As the twenty locales on Amazon’s shortlist for a second headquarters wait with bated breath for news of a selection, many have speculated how the arrival of the economic behemoth would affect the housing market. Now, a new HotPads analysis has quantified what the selected city would need to do to keep its rental market stable.
If Amazon selects any of the three local jurisdictions that are on the finalist list, the DC area would need to deliver an additional 2,600 apartments to the market each year to meet demand and keep rents growing at their current pace. The additional 2,600 units would be a 4.2 percent increase over what is currently on the market. The study expects that 39 percent of employees brought by Amazon would be renters.
The DC area already has a robust apartment development pipeline, with 37,340 units expected to deliver in the next three years. Delta Associates’ quarterly report estimates that 13,100 apartments are slated to deliver between this past June and June 2019; meanwhile, another 10,283 apartments are expected to deliver in the 12 months ending in June 2020. By those measures, the DC area seems well-prepared for an Amazon-sized influx of renters should development maintain or exceed its current pace. Although apartment absorption has dipped somewhat recently, the arrival of an Amazon campus will undoubtedly push absorption back above 10,000 units annually.
The HotPads analysis assumes that HQ2 will bring 50,000 jobs in the fields of management/administration, legal, accounting, and software development/engineering. Based on the homeownership rates associated with those fields, and assuming that the new jobs will be added at a steady pace over 7.5 years, HotPads deduced the number of new renters that will arrive annually.