What Amazon’s HQ2 Arrival Means for DC and NYC
Amazon’s announcement to build headquarters in both Queens and Arlington has already impacted these markets. New home supply in both of these markets is tight, and speculative activity will likely increase. What it means for these two communities is an introduction of about 25,000 high paying tech jobs each, and a total investment of about $5.0 billion.
For Queens and Arlington, this translates into demand for more than 15,000 new homes in each community. Housing supply will be gradual to adjust in these urban areas, but our feeling is that Amazon has already received commitments from both cities in terms of infrastructural improvements and housing supply. Still, the short-term ramifications in terms of rising wage pressures, rising rent and home prices and more pressures on existing infrastructure will be significant.
Not surprisingly, these two communities benefit from ongoing investments in mass transit and airports. LaGuardia Airport is a mess of jumbled construction – possibly in anticipation of Amazon’s entry. But JFK and Newark can temporarily handle the overload. Arlington relies on Reagan and Dulles airports. Access from airports and mass transit to both communities is (or will be) fairly convenient – a priority for Amazon, and probably the main reason that competing communities such as Austin and Raleigh were rejected.
Amazon’s future remains bright, as it has many venues for growth. Most recently, Amazon has invested in factory-built housing. New homes largely constructed in parts on a factory floor, then shipped and assembled on site. We think Amazon will double down on this investment, seeking to control the destination market for many of its home products.
All of this means a big adjustment to our housing model for the New York-Newark-Jersey City, NY-NJ-PA CBSA and the Washington-Arlington-Alexandria, DC-VA-MD-WV CBSA. These modeled adjustments will be reflected in our 4th quarter publication of The Residential Economic Report.
Contact your local Metrostudy Director of Business development for more information on how to access to these reports.