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HQ2 and Housing Affordability

HQ2 and Housing Affordability

November 8, 2018
aerial view of New York City and Central Park
Photo: Unsplash/Barron Roth

Though Amazon has not officially announced the location of its second headquarters, HQ2, it is allegedly in talks to split it between two cities, Crystal City, a suburb of Arlington, Va., and Long Island City, a neighborhood of Queens, N.Y.

HQ2 will bring with it a reported 25,000 jobs with the highest average salary at $100,000, though the question lingers for both locations: where will the new employees live? In Seattle, home base to the flagship Amazon headquarters, “They created a big problem with a lack of affordable housing in Seattle," says KC Conway, chief economist at commercial real estate group CCIM Institute in Chicago, “And now they’re dragging it with them to the East Coast.” Jonathan Miller of real estate appraiser Miller Samuel in New York City tells Realtor.com that home prices are projected to increase between five and 10 percent in these cities if Amazon moves in.

Over the course of its two-decade existence, the online behemoth has utterly transformed this coastal city, creating a turbocharged economy and a go-go housing market to match. Seattle rebounded more quickly from the past recession than most other places. But home prices rose rapidly as more well-paid workers flocked to the area and many longtime residents were priced out. Median list prices shot up 12.1 percent just in the past year, to a median $550,050 in the Seattle metro area as of Oct. 1, according to the most recent realtor.com data available. That's much higher price growth than the 7.3 percent rise nationally.

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