Reality starts to sink in for Amazon HQ2 finalists
Worried residents say housing prices, gridlock would be unbearable
SAN FRANCISCO – Landing Amazon’s $5 billion new headquarters and its 50,000 tax-paying workers would be quite the coup. And possibly quite the headache.
Officials and civic organizers in some of the 20 cities now vying to win Amazon’s choice for its second headquarters are sounding alarms that accommodating this tech talent invasion could put a big strain on local residents already grappling with crawling commutes and high housing prices.
In Nashville, some residents were blunt about how a new Amazon headquarters and its well-paid workers could drive up both the prices for rental units and homes alike, exacerbating housing problems. “We have a housing crisis now, and all this would do is throw gasoline on the fire,” says John Summers, a former city council member who leads the Coalition for Nashville Neighborhoods. “We cannot build affordable housing to replace what’s being lost by the rapid gentrification in all of our inner-city neighborhoods.”
Some don’t even seem to mind if Amazon picks another suitor. Just days after Denver made the finals, Colorado Gov. John Hickenlooper told the City Club of Denver that if billionaire CEO Jeff Bezos didn’t choose the Mile High City, “I’m not going to cry,” according to The Denver Post.
While Hickenlooper later clarified that he was excitedly pursuing the headquarters because he felt it was the right thing for the city and state, he allowed that some citizens would feel “a sense of relief if they choose somewhere else because there are a lot of challenges and lot of hard work we will be avoiding.”
In sprucing up their Amazon bids for Bezos, cities ranging from Atlanta to New York will need to take an honest look at whether housing stock and public transportation — both critical to a winning bid — are up to the HQ2 challenge.
While cities such as Boston and New York are well-known for their efficient public transit systems, both suffer from aging infrastructure and struggle to
“We have a housing crisis now, and all this would do is throw gasoline on the fire.” John Summers Coalition for Nashville Neighborhoods
keep up with existing demand.
Boston has been trying to find a solution for its growing traffic problems in part by efforts to link its commuter rail lines, says Barry Bluestone, professor of public policy at Northeastern University. “Our town has the talent (to win the bid) ... but we have to find a way to move these new workers,” he says.
That’s a concern shared even by fans of the Washington, D.C., area’s three finalist bidders. Richard Bedrick, a graduate student studying real estate development at the University of MarylandCollege Park, says that while he is excited D.C., northern Virginia and Montgomery County, Md., are all in the running, the traffic implications of a win make him pause.
“D.C. has enough (traffic) as it is,” Bedrick says.
Those sentiments are echoed among some in finalists such as Miami, Raleigh, N.C., and Los Angeles, which already is notorious for its gridlock.
Business owner Mina Lee grew up in Montgomery County, home of wealthy D.C. suburbs such as Bethesda, and says she is “super excited” about the “great opportunity” of hosting HQ2. But at the same time she is concerned that a flood of new young workers and their families could cause overcrowding in schools.
There are similar concerns in Nashville.
“You’re starting to see, I think, resistance and pushback to this continual grow, grow, grow, grow at any cost,” Nashville neighborhoods advocate Summers said.
The poorest residents of these bidder cities are likely to feel the biggest impact of HQ2, as Amazon employees boasting six-figure salaries accelerate neighborhood gentrification and price out existing residents.
“People here are enthusiastic about the benefits (of Amazon’s HQ2), but those economic benefits often miss our most vulnerable citizens,” says Daniel Brisson, executive director of the Burnes Center on Poverty and Homelessness at the University of Denver.
Some cities are already behind when it comes to housing stock. Bluestone has been helping to assemble the Greater Boston Housing Report Card for 15 years. The latest score notes that even without HQ2, “Boston needs a minimum of 160,000 more housing units by 2030, and we’re not producing that at the required rate.”
Such statistics indicate that the winning city must brace for “two tales — one about winners and one about losers,” says Javier Vivas, director of economic research for Realtor.com.
“These things push up home values based on increased demand, which is great for some folks, but it’s not great news for existing residents hoping to get into the housing market who aren’t on Amazon salaries,” he says.
Smaller, less developed markets such as Raleigh and Columbus, Ohio, are likely to better cope with 50,000 new tech workers than larger, housing-constrained cities such as Denver, Boston and New York, Vivas adds.
The prospect of HQ2 coming to the City of Angels led resident Lisa Connolly to write a pointed letter of warning to the Los Angeles Times.
“Amazon’s cannibalization of Seattle’s real estate market … would exacerbate an already unsustainable situation,” she wrote. “If we want Los Angeles to become the next San Francisco, this is a surefire and irreversible way to accelerate the process.”
Contributing: Elizabeth Weise, Trevor Hughes, Brett Molina of USA TODAY and Jamie McGee and Lizzie Alfs of The (Nashville) Tennesseean