Amazon Effect: HQ2 Would Have the Greatest Impact on Rental Inventory in Raleigh and Columbus

  • A new analysis from HotPads shows how many rental units each U.S. metro on Amazon’s HQ2 shortlist would need to build to meet increased demand and keep rent growth steady.
  • Raleigh, N.C., would need to build the most rental units relative to current levels to keep rent growth steady.
  • Columbus, Ohio and Nashville, Tenn., would also need to build a high number of rental units relative to current levels to keep rent growth steady.
  • The New York metro would need to build the fewest additional rental units relative to current levels to keep rent growth steady.

For those who’ve (somehow) missed the memo, last year Amazon announced plans to create a second headquarters outside its current home base in Seattle, dubbed HQ2. In January of this year, the company announced a 20-city shortlist for HQ2. Since then, a year after the initial announcement, mum’s the word on Amazon’s final decision.

Like the rest of the country, the HotPads crew has spent the past year enamored by the HQ2 selection process. Because we’re kind of nerdy about the rental market, we wanted to know how likely Amazon HQ2 employees are to rent their home based on what they do for a living – and with that, how many more rental units each market would need to house that many renters without rent growth speeding up.

Using U.S. Census Bureau data and our rental inventory data, we found that HQ2 would have the greatest impact on rental inventory in Raleigh, Columbus and Nashville.

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 is about 2,520 additional rental units annually. Among the U.S. metros still vying for Amazon’s second headquarters, Raleigh is the smallest still under consideration, with about 10,800 available rental units typically 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.

On the other end, the New York metro would see the smallest impact on available rental inventory from HQ2. The New York City area typically has about 213,200 available rentals on the market each year. With HQ2, the metro would need to increase its supply of available rental units by just 1.5 percent annually to keep rent growth steady.

To see how the numbers break down for your HQ2 frontrunner, check out the table below:

Note: New York metro data includes two finalist cities: Newark and New York City. Washington, D.C. metro data includes three finalists: Montgomery County, Northern Virginia and Washington, D.C. Data are not available for the Toronto metro.