A woman walks on a sidewalk in Crystal City, near Amazon’s planned headquarters. Critics say the influx of employees there will hurt nearby communities. Cliff Owen / AP Photo
A progressive group in Virginia has published a report that predicts an Amazon campus in Northern Virginia will “intensify and accelerate the area’s affordable housing crisis.”
The organization New Virginia Majority, which supports economic policies that benefit immigrants and people of color in the commonwealth, conflicts with an earlier analysis from George Mason University that says Amazon would have a softer and more gradual impact on local housing prices.
If the mega-retailer opens a headquarters in the Crystal City area, as it’s expected to do this year, the company’s presence will lead to rent increases for “at least 2,500 apartment units in Alexandria and at least 500 units in Arlington,” the report says, disproportionately impacting pockets of affordability in heavily Latino neighborhoods such as Chirilagua, also known as Arlandria.
“Without concentrated mitigation strategies and investment,” the analysis says, “a rooted, historic, unique Latinx community will be destroyed by the public investment that attracts Amazon’s HQ2.”
But economists with George Mason University’s Stephen S. Fuller Institute say the report is “based on fuzzy logic.”
“Housing prices have been and are increasing annually for a reason that has nothing specifically to do with Amazon,” economist Stephen Fuller writes in an email. “This report is addressing a point of concern, but does it by misusing the facts.”
What’s In The Report
New Virginia Majority’s analysis aligns with the concerns of left-leaning activists in Northern Virginia, who have been pressuring the Arlington County Board to vote against a proposed multimillion-dollar incentives package for the company.
Amazon picked Northern Virginia for its new offices last year, capping a competitive nationwide bidding process that stretched on for months. Lawmakers in Richmond recently approved a state incentives package for the company, worth up to $750 million. The deal also provides funding for a new Metro stop in Potomac Yard, not far from Crystal City. Arlington officials are expected to vote on a separate county incentives package — worth $23 million over 15 years — no sooner than March 16.
Both the state and county incentives are based on Amazon’s commitment to hiring at least 25,000 workers for its Virginia campus over the next 10 to 12 years.
Activists say incentivizing Amazon does a disservice to Latino Virginians, in particular. Not only does Amazon have an apparent business relationship with Immigration and Customs Enforcement, they say, but the company’s relatively high salaries will attract affluent employees to neighborhoods near what’s now being called National Landing. That could increase demand for luxury homes, motivating landlords to sell their property to high-end condo developers and displace working-class residents, including Central American immigrants.
Locals who live within a 30- to 40-minute commute of Amazon’s planned headquarters, the report says, are especially vulnerable.
“Despite other considerations, such as the housing stock, quality of schools, and neighborhood amenities, home-to-work travel time figures prominently when choosing where to live,” New Virginia Majority’s analysis says. “The opening of a new Metro stop at Potomac Yard will [create] more pressure to raise rents.”
Amazon-related development, the report says, promises “vibrant, [walkable], transit-oriented community building as its driving mission. However, will the realization be inclusive of communities of color and low- and moderate-income working families?”
Not Just An Amazon Problem?
Economists at George Mason University’s Stephen S. Fuller Institute disagree with the report’s findings, saying Amazon alone probably won’t cause dramatic rises in housing prices across the region.
In a report published last year, university economists wrote, “While [the company’s Virginia campus] will generate additional demand for housing, its effects will be geographically dispersed and gradual.”
That’s mostly because the D.C. area already adds tens of thousands of jobs a year, according to Stephen Fuller. Viewed in that context, he says, Amazon’s promise of 25,000 jobs is a trickle, not a flood.
About 345,000 new jobs were created here between 2010 and 2018, Fuller writes in an email. The region is projected to add 375,000 more between now and 2035.
“Amazon’s 25,000 jobs are included in this latter number,” Fuller writes. “So, how is Amazon the problem?”
Economists at the institute predict that, based on household patterns of Arlington workers that factor in age, wage and industry, Amazon workers are likely to snap up single-family homes in places like Fairfax County.
“The [New Virginia Majority analysis] assumes, essentially, that the Amazon workers will not need to think about anything other than his/her personal commute time,” writes Jeannette Chapman, deputy director at the Fuller Institute. “That isn’t true for most [households].”
Chapman says other considerations like employees’ families, pets and preferred neighborhood attributes are often just as important to home buyers. “This is why every job holder does not live where his or her job is located or within a 40-minute commute,” she writes.
Plus, Fuller adds, regularly occurring turnover in existing housing is anticipated to absorb much of the new demand from Amazon workers.
The institute acknowledges that the needs of highly paid Amazon workers could push up rents and home sale prices, but “only marginally above the rise that is expected to occur without these households.”
Affordable housing advocates generally agree that the Washington region is already in the grips of a housing shortage. But not all observers agree that Amazon could worsen that crisis to any significant degree.
The Northern Virginia Affordable Housing Alliance (NVAHA) recently called on Virginia officials to create and preserve more affordable housing in the region, based on the assumption that Amazon will make the local housing market more competitive than it already is.
But those advocates haven’t asked officials to cancel Amazon incentives or toss out a deal with the company, as some activists have demanded. Instead, they’ve recommended other solutions, such as encouraging more multifamily development in Virginia. Adding more housing overall, they say, will decrease pressure on prices.
“The announcement by Amazon that Crystal City was selected for [a new campus] will provide significant benefits for the region,” says a report from NVAHA. “However, this announcement should create a regional sense of urgency and commitment to address our housing supply and affordability gap.”