As the dozens of cities lustily bidding for Amazon’s second headquarters parade their smart citizens, housing capacity, transportation connections and tax breaks this week to lure Jeff Bezos’s empire, the sometimes painful housing-market lessons of Seattle — the e-commerce giant’s home base — has become a factor of its own in this race.

The housing market must be a major consideration as metro areas march forward in their pursuit and Amazon makes its pick, say real-estate experts, especially as it relates to Amazon’s AMZN, -1.78% impact on job creation and the local economy, its probable boost to demand for diverse housing types for young and experienced workers alike, and the tension between homeowners sitting on higher home values versus the buyers and renters pushed entirely out of the market.

There’s little doubt that securing the bid for the second Amazon complex, which the company pledges will bring a $5 billion investment and 50,000 jobs, would be a “major win” for the lucky city, said Lawrence Yun, chief economist with the National Association of Realtors. But there will be housing-sector winners and losers as a result, he said.

Amazon HQ2: Curse or Curative?

Proposals to Amazon were due Thursday, and the pomp coming with some of the highest-profile packages has included Manhattan’s alighting the Empire State Building in Amazon orange, and other aggressive tacks, including New Jersey’s reported pledge for a massive $7 billion in tax incentives to bring “HQ2” to Newark. Chicago Mayor Rahm Emanuel and Illinois Gov. Bruce Rauner, not always so chummy, huddled to form a no-fewer-than-600-person committee to support their bid, the Chicago Tribune reported.

Analysis: MarketWatch screens reveal cities that meet the stated criteria for Amazon’s second headquarters

Real-estate economists are crunching the good and bad (note: there’s more in the “good” column) that could come with scoring this high-profile expansion of an Amazon whose arguably creative destruction of retail continues to change the commercial and residential fabric of most of the cities doing the wooing.

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The housing-market change in the Seattle area, which places six companies among the Fortune 500, including Microsoft MSFT, -1.24% in the suburbs, has been notable. In the seven years since Amazon concentrated its headquarters in that city’s South Union neighborhood, home prices in the city have surged by 83% and rents by 47%, according to online real-estate marketplace Zillow, also based in Seattle.

In general, tech-job-driven upward pressure on wages has yanked real-estate prices along the same path. Earlier this year, in one of Seattle’s hottest neighborhoods, homes went for a median price of more than $1 million. It was the first time on record that had happened in the city or its surrounding suburbs, according to the Seattle Times. Seattle’s median home price is $700,000, double Chicago’s median of $306,750, for instance.

Who will work at the new Amazon location, and where will they live?

Keep in mind that if the online retailing colossus brings 50,000 high-paying jobs to the winning city, it won’t necessarily generate 50,000 home sales or apartment leases right away, as some portion of the jobs presumably would go to people who are already in place.

But “homeowners [looking to cash in on an increase in demand] need to position themselves and their homes to take advantage, as there will be a boost in values,” said NAR’s Yun. “People who will feel left out will be those forced out by higher rents, and pushed out further into outer suburbs, the one negative side-effect of major high-paying jobs coming in.”

Real-estate experts often point to the long commutes faced by employees in Silicon Valley and in the San Francisco Bay Area more broadly. But Yun said the tech revolution for cities is largely a boon for real estate. He pointed to Portland, Ore., and its “high unemployment rate just 10 years ago, with an economy still very reliant on lumber,” contrasting that situation with the Portland that exists today: “Its economic diversification leaves it a vibrant city with vibrant restaurants and a lifestyle that’s a point of pride.“

If Amazon takes a similar approach to its Seattle pick, it may opt for an HQ2 location that gives its office and the home choices of its workers a decidedly urban or downtown-fringe feel, said Ralph McLaughlin, chief economist with real-estate site Trulia.

Its future workers, especially millennials, might desire ample inventory of condo developments and town houses, perhaps even over urban high-rises and over far-flung suburban options, when it comes to housing choices, he said. Other real-estate experts have said that an urban choice with suburban housing options will be optimal in terms of lessening housing stress on the area. For instance, Baltimore and Pittsburgh have suburbs that aren’t as developed as New York’s or Boston’s.

Housing-market price pressure for the Amazon winner will be impacted by how flexible zoning and planning policy is, so that construction, or even adaptive reuse, can keep up with new demand, real-estate experts said.

A large driver of surging housing prices in Seattle can be linked to its slow policy response. “The city is backed up on permits,” said Matt Goyer, a real-estate broker and founder of Urbnlivn, a Seattle real-estate blog. “Developers are eager to go but end up delayed for months because of delays in the city government.”

In all, researchers at Apartment List, which studied 15 metro areas contending for Amazon’s second headquarters, have predicted the Amazon effect alone will add an average of 2% to rental costs on top of any projected non-Amazon-related increase.

Commercial real estate will no doubt be impacted, as well. With total Amazon spending on real estate reaching nearly $4 billion, the company now occupies 8.1 million square feet of office space spread across 33 buildings in Seattle, according to Seattle Times research, the largest footprint by both raw area and percentage of any single company in any single city. In the last three years, Amazon had gone from occupying 9% of the city’s prime office space to 19%.

And therein lies another lesson: With industry concentration, such as that taking form in Seattle, comes risk. According to the most recent office-market snapshot from Green Street Advisors, a real-estate analytics firm, there’s longer-term risk in Seattle’s dependence on a handful of tech clients, although in the nearer term demand is forecast to remain robust, fueled by strong income growth and the desire for high-end office space, Curbed reported.

It’s also true that with Amazon will come presumed expansion of the service industries that support Amazon’s business. Chicago officials, for one, have said they believe that each dollar Amazon invests in construction and operations would generate an additional $2.72 for the area economy, based on an analysis by World Business Chicago, the city’s economic-development unit. Other cities have forecast similar multiplier effects.

Handicapping the contenders

Other big cities reportedly in the hunt include Atlanta, Philadelphia, Denver and Washington, while dozens more smaller metro areas want to be considered, too. Amazon, which bought Austin-based Whole Foods Market Inc. for over $13 billion this year before announcing its HQ expansion beyond Seattle, said in its release detailing the search criteria that it will only consider metro areas with a population of at least 1 million people and an international airport offering at least some nonstop flights to Seattle.

NAR’s Yun said he sees pretty good odds for North Carolina’s so-called Research Triangle, comprising Raleigh and surrounding university cities. He also thinks the excess building capacity of trendy Nashville, Tenn., positions it well, he said. Amazon may also opt for the D.C. suburbs of northern Virginia or the outer-ring suburbs of Boston to take advantage of university resources of the nearby cities while embracing the ability to stretch out and create a campus-style headquarters.

Anderson Economic Group, an East Lansing, Mich.–based consultancy that has worked with automobile manufacturers and companies in other industries, said that big, “old-meets-new economy” cities can’t be ruled out. In a recent report, it ranked the most likely candidates in this order: New York, Chicago, Los Angeles, Boston, Atlanta, Washington and Philadelphia, giving higher weighting to the depth of local labor pools, including in the secondary services industries that will support Amazon: legal, financial, engineering and advertising.

These cities could lose points on a cost-of-doing-business basis. However, a downtown Chicago address has proven attractive for recent moves by corporate giants such as Conagra CAG, -0.71% , ADM ADM, -0.27% and Caterpillar CAT, -0.96% , that have or will soon abandon their longtime, small-town homes. McDonald’s MCD, -1.03% is even quitting the Chicago suburbs for the city, as United Airlines had done previously. Chicago, additionally, prevailed over Dallas, Denver and others in the nationwide competition for Boeing’s headquarters when the aerospace behemoth opted to decamp from Seattle in 2001.

Trulia’s McLaughlin thinks transportation will be a huge determinant, he said, with strong transportation plus tax incentives an almost unbeatable duo. That bodes well for Chicago and the major East Coast cities, including the New York area, Boston and Washington.

Some observers give pretty good odds to Denver, believing its civic culture is a good complement to Seattle’s home base. But McLaughlin questioned its already surging cost of labor and its weakness as a transportation hub, especially as Amazon looks to expand its global markets. That bumps up in significance the offerings of Midwest or East Coast locales, where declining populations could actually be leveraged into an attractive package for Amazon: Housing costs are lower and politicians have an incentive to sweeten any deal with tax breaks for Amazon as they look to stem population outflow.

Amazon’s pitch and the local political pitch to taxpayers center on the fact that Amazon’s market share “could mean decades of guaranteed employment for an area,” said McLaughlin. That’s especially enticing for areas in the Northeast corridor or the Rust Belt that are losing population, he said.

How can Amazon help maintain a housing mix?

But some urban-policy and housing experts think tech giants can be more villain than savior, even for struggling communities.

Richard Florida, editor at large of the Atlantic’s CityLab, wrote in a commentary that the future of tech-driven housing diversity in U.S. cities rests in large part on a willingness of businesses to be good neighbors.

Tech outfits should invest alongside local governments and nonprofits to provide subsidized affordable housing for local residents, as well as workforce housing for their own service workers who otherwise endure long and arduous commutes, Florida said. And they might consider giving up the private shuttle services meant to ease the burden of those commutes and instead invest in better public transit for all.