Amazon’s pause in construction at its second headquarters in Arlington, Va., has not quelled enthusiasm for the expected economic boost to the region.
There is still a sense in the community that the incoming workers will increase traffic at local businesses, and some community leaders pointed to the critical economic benefits Arlington’s partnership with the company has already brought.
But amid broader economic uncertainty, a nationwide housing shortage lingers and leaves community members and leaders alike working to balance demand for higher-end homes and the need for affordable housing.
Amazon’s presence in Arlington has injected both opportunities and challenges into the local housing market and the larger economy, county board member Matt de Ferranti told The Hill.
The median sales price for a home in Arlington when Amazon announced the county’s winning bid sat at $561,000, according to data compiled by Virginia REALTORS.
Prices shot up by nearly 19 percent in 2019 alone. Since then, median prices in the already competitive market swelled to $624,000 in February.
“There’s overall concern about the increases in property values, and then there’s specific concerns about displacement of our lowest and moderate-income residents,” de Ferranti said, adding that the board worked hard to prevent displacement of the communities most vulnerable, especially during the coronavirus pandemic.
Still, Amazon’s arrival in National Landing has led to the approval of thousands of units in the last four years alone, de Ferranti said, which will add critical supply.
“So nationally, we’re having this debate over the supply of housing as a whole in addition to affordable housing. And so, I believe we need to be ready to allow more housing at the top end and at the market rate so that market demand is not so much greater than supply,” de Ferranti said.
Amazon is already filling jobs in the area
Arlington County has committed $23 million in performance incentives to the company, which said it plans to add 25,000 jobs in the area. And recently, the online retailer applied for its first round of incentives from the state.
An Amazon spokesperson told The Hill that the company will only submit and receive incentives under the agreement, and while 6,939 of the 8,000 jobs created thus far are eligible, Amazon expects around 8,000 employees to begin working at Met Park this summer.
The incentive had an average wage requirement of $156,852 for 2022, and jobs already filled exceed the requirement.
“It’s a fairly common practice for governments to incentivize companies to invest locally and create jobs in their communities,” Holly Sullivan, vice president of Amazon’s worldwide economic development, said in a statement to The Hill.
“So far, we’ve exceeded the projections laid out in the agreement we signed with Virginia in 2018 by creating and maintaining over 8,000 jobs at HQ2,” Sullivan said.
Arlington has yet to pay the company any incentives.
Worry about Amazon-related gentrification grows in Arlington
Meanwhile, rents nationwide recently saw their first year over year decline since the onset of the pandemic. Competition created partly by remote work and partly by consistent interest rate hikes from the Federal Reserve have pushed up rents consistently.
Currently, the average one-bedroom apartment in Arlington is listed at more than $2,100 per month, according to data from Rent.com. About 71 percent of apartments here are at or above that average rent.
And a northern Virginia coalition of workers, immigrants and people of color named For Us, Not Amazon wrote on Facebook in response to the construction pause that locals are left bearing the consequences, including raised rents.
“In the predominantly Latino neighborhood of Arlandria, Alexandria, not far from HQ2, tenants are seeing landlords raise their rates — while they’re still waiting on the hoped-for explosion of jobs,” they wrote.
Kris Gerrity, a community organizer with the group, told The Hill that the Housing Equity Fund announced by Amazon in 2021 to “preserve and create over 20,000 affordable homes” with a focus on Seattle, Nashville and the DMV leads to more questions than answers.
“It is clear that Amazon is primed to profit from these investments. This is a disconnect from Amazon’s messaging about affordable housing in our region, which Amazon claims it wants to address. Amazon wants to be part of the solution to the very problems it is creating,” Gerrity said.
Local real estate agents are ready for higher sales prices
Amazon has committed $992 million in loans and grants to preserve or create 6,200 affordable homes across the region, and the company said it is committed to the community.
“Our commitments to our neighbors, the community, and the region have also grown. We’ve invested more than $800 million in affordable housing through the Housing Equity Fund and over $37 million to nonprofits, community groups, public schools, and businesses,” Sullivan said.
For the Arlington area housing market generally, the major impact of the expected added workforce is on sellers’ expectations, Mike Webb, a Re/Max Allegiance associate broker with 32 years of real estate experience in the region, told The Hill.
“The sellers believe they should get a better price because Amazon is coming,” he said.
But in Webb’s experience, the region frequently sees this kind of population movement during shifting political tides.
“Arlington’s got 300,000 people already. The DMV has 6 million, 25,000 is just like a change in a presidency. It’s not really that big of a deal. Does it help? Yes, it does,” Webb continued.
“But what I have seen, yes, it’s helped. But it seems like the sellers have noticed it more than the buyers,” he said.