Earlier this year Amazon announced it was looking for a home for its second headquarters (HQ2). 238 cities placed bids, and 20 cities were the lucky finalists.[i] The winning bids included huge tax incentives and potential locations for a new Amazon campus.[ii] Now, nine months on, Amazon has yet to announce the location for their new HQ2. However, a few days ago, Amazon executives made follow-up visits to New York City, Newark, Miami, and D.C.[iii] While we all patiently wait for their announcement, real-estate investors are getting ready to buy up large amounts of property in whichever city is selected in anticipation of a jump in property values.[iv]
Needless to say, the real-estate industry in the city Amazon chooses to host its HQ2 will dramatically change upon the announcement. Mr. Cooper, a home loan and mortgage company, finds that home prices could potentially increase by about 30% in some places.[v] Newark and Raleigh have the most to gain should they be chosen for HQ2: property values in both places would jump almost 30%. This is compared to DC, LA, and Boston who would see an increase in property values of less than 4%.[vi] They would still see an increase, just not a huge one. Either way, the city chosen will see gains, be it from increased jobs and employment and/or an increase in property value; in all honesty, though, this should not come as a surprise. According to estimates, the new HQ2 will bring 50,000 jobs and $5 billion in investments.[vii] Amazon’s headquarters in Seattle brought over 53,000 jobs to the city and added $38 billion to the local economy between 2010-2016.[viii] Moreover, “HQ2 is guaranteed to meet three criteria: tech job growth, tech job growth, and tech job growth” as Bryan Copley the co-founder of CityBldr stresses.[ix] In a world becoming increasingly tech-focused, the prospects of hosting a tech-giant has huge appeal.
Amazon is not new to growth and disruption – something that will inevitably happen in the location of the new HQ2. Thus, they are being strategic in their selection. Some sources postulate that Amazon will favor an urban city, which would allow for a campus to be placed in a built-up area near the city center,[x] while others believe that the suburbs of DC in Northern Virginia and Montgomery County, Maryland will be favored since Jeff Bezos has a home in DC and owns the Washington Post.[xi] People can speculate, but Amazon will ultimately make a decision based off of what makes the most economic sense. Unsurprisingly, Amazon has not reported how they are selecting the location of HQ2. However, some reports show that they have requested to see data on a variety of factors including local high school test scores in order to make their final decision.[xii]
Amazon has announced that a final decision will be released by the end of the year, which
leaves just over two months to conclude the process. No matter which of the 20 finalists Amazon picks, that city is sure to see economic growth and a population boom.