Yes, The Amazon HQ2 Project Would Increase Your Rent
Yesterday, it was revealed that Columbus was one of the top 20 finalist cities to make the short list of site locations where Amazon may build its new $5 billion HQ2 project. We don’t know when the final announcement will be made as to which city will be selected, but we do know that any city it lands in will be drastically changed as a result.
Last October, ApartmentList.com published a research article that projected how rental rates could be impacted by the project on a city-by-city basis. That article was updated yesterday to reflect the newest announcement.
“All metros studied will experience additional rent growth from the Amazon HQ2, but to differing extents, with smaller metros generally experiencing greater rent growth,” stated Sydney Bennet, Senior Research Associate at Apartment List. “We project that Raleigh, N.C., Columbus, Ohio, Indianapolis, Pittsburgh and Nashville, Tenn., will feel the rent increase the most, with additional annual rent growth between 1.2 percent and 2.0 percent.”
The average annual rent growth in Columbus is already 2.8 percent (which is on the lower end of the spectrum when compared to other Amazon HQ2 finalist cities), so another 1.5 percent annual rent increase due to the development would put us on par with cities like Denver and Austin, which already see nearly a 5 percent annual increase in rental pricing.
“Being selected would be the biggest news in decades, but there would be challenges — the biggest is workforce,” stated Bill Lafayette, Founder and Owner of Regionomics, a Columbus-based economic consulting agency. “Other challenges would be the added traffic, depending on where the development were to locate, and housing. We already have housing affordability problems, and those would worsen.”
Of course, the addition of 50,000 high paying tech sector jobs to the economy would help increase incomes to compensate for an increase in rental rates. And residents who currently own homes in the region would most likely see this news as positive.
“While homeowners may benefit from increased property values, renters and those hoping to purchase homes will feel the impact more severely,” said Bennet. “With rent growth outpacing wage growth, inclusive wage policies and more construction of affordable housing can help mitigate the impacts the new headquarters.”