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Amazon Effect: HQ2 Would Spur the Biggest Rent Hikes in Nashville and Denver

If Amazon builds its second headquarters in Nashville, rents would rise an additional 2.4 percentage points each year, according to a new Zillow analysis

- New Zillow research shows just how much of an impact Amazon HQ2 could have on rents in the 20 finalist cities, boosting rents the most in Nashville.

- Nashville already is one of the fastest-appreciating housing markets in the country, with home values up 12 percent year-over-year.

- Denver and Los Angeles would also see a meaningful bump to rent growth from the estimated 50,000 workers Amazon plans to hire.

- Among Amazon's top-20 list, HQ2 would provide the smallest boost to rents in Indianapolis, Chicago and Toronto.

Apr 26, 2018

SEATTLE, April 26, 2018 /PRNewswire/ -- Among the 20 finalist cities, Amazon's second headquarters would boost annual rent appreciation the most in Nashville, Denver and Los Angeles, according to a new Zillow® analysisi.

After receiving 238 bids, Amazon announced in January that it narrowed its search for a second headquarters ("HQ2") to 20 cities. Zillow's new research shows just how much of an impact Amazon HQ2 would have on rents in each of those housing markets.

The estimated 50,000 new jobs associated with Amazon HQ2 would have the greatest impact on rents in Nashville. If Amazon workers start arriving one year from now, Nashville could see the pace of rent appreciation more than double from what Zillow expects without HQ2 -- an additional increase of 2.4 percentage points on top of the almost 1 percent Zillow currently expectsii.

If Amazon starts hiring in 2019, monthly median rent in Nashville would jump from $1,511 to $1,547 -- which is an extra $431 per year paid in rent.

Nashville already is one of the fastest-appreciating housing markets in the country. Over the past year, home values have grown 12 percent -- the fourth fastest in the nationiii -- and rents have increased 2.3 percent to a median of $1,497 a month.

In Denver, rents are expected to rise an additional 2.3 percentage points each year if Amazon selects the area; in Los Angeles, that extra rent hike would be 1.9 percentage points each year, until Amazon has hired all 50,000 employees.

As Amazon has grown from a startup bookstore to one of the country's most prominent retailers, Seattle rental prices, where Amazon is based, have increased by half and home values have almost doubled.

But Seattle's skyrocketing housing costs can't all be blamed on Amazon. The jobs boom in and around Amazon's Seattle headquarters explains about 1 percentage point of the average 5.6 percent annual increase in rents from 2010-2015. Amazon's boom in Seattle coincided with a period of rising rents nationwide.

"While the prospect of 50,000 new jobs is no trivial matter for any city, the home to Amazon's second headquarters likely won't experience the kind of dramatic boost in rents Amazon helped fuel in Seattle," said Zillow senior economist Aaron Terrazas. "Nashville and Denver are the only two metros that could see a greater boost to rents due to Amazon than Seattle has seen. Many of the finalist cities have a relatively strong record of adding new rental supply in response to new demand, helping curb rapid rent growth – though rents could escalate more quickly in communities with a smaller employment base and/or those unable or unwilling to add meaningful new housing supply. Growth often brings growing pains, and in the past it has been lower-income households that bore the brunt of rising housing costs in the face of rapid expansion. Whichever community is chosen, it's critical that local leaders begin working now to prepare their cities as best they can."

Zillow expects Amazon to have a larger impact on Nashville rental prices than what Seattle has seen. The Nashville metro is about half the population of Seattle and the 50,000 new jobs associated with Amazon's second headquarters would be larger relative to the current employment base than was the case in Seattle.   

Among Amazon's top 20 list, HQ2 is expected to have the smallest impact on rental prices in Indianapolis, Chicago and Toronto. A panel of more than 100 housing experts recently surveyed by Zillow ranked Atlanta and Northern Virginia as the two most likely places to be chosen for HQ2. Both can expect a relatively modest boost to rents if selected -- just a 0.4 percentage point boost to rent in Atlanta, and a 0.6 percentage point boost in Northern Virginia.

If Amazon selects Indianapolis, essentially no impact on rental prices is expected. Indianapolis is one of the most affordable housing markets on Amazon's top 20 list, so most new arrivals to the city may be enticed to buy a home quickly rather than rent. In addition, Indianapolis has a strong record of adding new housing to meet new demand.

In Chicago, Zillow expects annual rent growth to increase an additional 0.1 percentage point if Amazon selects the Windy City for its second headquarters. Zillow expects annual rent growth to rise an additional 0.2 percentage point in Toronto, and an additional 0.4 percentage point in Philadelphia.

Metro Name

Boost to Annual
Rent Appreciation
from Amazon HQ2

YoY Rent

Median Rentiv

Median Rent in 2019 if
Amazon Moves In

Nashville-Davidson--Murfreesboro--Franklin, TN



$              1,497

$                                 1,547

Denver-Aurora-Lakewood, CO



$              2,047

$                                 2,168

Los Angeles-Long Beach-Anaheim, CA



$              2,746

$                                 2,880

Pittsburgh, PA



$              1,063

$                                 1,072

Raleigh, NC



$              1,436

$                                 1,497

Miami-Fort Lauderdale-West Palm Beach, FL



$              1,862

$                                 1,940

Boston-Cambridge-Newton, MA-NH



$              2,371

$                                 2,490

Columbus, OH



$              1,317

$                                 1,349

Austin-Round Rock, TX



$              1,686

$                                 1,710

Dallas-Fort Worth-Arlington, TX



$              1,606

$                                 1,656

New York-Newark-Jersey City, NY-NJ-PA



$              2,401

$                                 2,396

Washington-Arlington-Alexandria, DC-VA-MD-WV



$              2,146

$                                 2,170

Atlanta-Sandy Springs-Roswell, GA



$              1,394

$                                 1,445

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD



$              1,579

$                                 1,592

Greater Toronto, ON



 $1,031 (CAN$1,333)v

 $1,047 (CAN$1,354)

Chicago-Naperville-Elgin, IL-IN-WI



$              1,653

$                                 1,651

Indianapolis-Carmel-Anderson, IN



$              1,208

$                                 1,206


Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i For this analysis, Zillow used their own data on metro rents and quarterly data on worker inflows from the U.S. Census Bureau's Longitudinal Household Employer Dynamics (LEHD) program to estimate how rents have responded to inflows of workers from outside the metro area between 2010 and 2016 – the time period jointly covered by the two data series. Zillow then estimated six different models of the relationship between worker inflows and rents and, for each market, selected the model with the strongest fit according to five progressively laxer selection criteria. For more information on how this analysis was conducted, email

ii As long as the hiring continues. Zillow assumes a constant rate of hiring over roughly 7 years, which is about the length of time it took for the Seattle HQ to ramp up to full – or near full – capacity.
iii Among the 50 largest U.S. metros.
iv Data from February 2018
v Using USD/CAD exchange rate of 1.293. Source: Bank of Canada, Daily Exchange Rates


SOURCE Zillow, Inc.

For further information: Jordyn Lee, Zillow,