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Amazon HQ2: How much will rent increase in New York, Washington?

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apartment for rent
Amazon’s second
headquarters could drive up rental costs in New York and
Washington, DC.

Justin Sullivan/Getty
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  • Amazon is

    reportedly
    considering splitting its new headquarters,
    HQ2,
    between neighborhoods in Queens, New York, and Arlington,
    Virginia.
  • An analysis conducted by Zillow in April found that if
    the new campus were built entirely in New York, then annual
    rents in the area could be as much as $204 higher than Zillow’s
    estimates for rents without the new offices.
  • Zillow’s base case called for a 1% decrease in New
    York’s median rent of $2,401 for 2019. When accounting for the
    so-called Amazon Effect, which would most likely be diluted if
    Amazon were to split its new headquarters between two cities,
    it predicted that rents would decrease by only 0.2%.
  • In the Washington, DC, area, where Arlington is
    located, Zillow predicted that Amazon‘s
    headquarters could cause rents to rise by 1.1%, more than
    double its projected rate without a new headquarters.

Renters in New York City and the Washington, DC, area could soon
be paying more in housing costs if Amazon splits its new
headquarters between the two cities.

Amazon is said to be in the
late stages of negotiations
to build campuses in the Long
Island City neighborhood of Queens, New York, and the Crystal
City neighborhood in Arlington, Virginia, just outside
Washington,
The New York Times reported
on Monday evening.

An analysis conducted in April by Zillow
found that renters’ costs could increase by more than $200
annually in the two cities relative to the real-estate site’s
base cases if Amazon were to set up in them.

Zillow’s forecast was based on the assumption that Amazon would
build a single campus for its new headquarters, meaning that
splitting the headquarters between the two cities could lessen
the impact to each city’s rental costs.

Zillow projected that the new campus would increase rents in New
York by 0.8 percentage points, equating to a 0.2% annual decrease
instead of a 1% decrease that Zillow anticipated without the new
headquarters. That would translate into about $17 more monthly,
or $204 annually, given New York’s median monthly rent of $2,401.


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In the Washington, DC, area, Zillow found that Amazon’s
headquarters, if set up entirely in Arlington, could cause rents
to rise by 1.1%, more than twice as fast as the 0.5% increase
projected without a new Amazon campus.

That would translate into about $24 more monthly, or $288
annually, for those paying the city’s median rent of $2,146.

The increases in rental costs would kick off next year, assuming
Amazon starts hiring for its second headquarters in 2019,
according to Zillow.

More on Amazon’s HQ2 project:

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