Amazon has been sniffing around my town, looking to plant a new distribution center. The latest attempt has been rejected roundly by nearby residents, but it got me to thinking: would it raise or lower a home’s value to have a big distribution center nearby, say within a few blocks?
I would suspect that it would lower home values. Who wants to live within a few blocks of a major distribution center with commercial vehicles coming and going all day long.
They probably aren’t going to be zoned in to have housing within a few blocks. That’s not the case with the distribution center in my parent’s town anyway.
1 data point, my parent’s house was bought for $330K in 2006, 2 years before the housing bubble crash (imo, they overpaid). Amazon moved in in 2012. Their house according to zillow is now worth $351K. Obviously correlation does not equal causation but it’s hard to argue that it decreased their home’s value.
Anyway it would seem to me you could zillow around distribution centers, look up when they came to town, find pre-existing homes and get an idea that way.
It really depends on the location. If it’s zoned industrial already, some other big business with trucks is going to move in anyway.
If there’s a vote to change a parcel to industrial from something else, be it residential or business, then yeah, that would affect home prices.
There’s a distribution center near me in the next town over. Their city income tax coffers overflow with money from that. And since the damn thing is right on the corner next to my city, the trucks drive through HERE to get to the freeway, using our roads with no tax money at all. That SUCKS from a governmental revenue/expense standpoint but still doesn’t have much impact on our home values.
The one near me, as well as the one they’re building near me, I practically on top of the freeway. Also, while they’re in residential areas, they seem to be in the areas that are the least populated and/or surrounded by other big businesses.
I couldn’t tell you what it does to property value, probably about the same as any other large distribution center. Sure, no one wants to live across the street from it but, on the other hand, it’s suddenly dropping 1500 jobs, so people will move to the area if they can find work there.
Something else to think about is that these places are massive. Like, really, really huge. The one by me is about 1.5 million sqft and the one they’re building is supposed to end up being over 2.5 million sqft. and hundreds of acres between the two of them.
I know people are concerned for their own homes losing value, but you might have to find a different way to word it if you talk to the city about since they’ll still come out ahead. What they’ll lose in your homes’ property taxes, they’ll more than make up for having a giant building on otherwise unimproved land.
we have one opening soon in our area and it’s next to I-40 in an industrial area so there is no worry about home prices. They say it will employ 1500 people along with robots.
Simple economics.
It brings in 1500 jobs.
People want those jobs.
People don’t want to commute.
Housing close to the plant becomes desirable, increasing its demand.
Increased demand means the price goes up.
Really, really simple.
Lots of assumptions there. Where I’m at, the housing surrounding industrial/manufacturing areas that has a lot of jobs tend to be less pricey neighborhoods. More expensive housing stock is generally away from these areas. I don’t think people desire living near the plant they work at as much as you think they do.
You confuse desirable pricey neighborhoods with desirable working class neighborhoods.
Many Amazon workers are paid so little they qualify for Food Stamps.
They won’t be able to buy a house on that income! So not much effect on the housing market.
Perhaps, but I don’t think it’s quite as simple as the equation given above. I live in a mixed working class/white collar neighborhood, and there is a lot of pushback against having a warehouse distribution center developed directly north of here (in a clearly blue-collar neighborhood.) Much of the concern is pollution and traffic, and the neighborhood where it’s being proposed, in addition to our neighboring neighborhood, seems to be largely against it. We don’t need more traffic and pollution here. I don’t think at all is is “simple” to say home prices will rise.
This is key. If the neighborhood around the center in the OP is pricier then it’s a negative. If it’s a distressed area with several vacant houses, then it’s a plus.
I was originally going to suggest that, but the interesting thing is the distribution center proposed (actually, I should say “passed.” Looking up more info, it seems to be a done deal – I thought it was still in the proposed stage) near my neighborhood is getting significant pushback from the neighborhood that is, in fact, a good bit below the national household income, and 34% of its residents live beneath the poverty line. Yes, it would seem this is the place where a distribution center would perhaps raise home values, but the neighborhood sentiment is not that welcoming to the distribution center. Once again, I don’t think the economics are that simple. There’s a lot of variables that go into this. At any rate, despite the pushback, it seems the distribution center will be built (the previous alderman voted for it, the current one is against it, but it all passed city council and they got city money), so we’ll see what it does to home values around here.
You are assuming those are long-term jobs. Are they?
Do people really stay in these jobs long enough to want to move and buy a new home?
No. But they rent. Buying homes to rent to those workers is a very good investment.
Oh, and I should say, personally, in this case, I think it will have little effect on the surrounding housing prices, either good or bad.
It seems like the traffic issue would be a legit concern if it’s truly in the heart of housing area. But just because it’s a legit concern about possible traffic impact doesn’t mean it would have a negative effect on housing prices. The people are responding to change in their environment but the market would probably respond more to the availability of jobs.
I know most of these jobs are minimum wage but not everyone has one of these jobs as the primary family income, it could be secondary or a young person with no dependents, so I think the market (people buying houses) would on average view it as a net positive.
Are trailer parks springing up near any distro centers?
Do we have age or dependents breakdowns of Amazon distro workers?
There’s the Amazon CamperForce. Yes, it’s real.
There is a large distribution centre not far from my house - maybe a ten-minute walk. There are several other large and medium-sized businesses there too so it’s impossible to tell what impact they have on house values. Schools are much more important to most home buyers and we benefit from having two highly rated schools within walking distance.
What is also important is that the goods traffic to and from the industrial units is routed well away from us so it has no discernible effect.