For folks that live in the quiet Arlington, VA area, the forthcoming Amazon HQ2 (second headquarters) may be a hot topic of discussion. Amazon originally intended to split its headquarters between Long Island City, NY and Arlington, before focusing solely on Virginia. This decision pleased area leaders and politicians but may have left residents (and potential residents) wondering how this massive addition will impact the housing and rental markets.
Will the Northern Virginia area be the next Seattle? In case you don't recall, that's where Amazon first opened its original headquarters, spiking rental prices by more than 35 percent, making Seattle the third most expensive housing market in America.
Researchers have predicted that the second headquarters may, in fact, have an effect on the rental market, similar to the changes that occurred in Seattle.
Surprisingly, Crystal City, the area where Amazon plans its HQ2 expansion, has yet to see an increase in rental prices. This may be due to the fact that Amazon hasn't broken ground on their new building yet or because of other changes in the market.
Over the last year (November 2018 to November 2019), rental prices in the Arlington area remained fairly steady for studio, one-bedroom and two-bedroom apartments.
Prices fluctuated a little more in Crystal City, but in many cases actually decreased from this time last year.
Here's what November 2019 rent prices look like in Crystal City:
In order to gauge the overall market in the areas that may be impacted by the new Amazon headquarters, we looked at averages in the same overall time frame for the Arlington area.
The averages were slightly less than in Crystal City for November 2019 rent prices.
Crystal City, Arlington and surrounding areas may all be desirable for renters, despite being above the national average. They offer a thorough public transit infrastructure for workers facing commutes, labor markets are diverse and the airport is close by.
Depending on work and family limitations, renters could potentially move to one of the alternative areas, like Clarendon or Rosslyn (both of which are commuting distance) if prices happen to go up over the next few years.
Renters looking for a studio, one- or two-bedroom apartment will find the best rental price in Arlington, outside of the Crystal City area. But they may still benefit from living closer to Crystal City and D.C. since they're both a closer commute, new jobs will open up in the area and they can take advantage of the public transit system.
With the development of Amazon's HQ2, there's the potential for rental price increases as people move to the are seeking employment or transfer within the company. Renters who already live here and don't have rent-controlled leases may feel the pressure of these changes the most.
However, there's always the option of negotiating rental prices and signing on for longer leases before HQ2 has the chance to change the market in Crystal City. Implementing these strategies may help renters avoid getting forced out.
Researchers have taken a close look at the increase in rental prices and home values that occurred in Seattle and applied the same factors to Arlington. They're hoping to see a correlation, but the stability of each housing market is different which may drastically alter the impact of a large company moving in.
How the housing and rental market will react to a change like this one will often depend on how flexible the market was to begin with, rather than just the number of people moving in at any particular time.
The influx of more than 25,000 Amazon employees is bound to shake things up a bit. However, research suggests that since Arlington's economy is healthy and prices are trending upward at a natural pace, this should be enough to absorb the changes.
Another reason that the impact may not be as severe is that Arlington is a better area for commuters than Seattle. When the Amazon headquarters first opened in Seattle, it happened suddenly. There was little time to prepare, and Seattle's transit infrastructure wasn't conducive to commuter living.
Arlington, on the other hand, is very commuter-friendly. This eliminates the need to live in very close proximity to the office building itself and opens up the option of living in one of the many surrounding areas and suburbs.
Crystal City's bus and train transit options make it incredibly easy to commute in and out of the city throughout the week.
Naturally, rental prices will continue to trend upward with or without the presence of companies like Amazon, if the area is popular enough. These are desirable areas that have experienced sustainable growth, but a significant spike is not expected anytime soon.
Renters can breathe a bit easier knowing that a 35 percent uptick in rental prices isn't likely in Crystal City. However, planning out the near future (before any new or major developments are complete) can't hurt either.
Claire Tak is a writer who previously served as head of content and chief editor for FinTech companies in New York and San Francisco. Her work has appeared on FOX Business, Bloomberg and Forbes. She writes regularly about travel, money and being a good human. Traveling and snowboarding are her two favorite things to do.