As Amazon continues its search for a second city for headquarters to call home, or HQ2 as the project has become known, Indianapolis remains in the running and recently a couple studies took a look at some of the effects landing Amazon’s HQ2 deal would have on the Circle City. BAM looked into recent research to see what it might look like if Amazon and its projected army of high-paid employees moved in.

Rental Rates Might Not Move…

One interesting effect that landing the coveted HQ2 deal could have, according to one study by Zillow Group, is that unlike in many other metro areas, apartment rates in Indianapolis may remain either unaffected or actually decrease. The theory behind the surprising data is that in Indianapolis, unlike other cities on the list, the housing market is more affordable (as is the cost of living) – and many well-paid Amazon employees might decide to forgo the rental market for home ownership. For comparison, according to Zillow if Nashville wins the Amazon deal, they could potentially expect to see rental rates double (in comparison to what Zillow would expect in the same time frame without the Amazon HQ2). 50,000 workers are anticipated to move over a roughly 7.5 year time frame to whatever city is eventually chosen for the secondary headquarters. While this number is taken into account, the study admittedly does not take into account the support businesses and workers that may likely flourish in Amazon’s shadow, as they have in the current headquarters of Seattle.

Possible Apartment Construction Boom

The aforementioned Zillow Group study notes that historically Indianapolis has been responsive to housing needs and built accordingly. A recent article that appeared on local Fox59.com references a new study by HotPads, a division of the Zillow Group, and cites data suggesting that should Indy land HQ2, they’d need to embark on a plan to build a significant amount of new apartments. This study also notes that it would take approximately 7.5 years to build up to the full number of anticipated Amazon employees, during which time Indianapolis would need to add 1,960 apartments each year! According to the Fox59 piece, Indy currently has apartment inventory of 14,000 units from the metro to Anderson with a median rent of $1,235/month. The HotPads data asserts that the Circle City would have to nearly double rental inventory by adding 13,700 units within 7.5 years time. This also doesn’t factor in single-family housing construction, which the other Zillow study also referenced, and mentioned Indy was traditionally well-qualified to provide. Between multifamily and housing construction, the HQ2 deal could produce a major building boom in the city.

And the Winner Is…

Until Amazon announces which city they choose, it’s all currently speculation (although speculation by experts). Zillow surveyed over 100 housing experts and they ranked Atlanta and Northern Virginia as two possible winners. According to the Fox59 piece, little is known about the bid for Indy’s shot at HQ2; however, many companies have chosen the city thanks to location and shipping infrastructure.

BAM Bottom Line: Amazon will announce their pick for HQ2 later this year. Should Indy win the honors, we’ll be looking at a 7.5 year influx of 50,000 workers and likely more with businesses/workers that support the retail giant. According to these studies, the Circle City would likely see a building boom although rental rates could be a bust.