This week Amazon dropped some surprising news that not only were they going to enter two new locations with their HQ2 investment, one of those areas turns out to be Long Island, NY — home to an already top priced rental market. The choice many are calling unlikely has some surprising data to back up Amazon’s decision to head to Staten Island.
Partnering in the dual HQ2 decision is the city area of DC, which will share the nearly 50,000 new jobs the investment will bring. The split and resulting decreased infrastructure requirements has not only opened up new areas as feasible options but also enables Amazon the chance to create two thriving markets while also tapping into the resources and talent each unique location has to offer.
Looking back to some of the statistics from Amazon’s first HQ location, it would seem each area will need to brace for substantial change. “Whenever new business enters an area, demand for housing is almost always likely to go up along with the rate residents are willing to pay,” shares CEO of Western Rim Properties Marcus Hiles who has over 30 decades of experience in the rental market.
A recent article by Forbes focuses in on this top question on the minds of local residents in NYC — how will this influx of new business impact Long Island’s housing market? The article cites the home prices in Seattle jumped more than 35% after Amazon entered the area. And that’s not the only impact the online giant had on the area’s economy, since 2013 home prices are reported to have risen 73% while rents were up 31%.
However the already over saturated populations in NYC and vast infrastructure that exists or is in development in the area presents a unique opportunity for Amazon. Early on the organization had made many evaluations to understand where the best investment would be location wise. One of those studies focused in on the necessary build up a location would require for the company to move in with tens of thousands of new employees brought with it. Online apartment network HotPads provided its data on the matter which did find many of the locations in the Amazon HQ2 shortlist weren’t fully equipped to handle the new growth right out of the gate and would require considerable ramp up to meet the needs of the new business investment.
New York was was a unique scenario and was found to actually require the fewest additional housing units as HotPads shared, “New York would require the fewest additions to rental stock — just a 1% boost if all 50,000 of HQ2’s jobs landed there.” And with the decision to split the HQ2 investment among two locations that means new development in the area will be even less of a burden on the market.
The change Amazon’s new HQ2 locations will make is certain to have a big impact on each area however it is a clear that the decision to split the venture in two, while tapping into city locations like DC and Long Island, will be a sustainable move that offers big returns for the billion-dollar business.