Having a tech company like Amazon, Apple and Google move into your neighborhood is both a blessing and a curse. The blessing: an influx of steady, well paying jobs and gentrified restaurants. The curse: the demand on housing and the imbalance of buying power between tech employees and the teachers, fire fighters, and other non-tech-related professionals that were there first.
Even the suggestion of a tech company moving into a market can cause real estate to surge. Just ask Long Island City, New York. Amazon announced plans to build a second headquarters but pulled the plug on the idea shortly after when it could not get along with local lawmakers. Just the announcement of the headquarters caused real estate to surge before even a single brick had been laid on the building. Fortunately, that surge of enthusiasm stuck around long enough to create lasting demand in that urban area. But it could easily have gone the other way towards an implosion and clearly other market forces are at work.
Concentrations of educated and well-paid tech employees does create an imbalance of buying power that tech companies cannot quite reconcile. Now Amazon is moving forward with plans for headquarters in Northern Virginia and has agreed to contribute $20 million toward affordable housing in the area to help with what they anticipate will be an impending imbalance.
Does this mean you should rush to invest in any town a tech giant announces a presence? Clearly not if Amazon’s Long Island City just-kidding news teaches us anything. But I won’t pretend that we don’t watch these markets closely. I like to see established job centers rather than nascent ones. I like to invest in towns with distribution centers where more steady jobs exist, less prone to bubbles and income spikes. One could say I like the boring stuff over the flashy stuff. But that’s not to say I don’t partake of gentrification by way of the great new restaurants that always follow when Google, Apple, Amazon and the likes move in!