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.
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