Why NYC should hope it loses Amazon's HQ2 sweepstakes

Amazon's Seattle headquarters, featuring a pair of glass domes in the foreground
Amazon's Seattle headquarters, featuring a pair of glass domes in the foreground
Amazon's Seattle headquarters

Why NYC should hope it loses Amazon's HQ2 sweepstakes

The case against Amazon for the Big Apple is easy.
January 24, 2018

Amazon announced last week that it had winnowed the 238 cities that applied to host its $5 billion second headquarters and its 50,000 employees to 20 lucky finalists. New York City was among them. But, as a former resident of Brooklyn and the Hudson Valley now living in Seattle, I will warn New Yorkers that they should hope they don’t become home to Amazon’s second headquarters – unless they think New York isn't expensive and traffic-clogged enough already.

The case against Amazon for the Big Apple is easy: Just look at what has happened to Seattle. Antipathy to Amazon has palpably grown during the two years I’ve lived there, as Amazon’s vertiginous growth has made Seattle the country’s largest company town and fueled Seattle’s status as the fastest growing city in the U.S.

That population boom has led to runaway housing prices, with the median single-family home in Seattle now costing $725,000. The Seattle metro area has led the nation for 14 straight months as the region with the fastest-growing home prices. Once-bohemian enclaves like Capitol Hill, a refuge for the LGBT community, have become million-dollar neighborhoods filled with post-college frat boys employed by tech companies. With lower-wage workers pushed out to the fringes of the city and lacking adequate public transportation, Seattle area traffic has reached epic proportions. Ironically, it is these problems, partly of Amazon’s own making, and the backlash among longtime Seattleites that has spurred Amazon to look elsewhere for its expansion.

With its population at an all-time high, New York City is bursting at the seams, facing more dramatic infrastructure challenges and insoluble housing affordability dilemmas than Seattle. Adding 50,000 highly paid Amazon employees to the mix will only exacerbate the city’s troubles before it can fully fix them.

With the nation’s second-most-expensive housing market – behind tech-saturated San Francisco – rent-burdened New Yorkers cannot afford to have Amazonians with six-figure salaries flood the city’s rapidly gentrifying neighborhoods. While Mayor Bill de Blasio’s affordable housing plan is helping, rents are rising twice as fast as wages. Those not fortunate enough to live in rent-controlled or rent-stabilized apartments will have to compete against a sudden influx of affluent techies. In Seattle, Amazon’s growth has contributed to worsening inequality and its inherent tensions; in New York, inequality is already extreme, as Manhattan is the nation’s most unequal county.

And how will all those Amazon employees get to work? New York’s economic development team proposed four sites: the Financial District, Hudson Yards, Brooklyn’s “tech triangle” of Downtown Brooklyn, Dumbo and the Brooklyn Navy Yard, and Long Island City in Queens. Any one or a combination thereof would generate many more subway trips at a time when the system is in crisis.

Flush with cash in their pockets, Amazonians are likely to opt for comfort and convenience over cost concerns. If the subway proves unreliable, many will commute by taxi or use ride-hailing services like Uber or Lyft. That means more demand for vehicle traffic on surface streets, which already crawl at an average speed of 4.7 miles per hour in the midtown Manhattan core. The state’s recent Fix New York City panel report points out that New York has the third-worst traffic of any city in the world.

If The New York Times is saying “the city is choking on its own growth,” then the last thing the city needs is another 50,000 highly paid imports from across the country sporting Amazon badges, roaming the streets and accelerating the disappearance of small locally owned business and neighborhood character. Residents of Manhattan and gentrified Brooklyn are already watching every bodega, independent bookstore or diner be replaced by a Starbucks, CVS or Citibank branch. None of them are calling for faster increases in commercial rents leading to more homogenization of New York’s diverse culture.

Across the Hudson River, the surprise inclusion of Newark, New Jersey, on Amazon’s shortlist has excited Mayor Ras Baraka. Brick City could definitely use an economic shot in the arm, but it’s highly questionable how much Amazon would directly benefit residents. Despite the city’s much-ballyhooed renaissance, a report last year from the New Jersey Institute for Social Justicesaid that only 10 percent of Newark jobs earning $40,000 or more per year belong to city residents. Amazon has a voracious appetite for skilled tech talent, and if it doesn’t find those people already living in Newark, then the company will import them. While Newark residents would see a significant benefit in the multiplier effect, the arrival of Amazon would also spell the end of $1,000 per month one-bedroom apartments in a city that has been a bastion of affordable housing for African-Americans, Latinos and recent immigrants. If Amazon were in Newark, it’s also possible that many of its employees would choose to live in New York City and reverse commute, exacerbating New York’s housing and transportation woes without getting much of the company’s economic benefit. So perhaps well-meaning New Yorkers might want to root against Newark even more than their own city in the Amazon sweepstakes.

Amazon is notoriously stingy in its hometown when it comes to philanthropy. So as Amazon plays cities across North America against each other for more lucrative public tax incentives, it shows no signs of having matured into a corporate citizen that believes in equitable growth. New Yorkers take it from a Seattleite: This is one competition you want to lose.

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Gregory Scruggs
is a correspondent for the Thomson Reuters Foundation and a coordinator of the Puget Sound chapter of the Solutions Journalism Network.