SAN FRANCISCO, Sept. 12, 2018 /PRNewswire/ -- Among
all U.S. cities on Amazon's HQ2 shortlist, Raleigh, N.C., would need to build the most
rental units each year to keep up with rental demand from Amazon's
second headquarters, according to a new HotPads®
analysisi.
To keep rent inflation at current levels, Raleigh would need to increase the number of
rental units available by about 23 percent each year, which equates
to building about 2,520 additional rental units annually.
Columbus, Ohio and Nashville, Tenn. follow Raleigh on the list of cities that need to
build the most rental units relative to current levels to
accommodate new demand and keep rent growth steady.
Amazon's second headquarters ("HQ2") is expected to bring 50,000
jobs to the chosen city, primarily in the management, software
development/engineering, legal, accounting and administrative
fieldsii. Based on the homeownership rate in the fields
Amazon is hiring for, HotPads estimated how many renters the new
headquarters would be expected to bring in each yeariii,
and how this influx of new renters would affect each metro's supply
of available rentals.
Among the U.S. metros still vying for Amazon's second
headquarters, Raleigh is one of
the more affordable rental markets still in the running. The median
rent in Raleigh is $1,470, up about 3.4 percent over the past year.
Population wise, Raleigh is the
smallest metro still under consideration for HQ2 and typically has
about 10,800 available rental units on the market each year.
If Amazon HQ2 went to Columbus,
rental supply would need to increase by 22.1 percent to keep rent
growth steady, which equates to building about 2,480 additional
rental units a year. Nashville
would need to increase its supply of available rental units by 15.2
percent a year, or 2,000 additional rental units. The median rent
in Columbus is $1,410 a month, and the median rent in
Nashville is $1,505 a month.
"An influx of new residents will inevitably influence the rental
market, particularly in smaller markets like Raleigh and Columbus," said Joshua
Clark, economist at HotPads. "Both Raleigh and Columbus have seen remarkable growth in recent
years, but if selected, they'll have to undergo the most dramatic
building boom to accommodate Amazon HQ2 and keep rent inflation at
current levels. However, finding available land has been a
recurring issue for both Amazon and housing developers in
Seattle – so areas with more
buildable space like Raleigh and
Columbus may have an advantage
when it comes to building for Amazon's future. No matter which city
is chosen for HQ2, planning in advance will be critical as
developers, city officials and renters adapt to a new normal that
includes a strong and ever-growing tech workforce."
Among the U.S. metros on Amazon's shortlist, the New York City metro would see the smallest
impact on available rental inventory from HQ2. New York City typically has about 213,200
available rentals on the market each year and would need to
increase its supply of available rental units by just 1.5 percent a
year to keep rent growth steady.
HotPads is a Zillow® Group-owned apartment and home search
platform for renters in urban areas across the United States. For more information on the
U.S. rental market, visit HotPads.com.
Metro
Name
|
Typical Number
of Rental Units
Available Each
Year
|
Additional
Rental
Units Needed
Each Year with
Amazon HQ2
|
Increase in
Rental
Units Needed
Each Year with
Amazon HQ2
|
Expected
Renter Rate for
Amazon HQ2
Employees
|
Current
Median
Rent
|
Current
Median Rent
Growth YoY
|
Raleigh,
NC
|
10,800
|
2,520
|
23.3%
|
37.8%
|
$1,470
|
3.4%
|
Columbus,
OH
|
11,200
|
2,480
|
22.1%
|
37.2%
|
$1,410
|
3.7%
|
Nashville-
Davidson--
Murfreesboro--
Franklin, TN
|
13,200
|
2,000
|
15.2%
|
30.0%
|
$1,505
|
2.5%
|
Pittsburgh,
PA
|
12,800
|
1,840
|
14.4%
|
27.6%
|
$1,095
|
2.0%
|
Indianapolis-
Carmel-
Anderson, IN
|
14,000
|
1,960
|
14.0%
|
29.4%
|
$1,235
|
3.5%
|
Austin-Round
Rock, TX
|
28,000
|
2,840
|
10.1%
|
42.6%
|
$1,735
|
1.4%
|
Seattle-
Tacoma-
Bellevue, WAiv
|
36,000
|
2,760
|
7.7%
|
41.4%
|
$2,230
|
4.3%
|
Denver-
Aurora-
Lakewood, CO
|
32,000
|
2,200
|
6.9%
|
33.0%
|
$2,100
|
3.7%
|
Philadelphia-
Camden-
Wilmington,
PA-NJ-DE-MD
|
44,400
|
2,080
|
4.7%
|
31.2%
|
$1,665
|
2.3%
|
Atlanta-
Sandy Springs-
Roswell, GA
|
54,000
|
2,440
|
4.5%
|
36.6%
|
$1,450
|
5.1%
|
Washington-
Arlington-
Alexandria, DC-
VA-MD-WV
Metropolitan
Division
|
61,600
|
2,600
|
4.2%
|
39.0%
|
$2,170
|
1.3%
|
Boston-
Cambridge-
Nashua, MA-
NH
|
65,600
|
2,720
|
4.1%
|
40.8%
|
$2,405
|
3.1%
|
Dallas-Fort
Worth-
Arlington, TX
|
62,000
|
2,480
|
4.0%
|
37.2%
|
$1,660
|
3.2%
|
Los Angeles-
Long Beach-
Anaheim, CA
|
97,600
|
3,520
|
3.6%
|
52.8%
|
$2,885
|
4.1%
|
Chicago-
Naperville-
Elgin, IL-IN-WI
|
91,200
|
2,600
|
2.9%
|
39.0%
|
$1,785
|
1.9%
|
Miami-Fort
Lauderdale-
West Palm
Beach, FL
|
104,000
|
2,920
|
2.8%
|
43.8%
|
$2,005
|
2.3%
|
New York-
Newark-Jersey
City, NY-NJ-PA
|
213,200
|
3,200
|
1.5%
|
48.0%
|
$2,360
|
1.0%
|
HotPads
HotPads is an efficient rental search platform for urban areas
across the United States, with
features designed for competitive markets such as map-based search,
real-time notifications and detailed information on landlords and
property managers that help renters spend less time searching and
more time feeling excited about their next home.
Launched in 2005, HotPads is based in San Francisco and is owned and operated by
Zillow Group, Inc. (NASDAQ: Z and ZG).
HotPads is a registered trademark of Zillow, Inc.
i For this analysis, HotPads used data from the U.S.
Census Bureau to estimate the number of renters that will move to
Amazon's second headquarters location, based on the renter rate for
the five job categories outlined in Amazon's HQ2 Request for
Proposal. HotPads then paired the Census data with its own
quarterly rental inventory data on the typical flow of new rental
listings – which includes new construction and existing rentals
that have been off-market for a year or more – to determine how
many available rental units each market will need in a year to
accommodate the expected number of new renters. For more
information about this methodology, email press@hotpads.com.
ii Per Amazon's HQ2 Request for Proposal
iii HotPads assumed a constant rate of hiring for all job
types over 7.5 years – approximately the amount of time it took for
Amazon's Seattle headquarters to
reach its current capacity.
iv HotPads also analyzed what the impact would be on the
Seattle metro area's supply of
available rental units if Amazon doubled the number of employees in
its current headquarters instead of opening HQ2.
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SOURCE HotPads