© 2019 Fannie Mae. Trademarks of Fannie Mae. 4.17.2019 1 of 4

Multifamily Market Commentary – April 2019

The Multifamily Impact of Amazon’s HQ2 Will Likely Be Minimal

After much anticipation and speculation regarding the location of its second headquarters, Amazon finally announced that 

it would bring 25,000 new employees to two different locations: Crystal City, Virginia, in the Washington, D.C. metro area, 

and Long Island City in the New York City metro area. Since then, Amazon has rescinded its plan to proceed with HQ2 in 

Long Island City due to opposition from local community activists and politicians, focusing on Crystal City instead. Amazon 

also recently affirmed that it would be creating 5,000 new jobs in downtown Nashville and more than 800 new jobs in 

Austin. 

Amazon Metros’ Market Performance Expected to Remain Stable

Amazon’s expansion into these metro areas fueled instant speculation about the potential impact on local housing markets, 

including multifamily rental properties. Rent growth among the Amazon-chosen metros has been largely non-volatile and 

has followed a similar pattern since 2004, though Nashville has experienced higher peaks and lower troughs. Fortunately, 

the multifamily markets of these “Amazon” metros have a substantial amount of new multifamily rental supply underway 

that should be able to easily absorb the anticipated demand.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

DC Crystal City Austin Nashville

Annual Multifamily Vacancies of Amazon Metros

Source: CBRE Economic Advisers
© 2019 Fannie Mae. Trademarks of Fannie Mae. 4.17.2019 2 of 4

Supply Over Time Remains Reasonable – For Now

The Austin, Nashville, and Washington D.C. metro areas have more than 51,000 units underway combined. This supply is 

expected to deliver by the end of 2020. The metro areas of Austin, Nashville, and D.C. have also had over 180,000 units 

completed since 2013. If both were to stop building after the delivery of what is currently in their pipelines, they would still 

have more than enough new supply to absorb Amazon’s new employees. 

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

DC Crystal City Nashville Austin

 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

 DC

 Nashville

 Austin

 Crystal/Pentagon City

 Underway Completions

Nashville with Higher Peaks and Lower Troughs Since 2004 than Other Amazon Metros

Source: CBRE Economic Advisers

Construction Completed & Underway in Amazon Markets

Source: CBRE Economic Advisers
© 2019 Fannie Mae. Trademarks of Fannie Mae. 4.17.2019 3 of 4

Solid Demographics Support Amazon’s Arrival

The submarket of Long Island City, despite its elevated level of new multifamily supply of more than 30,000 new units since 

2013, would likely have been able to accommodate the potential demand from Amazon. The same holds true for the Crystal 

City submarket, with just 440 new multifamily units underway. Nashville, too, is in a great position to absorb its incoming 

5,000 new Amazon employees over the past few years, thanks to the nearly 7,000 units scheduled to deliver by the end of 

2020

Crystal City: Looking Good in the Nation’s Capital

The multifamily demographics of the Washington D.C. area are a bit more attractive on paper than its New York City metro 

counterpart. Even though its population of about five million people is just one-third the size of New York City, the 

population growth rate is slightly better and even exceeds the national average (0.70 percent) at 0.80 percent. The 

Washington D.C. metro area also attracts a significant portion of Millennials. Indeed, Millennials account for about 0.60 

percent of the Washington, D.C. metro’s population growth rate, compared to just 0.10 percent nationally. Another 

advantage the D.C. area has is its median household income of $104,000, much higher than the national average of $64,000.

Nashville: Music City Sings a Fine Tune

While Nashville may not be as large as D.C. or New York City, its multifamily market still has plenty going for it. Nashville’s

population grew by 1.3 percent and its prime renting cohort population expanded by an enviable 1.6 percent in 2018. Lastly, 

it’s also much more affordable. The median household income in Nashville is slightly less than that of New York City, at 

$68,000 per year, but still higher than the national average of $64,000.

New York City: A (Not So) Easy Choice

Of all the metro areas Amazon considered for its second headquarters, New York City has the biggest population and 

employment bases at 14.6 million and 7.1 million, respectively. However, looking further at New York City’s demographic 

profile, it lags the nation in a few categories. 

• Population growth has been slow at just 0.3 percent as of fourth quarter 2018. 

• The population of Millennials, the prime renting cohort, has contracted by 0.3 percent year over year as of fourth 

quarter 2018.

Due to the presence of other technology companies, such as Google, Oracle, Facebook, and Etsy, in New York City, Long 

Island City presented Amazon with a unique advantage over its competition as it would have had an actual headquarters 

location, as opposed to just regional office space.

The Amazon Effect Continues

Amazon had an opportunity most companies would love: being wooed by many of the nation’s largest metros, with most 

offering attractive incentives. While Amazon may have made a smart choice in selecting Washington, D.C., it was clearly 

caught off-guard by the small but powerful anti-Amazon faction in New York City. Luckily for Amazon, the other metros 

chosen should be able to integrate the company rather easily. Amazon’s impact in Crystal City and Nashville is expected to 

be profound, but it is unlikely to impact those areas as significantly as it would have less economically advantaged metros.
© 2019 Fannie Mae. Trademarks of Fannie Mae. 4.17.2019 4 of 4

Francisco Nicco-Annan

Economist 

Multifamily Economics and Market Research

April 2019

Opinions, analyses, estimates, forecasts and other views of Fannie Mae's Multifamily Economics and Market Research 

Group (MRG) included in these materials should not be construed as indicating Fannie Mae's business prospects or 

expected results, are based on a number of assumptions, and are subject to change without notice. How this information 

affects Fannie Mae will depend on many factors. Although the MRG bases its opinions, analyses, estimates, forecasts and 

other views on information it considers reliable, it does not guarantee that the information provided in these materials is 

accurate, current or suitable for any particular purpose. Changes in the assumptions or the information underlying these 

views could produce materially different results. The analyses, opinions, estimates, forecasts and other views published 

by the MRG represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie 

Mae or its management.