Cities are in a vicious, $5 billion battle over Amazon's headquarters -- here's why they're crazy

  • Amazon is planning a new headquarters as big as its Seattle flagship.
  • Cities from Boston to Chicago are reportedly vying for the chance to host Amazon.
  • But a recent column highlights some of the drawbacks for local cities of opening the giant HQ.

Cities across America are vying to be chosen as the site of Amazon’s new headquarters, but the opportunity also comes with some drawbacks.

Los Angeles Times columnist Michael Hiltzik writes that Amazon is taking advantage of the local communities that are putting together bids for the $US5 billion, 50,000-job facility.

“The company’s approach is arrogant, naive and more than a teensy bit cynical,” Hiltzik writes. “Rather than be offered bribes to move its headquarters into a community, Amazon should be made to pay for the privilege.”

Hiltzik also points out that existing local businesses will face consequences for hosting Amazon.

“Communities that boast of relatively modest costs of living and reasonable labour costs as come-ons should recognise that Amazon’s arrival will push up land values, and therefore the cost of housing and office space, and produce upward pressure on wages,” Hiltzik writes. “That’s good for workers, not so much for existing employers.”

Amazon’s existing headquarters in Seattle has certainly caused some tension, with some local residents calling the effects on traffic and housing prices “Amageddon.”

According to the most recent analysis by Inrix, Seattle drivers spent an average of 55 hours stuck in traffic in 2016, placing it among the top 10 worst US cities for congestion, Business Insider’s Madeline Stone reported in April.

CityLab reported in 2015 that there was also a slight gender disparity in Seattle — about 1,068 single men for every 1,000 single women.

Rents have also increased with the demand, reaching an average in downtown Seattle of $US42.08 per square foot, compared with $US39.79 in 2015 and $US31.38 in 2009. Rising rents could pose a challenge to small businesses and young startups searching for office space.

Bloomberg reported that Boston was the frontrunner for the new headquarters, a claim that Amazon subsequently denied. Cities like Chicago and Denver are also reportedly in the running.

But hosting Amazon might not be all it’s cracked up to be in the long-term.

Madeline Stone contributed to this story.

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