Without Amazon HQ2, What Happens to Housing in Queens?

After Amazon named Queens one of the winners of its reality-television-style competition to build a second headquarters, real estate in Long Island City flipped upside down. Overnight, a sluggish buyer’s market became a seller’s paradise. Real estate firms reported sales of many times their usual volume. Stories of brokers selling units sight unseen via text tickled developers, even if other New Yorkers greeted the news with terror.

Now that Amazon is breaking off its engagement with the Big Apple, the passion that stoked the HQ2 buying frenzy has evaporated. So what happens next for Long Island City and neighborhoods nearby? Some residents think that Queens dodged a bullet: Jeff Bezos’s prosperity bomb would have terraformed the neighborhood, they say, driving out longtime residents in favor of soul-cycling engineers. Instead, Queens faces a different problem: the status quo, which might be more daunting than the worst-case scenario under Amazon.

Not everyone believes that Amazon’s non-arrival will mark a huge change in course for Queens. Long Island City “is not a neighborhood based on Amazon,” says Brendan Aguayo, a senior managing director at Halstead Property Development Marking, which sold two units in a Long Island City condo building to Amazon employees within a week of the first HQ2 announcement. “For all the reasons they decided on [Long Island City] to begin with, we are confident the neighborhood will thrive well beyond when this fades into the background.”

Neither he nor Lauren Bennett, a Corcoran broker who sold five units in Long Island City after the news of Amazon’s arrival, would say whether their HQ2-connected clients had expressed any buyer’s remorse. One unit in Bennett’s portfolio—a three-bedroom condo on 51st Avenue that had languished on the market for eight months without an offer—became the object of a bidding war after the mere rumor of Amazon’s move to Queens. The New York Post reported that the winning bid was $300,000 over the initial offer and above the $1.49 million asking price. (Bennett declined to answer questions about the status of this sale or others.)

But plenty of brokers feel far less optimistic than Aguayo. One told Bloomberg that Long Island City, which anticipated a transformation into a tech hub, was fated to remain a bedroom community for Manhattan commuters. Nancy Wu, an analyst for StreetEasy, said in an email that the turnabout highlights the risk involved with speculative investment in New York. “Now that the company has decided against setting up their new headquarters in Queens, we expect asking prices and buyer interest to fairly quickly revert back to their pre-announcement levels,” she said.

Before Amazon announced its plans to move into Queens and kicked off a gold rush, local sales were stagnant. Sellers were slashing prices. Inventory was overbuilt: up 62 percent in October 2018 over the same month the year prior. Before the rumor of HQ2, it looked like it would take years for this housing market to return to a point of equilibrium.

Brokers who stood to make a mint in a buoyant market are frustrated by Amazon’s reversal, of course. But so are some of New York’s most vulnerable residents. Presidents of the tenant associations for four New York City Housing Authority public housing developments in Queens issued a statement condemning the leaders who they believe drove Amazon away from the bargaining table.

“New York has now lost 25,000 good-paying jobs,” reads the statement from the presidents of the Astoria, Queensbridge, Ravenswood, and Woodside Houses tenants associations. “The City and State will now lose tens of billions of dollars in revenue that could have been invested in NYCHA, and the tenants we fight for every day.”

Their letter highlights a central tension to the Amazon drama. Tenants of low-income housing broadly supported the move, in the hopes that it would bring higher-paying jobs and spillover effects to the neighborhood. More affluent residents, meanwhile, mounted a NIMBY campaign over the prospect of rising rents. Tyquana Rivers, a Democratic political consultant, told The New York Times that the gentrifiers’ complaints about Amazon mirrored the fight to keep Ikea out of Queens. Indeed, residents in Jackson Heights are going to court to stop a Target from opening.

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