; I can only hope the planners can stay on top of it.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Acbar – Arlington had this well figured out and executed through the 195o’s. Then along came the mad, undisciplined, self-centered, anti social 1960’s and 1970’s, a generation whose attitudes lost of the nation’s social competences, thus blew up formulas that had been developed and worked from late 19th century to mid-century. For example, post mid century leaders could not successfully make of the subway anywhere near as cost effective, and competent as earlier generations made out of the brand new electric trolley.

        The new upper classes also refused to live alongside middle and lower classes, and the middle did the same to the lower. And no one admitted to it. Mobility powered by their relative wealth, status, I’ve got mine values, self segregated these folks in new and more powerful, destructive, dishonest and camouflaged, ways and means. The NIMBY revolution that exploded into a long lasting plague in half a decade during early 1970s was chief among these bad habits, along with the out of control demands of car owners exploded too, a revolution fueled by too often short sighted mass highway constructions. Even Dulles Airport turned itself into a monster. The powerful and affluent pridefully though they could outrun problems and get rich quick and richer forever everywhere, by building single stand alone structures and projects for their own singular purpose and advantage, without regard for holistic socially synergistic communities.

        This post 1960s generation of leaders was full of toxic strategies. Like how they built with the singular purpose to make themselves richer and richer endlessly while passing off the costs of raising healthy families and self generating communities onto others out of sight elsewhere. Thus they rolled out across the countryside leaving wastelands behind. Now we clean all this up, and we will rebuild anew intelligently, and do the same growing outward to the west as well, into Virginia’s Inland Empire, using all the new technologies and market forces those technologies generate, while deploying land use and development lessons learned the hard way over the past 60 years. We’ll also find new ways to span the Potomac to solve problems, and generate more opportunities of more sorts of people.

      2. TooManyTaxes Avatar

        Amazon is going to grow slowly. And despite the fantasy of the enviros, workers are not all going to live in shity little apartments to save the world. They will live all over the place especially when they have families. I don’t think all the lower-income people are going to be displaced.

Leave a Reply