National Landing HQ2:
What Does It Mean for You?
February 2019 Update
This week, Amazon announced it’s halting plans for its other HQ2 site in Queens, NY, due to a lack of support from local government officials and the community. Amazon officials insist that pulling out of the Long Island City location does NOT mean they’re searching for a new HQ2 site. Its expansion plans will proceed focused on the National Landing and Nashville hub locations. Amazon’s 17 other hubs will absorb the remaining jobs. However, local officials are not ruling out the possibility of more jobs at Amazon’s Crystal City location. Stephanie Landrum, President and CEO of the Alexandria Economic Development Partnership, said the state’s package was structured to allow for the possibility of up to 37,500 local Amazon jobs, an additional 50% on top of the planned 25,000. Of course, more area jobs means only good news for home values in our region.
In case you missed it (ha!), South Arlington’s Crystal City neighborhood and Alexandria’s Potomac Yard have been chosen as one of two locations for the second headquarters of internet giant, Amazon. This 150-acre site that spans Arlington and Alexandria, which is being rebranded as National Landing, is a mix of vacant buildings and developable land. National Landing HQ2 is connected by a healthy transportation network, including four rail stations, as well as walking and biking paths.
So here’s what everyone is asking:
What does a National Landing HQ2 mean for our area?
In short, money, jobs, and people… plus, a rise in local home values.
Amazon has promised a whopping 25,000 jobs and a $2.5 billion (yes, with a “b”) construction investment for National Landing. Amazon expects to occupy four million square feet of energy-efficient office space in National Landing, with possible expansion to eight million square feet in the years ahead. Local commercial real estate firm JBG Smith is the lead on the Amazon efforts.
The idea of 25,000 new jobs is making many locals wary of an even more congested Arlington-Alexandria region. However, 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.
To manage this growth, the local jurisdictions will invest $570 million in transportation projects, including rail, transit facilities, multi-modal streets, and technology projects. The state of Virginia will invest up to $195 million to improve mobility in the region, including additional Metro entrances in this area. Other projects include improvements to Route 1, a pedestrian bridge from Crystal City to Reagan National Airport, and a transit expansion supporting this area. The region is intensifying its efforts to increase housing capacity and making more investments in affordable housing. For example, with the projected $150 million Amazon revenue, Arlington and Alexandria will both fund efforts which will secure up to 2,400 affordable and workforce units.
What About Home Values?
Without a doubt, a National Landing HQ2 means an increase in our region’s already high housing costs. The potential new Amazon workers, will create additional demand for local housing, thereby driving up the region’s housing values.
However, while home prices in Amazon’s HQ1 in Seattle have jumped by nearly 73% in the last five years (and rents by 31%) experts do not anticipate the same drastic increase here in our region. Given that DC is already an established housing market with a strong infrastructure, home prices will increase, but not at the rate they have in Seattle. In a recent study by George Mason University’s Fuller Institute, researchers found that “HQ2 would increase the demand for housing in the Washington region. However, this demand would be relatively dispersed in the region and occur gradually, allowing jurisdictions to plan for the increase or adjust their current plans as needed.” The greatest increases, not surprisingly, are expected to be in Arlington and Alexandria. Amazon’s arrival is likely to push lower-income families farther out from the District to find more affordable housing options.
Have We Seen an Early Housing Impact?
Yes and no. Right now, we are seeing a lot of buyers coming out of the woodwork looking to buy in early 2019 and the majority are citing Amazon as a reason they are entering the market. Future buyers are worried about the impact of rising rents as landlords and large apartment complexes capitalize on the HQ2 Buzz. These buyers are also worried about home values increasing locally and increased competition for already desirable close-in housing.
Let’s Not Forget About Virginia Tech!
As part of the state’s promise to Amazon that it would double the number of graduates with degrees in computer science and related fields, Virginia Tech has announced plans to open “Innovation Campus” in the nearby Potomac Yards neighborhood (less than two miles from Amazon’s new home). This one million square-foot campus, estimated to cost $1 billion, will focus on graduate-level education, bringing together academica, research, and industry. Both students and faculty will live and work on the campus. Virginia Tech’s goal is for Innovation Campus to be a “collaborative magnet for leading tech talent, research, and education” with programs focused on computer science and software engineering. The campus will include 300,000 square feet of academic space and R&D facilities, 250,000 square feet for partner startups and corporate facilities, student and faculty housing, plus retail and support spaces.
This new state effort will help ensure that Amazon has a strong pipeline of tech talent for the 25,000 jobs it will bring to the area. The state is also spending $375 million to develop new master’s programs in computer science and related fields at the Arlington campus of George Mason University.
The Bottom Line
Overall, Amazon’s arrival should mean great things for our region. Of course, some drawbacks are to be expected as well. While we anticipate some growing pains, we are confident that in the long run, the National Landing HQ2 will increase housing values in our region and bring many other positive benefits.
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Curious how 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.