The state of Georgia has joined in something of a nationwide frenzy over Amazon.
The Seattle-based internet giant is looking to build a second headquarters and 238 applicants — from major metro areas like Atlanta, Boston and New York to smaller cities like Austin, Denver and Raleigh — have lined up, offering to throw a lot of taxpayer money at the company.
Whether you consider that corporate welfare or pump-priming, economists agree on this: The arrival of a huge, talented, ambitious, well-compensated workforce would pour money into and through a local economy.
But one thing not discussed much is the impact those 50,000 Amazon workers (along with dependents and an influx of employees in related industries) would have on the region’s infrastructure, especially the housing.
For homeowners, the upshot is generally good – at least on the surface.
Home prices in metro Atlanta would rise even faster than they’ve been rising, according to a Re/Max analysis of Amazon’s possible impact on the region, put together for the Journal-Constitution. “We anticipate a growing and robust demand for housing that will push prices higher across the entire greater Atlanta area,” the special report said.
That’s good if you anticipate selling your home, and even better if you aren’t trying to buy another home in the same area.
But, for first-time homebuyers in particular, an Amazon influx could intensify problems with affordability. Prices at the lower end of the market are already rising faster than wage increases.
While Amazon is by no means the sole cause of Seattle’s boom – Microsoft and Starbucks are also based there – it is seen as a key driver of growth and in the rise in property values and rents.
Seattle home prices have climbed 42 percent since 2013, according to Re/Max.
Atlanta and Seattle are very different. For example, the median home price in Atlanta is $220,000 compared to about $424,000 in Seattle, But the overall effect will be similar, according to the Re/Max analysis.
Atlanta home prices have been rising almost as fast as Seattle’s: Since 2013, the median home price is up 37 percent.
The last several years, Atlanta prices have been shoved skyward by a shortage of homes for sale. A surge of new demand will only make the imbalance worse, the analysis said.
So if Amazon comes to Atlanta, “Initially, the price increases will be modest,” the analysis said. “However, as Amazon continues to grow its presence in Atlanta, it’s possible we could see a similar pattern as Seattle.”
Rents would also rise.
A lot depends on where such an Amazon campus would be and how much housing is nearby.
In the absence of specifics, there are estimates from Apartment List, an online rental research and listing company.
Apartment List estimates that 50,000 Amazon workers would mean the addition of 66,250 “supplementary” workers. And all that affects housing.
Apartment List analyzed impacts on rent in 15 contending cities, said Sydney Bennet, research associate of Apartment List.
In some places, the change is less than 1 percent. In others, Amazon’s arrival could shove rents 7 percent higher per year, she said. “Although a 1 or 2 percent rent increase per year may not sound like a lot, the additional rent growth comes at a time when rents are already rising rapidly nationwide and half of renters are cost-burdened, spending 30 percent or more of their income on rent.”
The good news for Atlanta is that the impact here would be nowhere near as painful as in smaller metro areas, like Raleigh.
The company predicts Atlanta rents will increase 2.5 percent a year without Amazon and the addition of Amazon would add 0.7 percent a year to that increase, she said.
MYAJC.COM: REAL JOURNALISM. REAL LOCAL IMPACT.
AJC Business reporter Michael E. Kanell keeps you updated on the latest news about jobs, housing and consumer issues in metro Atlanta and beyond. You'll find more on myAJC.com, including these stories:
- Atlanta second-best for making a tech salary go further
- Despite data breach, Equifax likely to escape corporate death penalty
- Two Georgia counties on list where home buying makes most sense
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