Amazon, the e-commerce giant led by Jeff Bezos, announced at the beginning of this year that it has whittled the 238 cities that applied to bring the new Amazon headquarters to their zip code, down to 20 cities including Boston. By the end of 2018, Amazon will finally announce a location for its second headquarters, bringing the tech giant’s massive search for “HQ2” to a close. Top runners within that shortened list of 20 include several Northeast hubs where transportation, schools, and infrastructure could support this growing market. What potential impact does this long awaited decision have on the economy and housing market of the yet-to-be-named city? Let’s take a closer look.
When Amazon first settled in Seattle, Washington in 1994, it transformed the city by employing over 40,000 tech workers and pumping an estimated $38 billion into the city. In what is now being called the “Amazon Effect,” the housing market in Seattle has seen a massive surge with needs not being met in the areas of workforce housing. The Seattle Times has reported that home prices in this area have increased by 76% causing an utter lack of housing that is affordable for the large company.
The impact on the future HQ2 city will be similar in that Amazon is planning to inject $5 billion into the economy and create more than 50,000 jobs. According to the online site Bisnow, the jump in housing needs and lack of affordability could be faster and even more significant in the city that wins Amazon’s second headquarters due to the unprecedented number of employees it hopes to hire.
One of the solutions to the strain on the housing market will be getting creative in designing and building affordable workforce housing in the areas surrounding Amazon’s HQ2 pick. Other tech companies like Google, Facebook, and LinkedIn have come up with some creative ways to meet the demands of housing while still remaining within budget for workers. In an attempt to remedy the demand for workforce housing, Google built modular housing for 300 of its employees. Facebook tackled the problem by pledging to develop 1,500 units in Silicon Valley’s Menlo Park area — home to the Facebook campus, of which 15% will be designated workforce housing. LinkedIn, on the other hand, invested $10M to provide short-term loans to affordable housing developers to incentivize them to quickly purchase property and compete with other developments. What solutions to the demand for workforce housing will Boston come up with if chosen as the new Amazon headquarters? At the Executive Multi-Family Housing Conference in Las Vegas, Nevada, DMS Design Principal and Owner, Dan Skolski, spoke about the need for modular housing in the age of the “Amazon Effect.” DMS design specializes in workforce housing and modular housing and will be keeping a close watch on the developments and what Amazon’s announcement could mean for our region’s housing market.