The Amazon ‘Empire’ continues to expand and its influence is rapidly expanding to unexpected areas far beyond the digital market and retail world. Recently, the company has been noted for their influence on the housing market.
Housing market prices recently shot up in several neighborhoods north of D.C. after Amazon announced it would be building its new headquarters in Northern Virginia.
Amazon is referring to their new headquarters, or HQ2, as their “National Landing” as they get closer to the nation’s capital of Washington, D.C. Though the company and several Virginia property owners are excited by the company’s arrival to the area, several low-income neighborhoods and community groups have concerns about the effect HQ2 will have on property taxes and housing costs.
Real estate spectators look at the effect Amazon had in Seattle and worry that housing costs could rise as high as 50 or even 80% in the area. Though many market experts note the differences of VA real estate compared to Seattle, several first-time home buyers have expressed their fear and concerns about the company moving into the area.
While real estate speculation is in a frenzy and homeowners try to get a grasp on how the new headquarters will affect their living costs, other community groups have expressed major concerns about the influence on diversity and equality in the area. Amazon estimates that its new headquarters will be bringing in 25,000 employees to the Arlington-Crystal City area.
The concerns about the expansion are that it will eliminate the economic and racial diversity within the county. Lower-wage workers may be pushed further north in Virginia and cause even longer commute times for these workers to get to their jobs. The benefits of the Amazon tech campuses have largely been associated with the richer members of the communities and have displaced working-class groups.
The company also announced that it will be creating another campus in Long Island City in Queens. This follows Google’s announcement that their company would be expanding further into New York City.
Another 25,000 jobs are expected to be on the new Amazon campus as well. Queens has long been noted for its housing affordability when compared to the Manhattan or Brooklyn real estate prices, but the introduction of a tech campus to the area may increase those housing costs and further feed into the housing affordability aftermath associated with Amazon’s expansion.
Long Island City is also a transit-rich area and concerns have also been expressed about how 25,000 more jobs might contribute to already congested commutes in the area.
While both locations will provide Amazon with access to two major cities, Washington D.C. and New York City, the company will inevitably raise house costs wherever it lands. Though the company stated that it is committed to maintaining housing affordability, the introduction of tech campuses will ultimately impact the rent market and gentrification in the neighborhoods they land in.
Most notably shown in Amazon’s Seattle and California location, when tech jobs come the working-class immigrant neighborhoods get pushed out of their neighborhoods as property owners give rental preference to those working at Amazon and raise rents to get the most money out of the rental properties.
The number one rule of real estate has always been and remains location, location, location. Only time will tell the true impact Amazon tech hubs will have on the communities they expand to, but the history of the company shows that property costs will most likely rise in Northern Virginia and Long Island City.