The median cost for buying a house in Northern Virginia rose about 12.22 percent in the past year, since Amazon announced its decision to move its second headquarters to Arlington.
Although most of the workers have not yet been hired, the market is still reacting to the economic and population growth that HQ2 is expected to bring, Christine Richardson, president of the Northern Virginia Association of Realtors, told The Center Square.
With Amazon expected to bring in between 2,500 and 4,000 employees every year for the next decade, Richardson said that housing values will likely continue to increase over this time period barring a recession or some other shift in the market. Amazon’s new headquarters may also spark business and job growth in the surrounding areas.
Northern Virginia’s houses are also staying on the market for shorter periods of time and the inventory is shrinking. The average day on the market has gone down from 33 to 24, which is a 27.27 percent decrease, and the inventory has shrunk from 3,767 to 2,556, which is a 32.15 percent decrease.
Richardson said that the rising cost in housing is leading people to buy houses more quickly out of concern that the prices will continue to rise. She said that another reason the inventory is down is likely because homeowners who were planning to sell are holding onto their property until the value increases further.
Arlington and its neighbor, Alexandria, are already fully developed, which means that any new housing developments would have to replace current developments, Richardson said.
Local governments have increased affordable housing programs to help low-income residents. Amazon also has donated to affordable housing initiatives.
Russell Danao-Schroeder, senior housing planner for Arlington County, told The Center Square that Arlington has about 8,000 affordable housing units at the moment. The median housing cost increase for Arlington was lower than the median in the region at about a 6.8 percent increase, but Richardson said that the sample size was small and might not reflect the rise in value.
Danao-Schroeder said that Arlington is reviewing the Affordable Housing Master Plan and looking into financial tools to help with aid. He said that rent prices have continued to increase as well, but those costs are on par with the rate of inflation.
Emily Hamilton, a research fellow at the free-market Mercatus Center, told The Center Square via email that there are ways in which the local governments can increase affordable housing without using public resources.
“Allowing more housing to be built at a variety of price points is the most important thing local governments can do to improve affordability, and it doesn’t require any public resources,” Hamilton said.
“Some Northern Virginia jurisdictions are doing a good job of using local and federal resources to provide housing aid for their lowest-income residents, which is important,” she said. “However, several Northern Virginia jurisdictions have inclusionary zoning programs that require developers to set-aside new housing units for middle- and high-income residents (up to $140,000 for households in Arlington). These programs are a tax on new housing construction and make affordability problems worse for everyone who isn’t lucky enough to get a below-market-rate unit. These households shouldn’t be subsidized, and creating “affordable housing” for such high earning households is a distraction from providing aid to the low-income households who do need it.”
Hamilton said that Amazon’s move to Arlington will benefit the community, but that the subsidies provided to the company were unlikely necessary to bring them to the region.