Memo for fiscal year 2020, updated 2019-03-12

[Archived] Question #37: Can staff provide the potential impact on Affordable Housing for Alexandria residents in regards to Amazon HQ2?


Can staff provide the potential impact on Affordable Housing for Alexandria residents in regards to Amazon HQ2? (Councilman Seifeldein)


The economic development activities generated by the location of Amazon HQ2 and the Virginia Tech Innovation Campus in National Landing will bring thousands of new jobs and new workers to Arlington and Alexandria, increasing the need for a variety of housing options in both communities, as well as in locationally-efficient (offer public transit access to National Landing) neighborhoods in Fairfax County and Falls Church.

The job growth anticipated, including in the technology and higher education sectors, as well as among the retail, hospitality, construction, and services businesses that will support HQ2 and Virginia Tech, is expected to occur over a ten to 15-year (or longer) period, at a pace and trajectory typical for economic growth in the metropolitan area. A large portion of Amazon hiring will also already live in the Washington, D.C. metropolitan area. Still, it is inevitable that some short to mid-term cost pressures will occur in Alexandria’s housing market as developers and property owners take advantage of the perception of an “Amazon effect” before new efforts to preserve existing housing affordability and to expand affordable housing development can be fully implemented with the additional resources that will be invested to meet housing need.

Given Amazon’s impact on the Seattle housing market (which did not have transit oriented growth plans already in place which the D.C. region does, nor a regional heavy rail transit system), enhancing local housing affordability and choice has informed Alexandria’s planning for the proposed economic activities: during brainstorming sessions regarding anticipated housing affordability needs organized by the City and the Alexandria Economic Development Partnership (AEDP) as part of the request for proposals process, regional housing and economic development staff, as well as Virginia Housing Development Authority (VHDA) and nonprofit housing leaders identified the potential range of housing options required, including levels of affordability and types of tenure (rental/sales) and products, taking into consideration National Landing’s projected professional and administrative workforce (25,000 Amazon jobs at an annual average salary of $150,000), as well as potentially  many more created in support of HQ2, including in lower wage sector jobs like retail, construction, hospitality and services all needing housing affordability at 60% area median income or below.

Housing capacity and economic growth assessments are currently underway among several groups, including the Metropolitan Washington Council of Governments (with both City Housing and Planning staff supporting this effort), the Urban Institute and the Greater Washington Partnership. Regional solutions and collaboration with Arlington will help amplify the City’s efforts, and Housing and AEDP staff are also part of a new Northern Virginia stakeholder group, convened by VHDA, to identify how the $75 million in REACH funds committed by VHDA to target housing needs related to economic development, should be programmed and prioritized.  Alexandria, in particular, will focus its efforts on the neighborhoods closest to National Landing – in particular, Arlandria – to work with neighbors to preserve community identity and existing housing resources and explore opportunities for the development of new housing assets.

While more information is developing about future jobs and their timelines related to HQ2 and Virginia Tech, and refining housing needs and impacts as well as the resources required to provide a range of housing options, Alexandria is preparing to meet housing needs through the following actions:

Key to the City’s success will be its efforts to leverage its resources, so that the additional $1 million per year proposed in the FY 2020 – 2029 CIP for housing related to economic development will produce an additional 20-50 committed affordable units beyond those already projected.  While supply is important in meeting housing needs overall, by itself, increased supply will not meet requirements for new housing affordability – Alexandria will continue to need to invest and plan for these units with the regulatory tools and incentives available as well as the new resources now being established.

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