The hottest question in business for the past six months has been, “Where will Amazon build its second headquarters?” With many cities still in the mix, it's still anyone's guess ... but Zillow thinks it has it figured out.
A new study by Zillow predicts that Amazon will choose either Atlanta or Northern Virginia, near the Capital Region, for its much-sought-after HQ2. Zillow's prediction is not a capricious one. The firm polled 85 housing experts and economists. Twelve said that Atlanta seems to be the likeliest bet. That's the largest single consensus of the poll. The city, Zillow said, has an enviable combination of steady growth and appeal with generally affordable housing and rents.
In fact, among the 20 cities on Amazon's list (winnowed from an original list of 238 bids), “Atlanta has the fourth-lowest home values and rents, making it an attractive option for Amazon, which is expected to hire as many as 50,000 people to come work at the new headquarters,” the report stated.
Also, Atlanta “is undergoing an urban renaissance with new public infrastructure providing attractive opportunities for employers seeking to lure young urbanites,” said Zillow Senior Economist Aaron Terrazas.
In addition to affordability, experts cited land availability, talent, and business-friendly tax codes as a few reasons why they believe Amazon will choose Atlanta as its second headquarters
Not so far from Atlanta, Northern Virginia is among the more expensive housing markets on the top 20 list. However, placement here would “put Amazon at the doorstep of the nation's top policymakers. In other words, exactly the kind of place that a major business could inject with stable and steady job opportunities,” the report claims.
“Northern Virginia has its benefits as well," said Terrazas, "as it's close to a highly educated workforce and a well-developed public transit infrastructure in the D.C. area."
A growing tech workforce was another major reason by Northern Virginia is in a neck-and-neck tie with Atlanta. As with Atlanta, 12 experts said Northern Virginia would be the place.
Close behind Atlanta and the D.C. Area is Austin, one of two Texas cities in the running for HQ2, and the second-likeliest option. Eleven experts said Austin, with its tech growth and strong appeal overall, would be the place for Amazon. The other Texas city still in the hunt, Dallas, is considered the fourth-most-likely home for Amazon.
Least likely to win the coveted HQ2 are New York and Los Angeles, Zillow reports. Both markets' biggest drawback is how expensive it is to live there already—something Amazon is reported to be taking seriously.
Wherever HQ2 goes, that city will need to be prepared for some real impact.
"The potential economic benefits of hosting Amazon HQ2 are tantalizing, and will tempt the 20 municipalities still in the hunt to dangle significant tax incentives to get a deal done," said Terry Loebs, Founder of Pulsenomics. "These cities should be prepared not only to justify their financial inducements, but to carefully weigh the social risks and costs that could accompany their HQ2 commitment. The mix and degree of these potential risks, such as diminished affordable housing stock, more congested roadways, and greater income inequality, vary considerably across the 20 markets."
But wherever it goes, if history is any guide, the effects will be sizable.
"As the experience of Seattle suggests, Amazon will not only directly bring thousands of high-paying jobs to the chosen city, but also has the potential to transform the regional economy," Terrazas said. "The local jobs boom that Amazon's HQ2 promises will spur demand for the full spectrum of housing types, ranging from urban apartments to suburban single-family homes.”
Amazon will let us know who wins the prize later this year.