Amazon poised to hike prices substantially for New York, Virginia renters
FBN's Tracee Carrasco on Amazon's decision to split its second headquarters between Long Island City, New York and Crystal City, Virginia.
Residents of the two cities where Amazon has chosen to put its new headquarters may not be too happy with how the e-commerce giant’s presence may affect their rents.
New York and D.C. are already among the country’s most costly housing and rental markets, but according to online real estate site Zillow, rents in each city will rise even faster once Amazon moves in.
Even before the first reports that Amazon was considering both locations for its new headquarters surfaced, Zillow said it saw searches increase for accommodations in each city. As of Nov. 11, searches for Long Island City increased by 300 percent when compared with Oct. 1 – and were 60 percent higher in the days leading up to the first report.
For Arlington, traffic rose 74 percent in the days before the rumors were announced.
Here’s what residents should expect:
New York
While the average U.S. renter pays about $1,440 annually, the average New York metro-area renter pays $2,370.
The Amazon-effect will boost rent prices in the area by another 1.6 percent, Zillow forecasts.
Washington, D.C.
In the Washington Metro area, average rent prices hover near $2,130 – in Arlington, those prices are even higher at $2,746.
Washington-area residents can expect a more muted price increase thanks to Amazon, at 0.6 percent higher than the 0.5 percent that was already anticipated.
Seattle
The home of Amazon’s main headquarters – Seattle – is still grappling with the effects of rising housing costs, thanks in part to the 40,000 workers employed in the city by the company.
However, the effects on renters in the two new cities is expected to be less pronounced, particularly because the new workers will be split. Also, according to Zillow, New York and D.C. are better equipped for build outs than Seattle was.
Tight inventory in the near-term, however, could still pose challenges.
"Unfortunately, housing supply is tightly constrained by zoning regulations, so local cities won’t easily be able to meet the housing needs of new workers, and housing prices are likely to continue climbing further out of reach," Vanessa Brown Calder, a policy analyst at the Cato Institute, told FOX Business.