Study Predicts the 'Amazon Effect' of HQ2 on Rents

Spoiler alert: the rent will go up in whatever city Amazon chooses for the site of its second headquarters.
April 26, 2018, 11am PDT | James Brasuell | @CasualBrasuell
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Aaron Terrazas shares news of a new report by Zillow Research that projects the effect of Amazon HQ2 site selection on rents.

Amazon is expected to make its selection of the site of a second headquarters (HQ2) later this year, in a "sweepstakes of sorts that brings the prize, opportunity, and potential pain, of more than 50,000 highly paid jobs to the winning region."

But ay, there's a rub. "[W]ith those new jobs will likely come new residents, which in turn will boost demand for housing and potentially push up housing costs, particularly rents," according to Terrazas. The caution mimics other messages potentially lost in the media blitz of process of the site selection process. Now, however, Zillow research has a study that predicts exactly how much rents will go up in each of the remaining cities vying for Amazon's affections. Terrazas explains:

Extrapolating from the experience of how local rents have responded to the arrival of workers in recent years across each of the 17 metro markets that Amazon is considering for its second headquarters, we estimate that Nashville, Denver and Los Angeles could experience the largest boost to local rents on top of that already anticipated. Toronto, Chicago and Indianapolis could see the most modest extra bumps to annual rent appreciation.

The article includes more details, a helpful infographic, more analysis, and more details about the study's methodology. The Zillow Research study has not gone unnoticed among mainstream media sites. The New York Times and the Seattle Times, for instance, picked up news of the study.

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Published on Wednesday, April 25, 2018 in Zillow Research
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