Over the next decade, rent in mid-market cities like Raleigh, Indianapolis and Columbus, Ohio, could rise by as much as 2 percent, or up to $15,000, and homeowners are likely to see a boost in property values, according to a new study.
The city eventually chosen by Amazon to host the tech and e-commerce giant’s second U.S. headquarters will benefit from an influx of 50,000 new jobs and $5 billion in direct investment — but its apartment dwellers could feel the squeeze from higher rent, according to a new study by Apartment List.
Over the next decade, rent in mid-market cities like Raleigh, Indianapolis and Columbus, Ohio, could rise by as much as 2 percent, or up to $15,000, in addition to baseline rent growth, according to the Apartment List analysis of rental rates in the 20 cities chosen by Amazon to host a second corporate headquarters. Renters in larger metro markets, like New York City and Los Angeles, could see rates rise less rapidly over the same period, to as much as $2,182 and $6,009, respectively.
Homeowners, however, could see property values rise with the influx of 50,000 highly paid Amazon employees and as many as 66,250 supplementary workers over the next 10 years.
“For renters, the Amazon HQ2 basically guarantees rents will increase more than they would have without the Amazon HQ2, although to differing degrees depending on the city and how close the renter lives to that headquarters,” Sydney Bennet, a senior research assistant at Apartment List, the online rental listings aggregator, told Inman News on Friday. “For homeowners, that could be a big plus if their home value increases, but for renters who don’t have a locked in rate that they’re paying every month, it could mean getting priced out of their apartment or their market.”
On Thursday, Amazon narrowed its list of potential host cities for the second corporate headquarters to 20 metro markets, from a massive roster of 238 sites announced in September. Atlanta; Austin; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland; Nashville; Newark; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh, North Carolina; Toronto; and Washington, D.C., all made the cut.
As called for in a request for proposals last year, only cities in urban or suburban locations in a “stable and business-friendly environment” with at least 1 million people were eligible to apply.
Amazon has previously stated that Seattle, where the company launched in 1994 as an online retailer, added an estimated $38 billion to its economy, in part from added taxes and spending.
“Thank you to all 238 communities that submitted proposals. Getting from 238 to 20 was very tough — all the proposals showed tremendous enthusiasm and creativity,” Holly Sullivan of Amazon Public Policy said in a statement released on Thursday following the announcement. “Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”
In the coming months, Amazon will work with each of the 20 finalists to evaluate the feasibility of planting a headquarters there and request additional information about their proposals, the company said in the press release. Amazon plans to make a decision before the end of 2018.
Amazon has vowed to invest $5 billion toward building the headquarters and to create at least 50,000 jobs. The indirect effects of Amazon’s presence would also likely boost the local housing market wherever the company ends up, and some real estate pros like Re/Max Co-CEO Adam Contos think Amazon’s choice will help facilitate a “booming” housing community.