Photo provided by JBG Smith
As we inch closer and closer to the new year residents of Northern Virginia and New York anxiously await to see what will happen once their new neighbors move in. It's still unclear how and exactly when Amazon is going to move into its Northern Virginia campus, but one thing is certain: people are stressed. Keep calm because we're going to dive into how the megacorp could impact the DMV area.Current housing in Northern Virginia
Arlington, VA (the county that Crystal City resides in) had an average rent of $2437 in November 2018, which has increased by about 4% from this same time last year. Projections are looking at an increase of 0.1 - 0.2 % in the DC/NOVA area after Amazon gets settled into Crystal City... I mean National Landing. To put this in perspective, Seattle's housing market shot up by 73% and about 31% in rent in the areas surrounding Amazon's HQ (and they're still going up).
What's important to note is that Northern Virginia's housing market was already on an upward trend, so NOVA has been on the rise before Amazon came calling.
Realtors in the area are also taking into account how quickly everything will come together. Crystal City isn't what a lot of people would call trendy or hip, so JBG Smith's revamp of National Landing isn't going to be an overnight job. Some realtors are anticipating a few years before Crystal City is officially replaced by National Landing, even though there are a couple listings that have jumped the proverbial gun and already increased their listings in Arlington.
Staying out of the Amazon
While other areas like Clarendon, Rosslyn, and the City of Alexandria have been more popular and developed more than Crystal City, that doesn't mean there aren't people concerned about keeping the culture of the city. It was easy to tell in more ways than one once Amazon moved from the suburbs to downtown Seattle. Locals can tell you that the corporation swept over downtown Seattle and after some time they couldn't recognize any of the shops.
If you didn't get on the Amazon train, then your business probably didn't stand up to what Seattle residents called Amazonia, which currently stretches over 13 million square feet. The original HQ doesn't appear to have plans to stop expanding even with a split HQ2 being announced.
Mostly impacting the South Lake Union area in Seattle, the corporation replaced low-rise buildings, warehouses, and parking lots with high-rises, luxury real estate, and trendy coffee bars selling avocado toast. This definitely played a role in how Seattle's housing market increased drastically in less than 10 years, but that wasn't the only thing to increase — the town now competes with cities like Los Angeles for some of the worst commute times in the nation.
See, no one predicted that Amazon would grow so quickly, so there weren't any plans in place to help mitigate traffic, pollution, or prepare for more affordable housing options. The company never sat with Seattle's mayor to discuss TOD strategies or how they could integrate with the existing culture, not consume it.
Fortunately, we have time and the information to learn from Seattle. This is why small businesses in Crystal City have banded together to ask locals (and of course Amazon) to keep some of their history intact.
What do some experts advise?
They're anticipating an initial increase, but what will ultimately sway your rent prices to becoming unbearable are other companies. Amazon moving in next door to Arlington and DC is just the first move, what comes of that is going to affect pricing long term. There could be an influx of tech startups as Northern Virginia continues to become the East Coast Silicon Valley.
What it's going to come down to in the immediate future is rent control — can your landlord legally increase the price of rent as you look to sign for another year? There are rent controlled properties in both DC and Northern Virginia, which means that there are limits to how much you rent can be increased. Rental rate stabilization provides boundaries for how quickly your landlord can increase your rent — this protects tenants from sudden spikes that become unaffordable, therefore forcing residents to move out even if they pay on time and keep their space clean.
With prices expected to increase by a minor amount, economist suggest that it may be better for some renters to stay put and avoid broker fees, moving expenses, and other factors that can add up when you decide to move.
No one has an exact answer, but what we do have is experience. Amazon is an extremely established corporation, much larger than what it was when it dug its roots into Seattle. As we've pointed at before, Amazon has the power to set an example for companies that will more than likely follow the megacorp to Queens and National Landing. Jeff Bezos has shown his dedication to greener commutes and improving the lives of citizens in Amazon's communities, so we can expect to see these practices (and more) at the new HQ2s.