The supply of new apartments coming online in the DC area could mean that the arrival of Amazon wouldn't have a substantial effect on area rents.
An analysis by Zillow reveals that median rents in the DC area would rise $138 more a month if Amazon picked the region for its second headquarters than if the online retail behemoth didn't come to the area. The rent increase would occur over the ten years during which Amazon is expected to bring approximately 50,000 jobs to the area.
"Smaller markets and/or markets with a record of less responsive (or “elastic,” in economist-speak) housing supply should expect a larger increase in rent growth," the analysis stated. "Bigger markets and/or those with a history of rapidly expanding the local housing supply should expect a smaller impact."
The DC region falls into the latter category. A recent report from Delta Associates on the region's Class A apartment class revealed that while renters are leasing units about as quickly as they come online the pipeline of new apartments is significant. There are approximately 37,000 new apartments in the 36-month pipeline for the region, with 12,300 slated for delivery in the coming 12 months.
Other cities on Amazon's long shortlist will see a significant rent bump. The New York Times reports that if Amazon chooses Nashville, the southern city could see rents jump $400 a month as a result of the project.
- A Big Bet That Amazon is Coming to Crystal City.
- Is the DC Area Rental Market Ideally Positioned to Accommodate Amazon?
This article originally published at http://dc.urbanturf.com/articles/blog/the-138-a-month-amazon-bump-in-the-dc-area/13900
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