How Amazon HQ2 will Impact Housing
Amazon HQ2 is coming soon. For the city chosen as the site for the expansion, that means strained infrastructure, increased home prices, and an estimate of 50,000 new jobs. Amazon HQ2 will bring sweeping growth to its new home, but will it be a repeat of its original headquarters in Seattle? Since its humble garage beginnings, Amazon has grown into the largest property taxpayer and private employer in Seattle. With that, however, comes rapid home price appreciation, traffic congestion, and ongoing construction.
Since 2000, Amazon has added 99,000 jobs, 30% of which are tech-related. As a result, Seattle has also earned the title of the second-highest-paying city in tech. However, with this job growth comes home price appreciation and traffic problems. Median home prices in Seattle’s King County appreciated a significant 17% from mid-2016 to mid-2017. Seattle consistently leads the Case-Shiller home price index in home price appreciation and also ranks in the Top 10 worst cities for traffic.
Citylab, a division of the Atlantic Monthly, analyzed Amazon’s HQ2 finalists based on each metro’s capability to handle the population surge that would accompany its construction. High-priced and hard to build metros like Los Angeles, Miami, Washington DC, New York, and Boston are already experiencing rapid home price appreciation and a short supply of housing. A major population influx would not help cool these heated housing markets. In recently gentrifying cities like Denver, Austin, Nashville, and Raleigh, an addition like Amazon HQ2 would only continue to price existing residents out of their neighborhoods. The study named Chicago Atlanta, Columbus, and Dallas “growth-friendly” cities because of their space to grow in terms of housing and office space. Pittsburgh, Philadelphia, and Indianapolis have even more potential for growth, but their aging housing stock would require upgrading before the population growth.
Amazon will likely announce the location for HQ2 in 2018 and break ground in 2019. In a statement, the company expressed “the ideal city would have at least 1 million people, an international airport, and a stable and business-friendly environment.”
Sources: Business Insider, CityLab