By Svenja Gudell
Seattle has one of the strongest housing markets in the country, with home value and rent growth consistently topping nationwide rankings in recent years. A strong local labor market has been an important driver of this growth, with the area being home to some of the country’s most dynamic companies, including Amazon and Microsoft (and, ahem, Zillow). Companies based elsewhere, such as Facebook and Google, have been increasingly drawn to establish satellite offices in the region.
The neighborhood of South Lake Union – home to Amazon’s headquarters – has been the epicenter of this jobs boom. Over the past decade, the area has transformed from a low-rise, post-industrial district to a cluster of high rises and amenities catering to service sector workers (e.g., coffee shops, kale salads, and yoga studios).
South Lake Union and adjacent areas are home to the highest concentrations of people who work in South Lake Union, and they have seen the largest growth in numbers of residents who work in South Lake Union – an area where the employment landscape is dominated by Amazon.
As of 2015, three out of every 200 employed adults who live in South Lake Union also work in South Lake Union, the highest density of such employees across the Seattle metro. In parts of Belltown, Capitol Hill, Lower Queen Anne, Interbay, Fremont and Ballard, one to two out of every 200 employed adults works in South Lake Union.
Seattle metro census tracts with larger increases in the number of South Lake Union workers between 2011 and 2015 saw larger rent increases (on a per square foot basis) over the same period.
For the average census tract in the Seattle metro, the South Lake Union jobs boom has been associated with faster annual rent increases between 2011 and 2015 of around $0.01 per square foot (or about $5 per month on a typical 650 square foot 1-bedroom apartment). Rents per square foot increased by about $0.05 per year on average over the same period metro-wide. So for the average Seattle metro census tract, the South Lake Union jobs boom only explains a small portion of rising rents in recent years.
The relationship is stronger looking only at census tracts within the city of Seattle. For the average census tract inside the city of Seattle, the South Lake Union jobs boom has been associated with faster annual rent increases between 2011 and 2015 of around $0.07 per square foot (or about $44 per month on a typical 650 square foot 1-bedroom apartment). Rents per square foot increased by about $0.11 per year on average over the same period city wide.
Read more — and check out the charts — at Zillow Research.
Syndicated from Forbes.com