What does Raleigh’s competition for Amazon's HQ2 look like?

Amazon narrows the field for the company’s second North American headquarters, and Raleigh is a finalist. Here are some pros and cons of each contender.
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Amazon narrows the field for the company’s second North American headquarters, and Raleigh is a finalist. Here are some pros and cons of each contender.
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Morning Newsletter

Is Raleigh’s housing market good enough for Amazon’s HQ2? Zillow says maybe.

By Camila Molina

cmolina@newsobserver.com

March 01, 2018 10:31 AM

RALEIGH

Zillow, one of the leading real estate and housing companies in the U.S., puts Raleigh in a tie for third place for Amazon’s second headquarters. But don’t get excited just yet.

Zillow surveyed 85 housing and economics experts to predict which of the 20 cities that made Amazon’s first cut would be a good fit for the company’s second headquarters, or HQ2. They settled on Atlanta, one of the cities with the lowest housing home values and rent, and Northern Virginia, with one of the more expensive housing markets and a well-developed mass transit system, as the top two picks – as in tied for No. 1.

Zillow also picked Atlanta based on the city’s proximity to Southeast port cities, space to grow and a business-friendly regulatory climate, and Northern Virginia because of proximity to policymakers in Washington, D.C.

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Austin comes in second, and Raleigh is in a three-way tie for third with Denver and Montgomery County, Md.

Experts didn’t choose Raleigh as a top contender because it’s a small city, according to the survey responses.

Others have disqualified Raleigh because it lacks a reliable mass transportation system, though some analysts have pointed out the traffic here isn’t as bad as in many of the other cities on Amazon’s list.

Of the 85 that responded, 12 said Amazon would pick Atlanta, 12 picked Northern Virginia, 11 picked Austin and nine picked Raleigh.

Traffic in the Triangle is better than in all but one of the 20 finalists for Amazon’s HQ2, according to an annual analysis of traffic congestion by the transportation analytics firm INRIX.

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“As the experience of Seattle suggests, Amazon will not only directly bring thousands of high-paying jobs to the chosen city, but also has the potential to transform the regional economy,” said Aaron Terrazas, Zillow’s senior economist.

Amazon is looking for a city with a competitive and diverse housing market for the 53,000 employees the headquarters will likely attract, according to the company’s requirements for HQ2. But housing is lower on Amazon’s priority list, compared with the 8.1 million square feet the company is requesting for the campus, a large tech labor pool and state and local incentives.

Raleigh’ average home value on Zillow is about $235,000 and rent is $1,433. Comparatively, Atlanta’s average home value is $187,000, while rent there averages $1,391.

“The local jobs boom that Amazon’s HQ2 promises will spur demand for the full spectrum of housing types – ranging from urban apartments to suburban single-family homes,” Terrazas said.

When Amazon considers the housing market of each city, it’s comparing not only prices, but the availability of housing close to the HQ2 site, recreational activities, cost of living and crime, based on the requirements it asked of applicant cities.

Zillow experts noted Raleigh’s advantages: comparatively low housing costs, its location on the East Coast; the accessibility of talent from the Research Triangle, UNC-Chapel Hill and Duke; relatively cheap land; and its business-friendly environment.

Zillow experts said Los Angeles, New York and Miami were the cities least likely to be picked because of high housing costs, traffic and “an unfavorable tax environment.”

From RTP to Chatham Park,Triangle leaders have several locations in mind as they woo Amazon's second headquarters to the area. Here's a look at some of the prospects.

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Camila Molina: 919-829-4538, @Cmolina__