Real Estate Experts Say Amazon’s Move to NY Could Be a Boon for Housing and Jobs
22 Nov 2018
Ecommerce giant Amazon isn’t even in New York yet, but that hasn’t stopped an increased interest in open houses, or lawmakers from asking the company to leave.
Amazon’s new offices headed for Long Island City (LIC) is a move that some real estate experts say is promising and will bring about bigger effects to the area, both in housing and the overall job market.
For example, according to a report from CBRE, a real estate firm, for every 8.9 jobs created, one multifamily housing unit like an apartment or a duplex, is needed. Specifically to Amazon’s case in LIC, two retail employees (in non-Amazon jobs) are necessary for every person making $150,000 (the average salary Amazon stated its workers will make), said Spencer Levy, global head of research at CBRE.
He explained that while Amazon said it’s bringing 250,000 jobs to New York, the actual number of new jobs will end up more than that due to the “indirect multiplier effect.” Since new spots like coffee shops, restaurants or retail stores will open to service people who work and live in close proximity to the office, that means a slew of new jobs and workers as well. Another effect from Amazon’s new office is an increased demand on office space, from companies like law firms coming to LIC as well.
“That’s what happens when you have a high-quality, high-profile company move to your area,” Levy said. “Not only do people want to provide service to them, but they also want to be associated with them.”
Levy said New York and Washington, D.C.’s infrastructure and the cities’ “live, play, work environments” definitely played a role in why these locations were chosen. He added that Cornell University’s new tech campus on Roosevelt Island, while not noted in the official announcement, is another factor as to why Amazon chose LIC; there’s an influx of new talent, ready for Amazon to recruit.
Before the official news was revealed, Robert Whalen, director of sales at Halstead, a real estate company, said traffic to open houses was up, with average attendance seeing an increase of 250 percent. While it’s still too early to tell what the real demand of Amazon’s new headquarters will bring to LIC, Whalen said “appreciation” in other markets such as Astoria, Sunnyside, Greenpoint and Williamsburg will go up as people decide whether they’re ready to buy in LIC.
However, Whalen said the community will face “challenges” such as needing better infrastructure to support the influx of new people, but he thinks Amazon will bring solutions to these issues.
“Wherever you go, especially in a growing neighborhood, you want to have an assurance that the city is doing what it needs to do to maintain the infrastructure,” Whalen said.
He also said New York governor Andrew Cuomo and Amazon CEO Jeff Bezos “want this to succeed” and have most likely looked at how to ensure the deal actually fulfills on its promises. Real estate agents won’t be the only ones watching. The New York Working Families Party released a statement on Nov. 14, asking for Amazon to pay the right amount of taxes to bring its business to New York.
“If Amazon is going to increase traffic and strain our broken subway system, then it needs to pitch in to maintain and improve New York’s infrastructure,” said Bill Lipton, state director of the New York Working Families Party, in a statement. “If Amazon is going to drive up rent, then it needs to help shoulder costs of affordable housing programs. And if Amazon wants to bring good jobs to Long Island City, that’s great, but it needs to make sure that those jobs go to local CUNY graduates instead of Silicon Valley transplants. Most of all, Amazon needs to stop the union busting and give all its workers the freedom to organize without resistance or retaliation.”
On Nov. 14, State Sen. Michael Gianaris and City Councilman Jimmy Van Bramer held a rally in LIC to protest the arrival of Amazon in LIC. Councilman Van Bramer continues to tweet about the current woes in the neighborhood, such as overcrowding on transit lines and issues in public housing.
Gov. Cuomo, however, is already on the offensive, publishing an op-ed on Nov. 19 defending the move and that “in government, we must deal with facts and reality.”