Atlanta and Northern Virginia are the most likely landing spots for Amazon’s coveted second headquarters location, according to a recent Zillow survey of economists and real estate experts. Los Angeles was deemed least likely to win the heated competition for Amazon HQ2.
Atlanta and Northern Virginia are the most likely landing spots for Amazon’s coveted second headquarters location, according to a recent Zillow survey of economists and real estate experts. Los Angeles was deemed least likely to win the heated competition.
Amazon’s search for another headquarters location to supplement its existing corporate campus in Seattle set off a period of frenzied bids from hundreds of North American communities, with 20 recently emerging as finalists. More than 100 economists and experts nationwide were asked to choose the most and least likely choices from among this list, as part of the most recent Zillow Home Price Expectations Survey.[1]
Atlanta’s geographic location – in the eastern time zone and close to southeast U.S. port cities – as well as abundant space to grow and a business-friendly regulatory climate were cited by panelists as reasons for Amazon to choose it. Housing costs in Atlanta are also among the lowest of any of the 20 finalist communities, a potential selling point to the 50,000-plus employees expected to populate the new Amazon campus, with local home values and rents well below the national medians.
Northern Virginia tied with Atlanta as the most popular choice for most likely destination, with panelists citing its proximity to policymakers in Washington, D.C., and its emergence as a growing tech sector among its strengths. The suburban D.C. community of Montgomery County, Md., also scored high in panelists rankings, for many of the same reasons, coming in third (behind Austin and tied with Denver and Raleigh). Interestingly, the city of Washington, D.C., itself scored much more poorly in the rankings, with more panelists ranking it the least likely destination than the most likely, citing its high costs and difficult regulatory environment.
Los Angeles earned it spot as the least likely destination because of high taxes, a heavy regulatory environment and housing costs that are among the highest in the country, according to panelists’ comments. Los Angeles was joined by New York and Philadelphia as the only finalist cities to not receive at least one vote for “most likely” destination.
Following L.A. on the least likely list were Newark, New York City and Miami. High taxes and high regulation were among the reasons cited to keep the New York/Newark area out of contention in panelists’ minds. And unlike other cities that scored well or poorly with panelists based on the local business climate, Miami took some hits for its literal climate – more than one panelist cited frequent hurricanes and its too-southern location as demerits.
Toronto, the only non-U.S. city chosen as a finalist, placed near the bottom of the pack with panelists. While some were swayed by the large talent pool and the potential for unmatchable incentives and financial pot-sweetening deals as a reason Amazon might consider Canada’s largest city, more cited potential negatives including cross-border logistics and the PR blowback if Amazon left the U.S.
As Amazon has grown from a startup bookstore to one the nation’s leading retailers, home values in Seattle, where Amazon is based, have almost doubled and rents have increased by half. But while the city has experienced some growing pains, it has also benefited in many ways – and offers a number of lessons for whichever city is eventually chosen as Amazon HQ2.
[1] The Zillow Home Price Expectations Survey is a quarterly survey of more than 100 economists and real estate experts nationwide, sponsored by Zillow and conducted by Pulsenomics. The survey asks experts to offer their expectations for growth in the U.S. Zillow Home Value Index over the next five years, as well as offer their opinion on a series of supplemental questions determined by the survey authors. The most recent survey edition collected responses from 105 panelists and was fielded between Jan. 29 and Feb. 12, 2018.
