Amazon’s announcement of a new headquarters in Virginia led to outrage by some and praise by others. HQ2 would generate jobs and revenue in Northern Virginia, yet economists predicted the headquarters would put 14 people into homelessness per year.
Residential rental costs and housing prices increase where big tech companies are located.
HQ2 led to a real estate boom in the area, with depleting inventory and rising prices. Home prices in April rose 18% year-over-year, with the number of available units falling 42%. Homeowners are holding on to their properties and turning to trading platforms to invest in Amazon.
Homeowners plan to sell their homes when prices rise after Amazon is settled in the area.
Amazon decided to donate $3 million to the Arlington Community Foundation and an additional $5 million to Plymouth Housing. The company also plans to match employee contributions to 20 homeless groups over the next three months.
Amazon claims that the company is not donating due to backlash and that the company has donated over $40 million to homeless charities. Arlington County has lost 90% of market affordable inventory and the trend is expected to get worse.
The company asserts that they will be hiring locals to work at the new headquarters, so the impact on local housing will be minimal.
Amazon plans to grow gradually, with the company hiring 400 people in 2019. The company also plans to hire 30% of its HQ2 workforce living outside of the state. The workers from outside of the state will not have an impact on local real estate costs.
The announcement of HQ1 plans led to a 17.3% in real estate prices in Arlington at a time when the median housing price rose just 5.5%.
Realtor.com mentions that people who already own their homes are in a unique position, but the site also states that those that do not own homes will already face challenges. Renters are likely to increase in numbers as housing prices rise. Rent prices are expected to rise as a result.
Jeff Bezos, Amazon’s CEO, has also created the Day One Fund, which sets aside $2 billion to fight homelessness in the United States. The fund handed over $97.5 million in grants to help fight against homelessness in 2018 alone.
Affordable housing is not an issue that’s unique to Arlington. The issue of affordable housing is occurring across the country, with many non-profit companies asking the federal government to get serious about the problem.