DC area HQ2

A DC Area HQ2: What Does It Mean for You?

September 7, 2018 | Inside Washington {Metro} | By: The Goodhart Group

Three Washington, DC area jurisdictions are on the short-list of 20 possible locations for Amazon.com’s second headquarters location – AKA “HQ2.” The District, Montgomery County, and Northern Virginia all have highly coveted spots on Amazon’s list. The New York Times reports that Amazon is likely to whittle this list down even further as soon as this month.

What’s at Stake?

Amazon has promised up to a whopping 50,000 jobs and a $5 billion (yes, with a “b”) construction investment for the locale that is the ultimate choice. Such an infusion of jobs and infrastructure funding is a dream come true for any jurisdiction.

A major factor in Amazon’s decision is the incentives these jurisdictions offer. For example, in an effort to win the bid, shortly after Amazon named Montgomery County a finalist, Maryland adopted a staggering $8.5 billion tax incentive and transportation improvement package for Amazon. The District has offered Amazon tax breaks on both its property and on its earnings, as well as a brand new employee training facility (already dubbed “Amazon University”). We don’t know much about the what contenders are offering since in most cases, private groups are developing the bids — and they don’t have to share the details.

The DC area has some distinct advantages in the HQ2 competition.

The region’s highly educated workforce is very appealing to Amazon. Another strong factor in DC’s favor is its strong public transportation, proximity to three airports, and its network of roads. Experts agree that Northern Virginia, specifically near “Data Center Alley” by Dulles Airport, is especially attractive to Amazon since approximately 70% of global internet traffic flows through this area. Coincidentally, Amazon recently moved its cloud service to this general area. Also nearby is the site where Amazon has plans for a 600,000-square-foot data-center…

So what does a DC area HQ2 mean for you as a local resident?

While 50,000 new jobs may make you fear an even more crowded DC region, keep in mind that Amazon will add these posts over a ten-year period. Additionally, many of these jobs will be filled by people already living in the area. So the influx of new residents, while significant, is not as dramatic as it sounds.

Without a doubt, a DC area HQ2 will mean an increase in our region’s already high housing costs. The potential new Amazon workers, most of whom will be college educated, will certainly create additional demand for local housing and drive up the region’s housing values. Rents are also likely to rise. Zillow.com reports that rent appreciation in DC would be around six-tenths of a percentage of a point each year that Amazon hires.

If you’re a first-time home buyer or are looking to make a purchase soon, now may be a great time to get your foot in the door. Prices are moderate now but would spike with a move here by Amazon.

If you’re a local property owner, a “wait and see” attitude might pay off in the short-term. However, if Amazon does not choose the DC area, you may have missed an opportunity to sell. Concerns of interest rates rising could negatively affect home prices in the long run.

Curious how a DC area HQ2 could affect your home’s value or change your neighborhood? Give us a call or send us an email to talk it through. We are always happy to chat about anything related to your home, even if you’re not planning a move.

Want more local insights? Be sure you’re getting our weekly blog roundup by signing up below.

Leave a Reply

Your email address will not be published. Required fields are marked *