Yesterday was the last day for cities across the country to submit their bids to woo Amazon to build its second world headquarters, dubbed HQ2, in their region — a heated battle for the $5 billion investment and 50,000 new jobs promised by the e-commerce retail giant.
But not everyone will benefit from the addition of Amazon HQ2 to their urban area. A new report from Business Insider (using data from Apartment List) shows that rents could rise astronomically — around $200 or more per month — in whichever of the 15 cities most likely to become Amazon's new home ends up winning their bid.
For those who land one of the thousands of new white-collar jobs averaging $100,000 per year, the monthly budget may still work in their favor. But for everyone else, it could be a serious shock to the system.
Most-expensive cities like Boston, where median rent is already $1,969 per month with an existing annual rent increase of up to 0.8%, and San Jose, where median rent is already $2,691 per month with an existing annual rent increase of up to 1.6%, would be hardest hit — but a $200 per month rent increase in economically struggling cities like Detroit, where median rent is $998, would be tantamount to a nearly 20% rent increase almost overnight and could be catastrophic for existing city residents who don't get one of those coveted Amazon jobs.
Apartment List projected how Amazon's headquarters could change annual rent growth and then calculated the expected additional cost to renter households over a 10-year period, calculated from data that included existing vacancy rates, median income, and median rent, as well as housing development and rent increases from 2005 to 2015.
Since Amazon has taken over Seattle, where it employs over 30,000 workers, the city has become the fastest-growing in the US and the nation's largest company town, The Seattle Times reported. And its residents are now paying a premium to live there. Soon, we'll see which city will be able to commiserate.