- Amazon is splitting its second headquarters, known as HQ2, in two locations. Each may attract about 25,000 new workers who will earn an average of $US150,000 a year.
- The company wants to put half of HQ2 in Long Island City, or LIC – the western-most neighbourhood in the borough of Queens in New York City.
- Real-estate developers have rapidly built up LIC in recent years, and local leaders promised $US1.525 billion in subsidies and tax breaks to attract Amazon.
- But nearby housing prices continue to skyrocket. Many immigrant and working families in Queens are moving deeper into the borough and commuting farther to work to afford housing.
- Public transportation is also already overcrowded and roadways clogged with traffic.
- In the coming decades, climate change and rising seas will chronically flood parts of LIC and possibly bury it underwater.
After 14 months of speculation regarding where Amazon would seat its second headquarters, known as HQ2, the $US1-trillion company is splitting its new operation between Crystal City, Virginia, and Long Island City, Queens.
The decision became official on Tuesday.
“We are excited to build new headquarters in New York City and Northern Virginia,” Jeff Bezos, the founder and CEO of Amazon, said in an announcement on the company’s blog, Day One. “These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come. The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.”
I don’t share Bezos’ excitement about Amazon’s arrival in my community.
What I feel is dread.
I’ve called Queens home for most of my adult life. It is perhaps the most ethnically diverse urban area on Earth, and it’s also where I’ve built a career in journalism, stumbled out of and into love, discovered Kuala Lumpur-style fish-head curry, walked whole neighbourhoods without hearing any English, and am now raising my first child.
My family lives in a one-bedroom apartment near Long Island City (or LIC, as locals abbreviate it). Frequent dog walks and a westward view from our kitchen window have given us a front-row seat to the area’s radical transformation. When I moved here in 2007, LIC was a tangle of giant warehouses, crumbling parking structures, seedy night clubs, and mind-blowing graffiti.
Today it’s almost unrecognizable. An impeccable public park lines the East River waterfront, and views of Manhattan’s skyline – once easy to see from my street – have been walled off by gleaming, glass-covered condo towers.
I can see why Amazon would fix its gaze upon LIC and estimate a multi-billion-dollar boost to the local economy. The neighbourhood is a stone’s throw from Manhattan, sits fairly close to the city’s three major international airports, touches several subway lines, and offers space to build and grow. Also, New York City is an incredible place to live – and thus a great way to attract talented employees, as Bezos said.
My “not in my backyard” angst doesn’t come from a fear of change. An influx of skilled workers, a forward-thinking company, and increased tax revenue could fund a fantastic experiment in urban development.
Amazon could work with local leaders, developers, and city officials to create climate-change-resilient infrastructure, designate car-free zones, expand affordable housing, boost public schools, provide easier access to food and other critical amenities, generate a raft of high-paying secondary jobs around Amazon’s presence, and give some of the hardest-working (yet hardest-struggling) families in the city a chance to build intergenerational wealth.
Yet what I’ve seen, heard, and read suggests this is a dream. Instead, I expect to see deepening struggles for the working-class people who keep New York humming and arguably make it the greatest city in the world.
My fears are not just about taxes, public transit, and housing. They’re about the future of the city itself.
New York officials are giving tax breaks to a $US1 trillion company owned by the world’s richest person
Andrew Cuomo, the recently reelected governor of New York, fought hard to bring Amazon to New York City.
“I’ll change my name to Amazon Cuomo if that’s what it takes,” he told reporters earlier this month.
Jokes aside, Cuomo and other government officials pitched big tax breaks and subsidies to the $US1 trillion company founded by Bezos, who is the world’s richest person. One of those public officials was NYC Mayor Bill de Blasio, who said that Amazon “is very destructive to communities” – then, hours later, helped submit the city’s HQ2 proposal.
The details of these tax breaks became public in Amazon’s blog post on Tuesday.
The state is offering the company $US1.2 billion in tax breaks for bringing 25,000 jobs “with an average wage of over $US150,000” to the area over the next 10 years, Amazon said. That’s a $US48,000 cut in revenue to the city per new Amazon employee. In addition, the state is prepared to hand Amazon $US325 million for occupying about 4 million square feet of office space in LIC over the next 10 years.
Though creating jobs can boost income and sales tax revenues over the long run – perhaps by $US10 billion over 20 years, by Amazon’s estimate – those monies take a while to build up. The city needs cash now to keep its subways and workforce moving, let alone to further overhaul and rethink the system.
Public transit is already bursting at the seams, and traffic is a nightmare
As towers have sprung up in LIC and the cost of living has soared, many of my neighbours and working families are uprooting and retreating deeper into Queens, where they stand a better chance at affording housing or just scraping by. This gradual exodus is paired with what city demographers consider “remarkable” population growth for the borough – what could be double-digit increases in the coming decades.
These factors have brought ever-increasing demand for public transit, yet the city has not made adequate improvements quickly enough to meet it.
Overcrowded trains and buses in LIC and areas to its east are the norm during peak hours. More often than not, three fully crowded subway trains pass me by on their way to LIC and Manhattan before I can squeeze onto one. If you have small children, are pregnant, or disabled, rush hour is almost impenetrable.
Soul-crushing road traffic is also typical for LIC. The Queensboro Bridge (which has no toll, unlike a tunnel to the south) is typically clogged with vehicles entering or leaving Manhattan. This contributes to NYC being the third most traffic-congested and second most traffic-jammed city on Earth.
It’s hard for me to imagine how at least 25,000 or more new Amazon workers, even spread out over the next decade, would efficiently get to and from work during rush hour, especially if many of them move here from outside the city and add to the area’s surging population. The same goes for existing residents.
Amazon is reportedly ready to invest $US2.5 billion in HQ2’s construction in LIC over 10 years. Its goal is to secure “4 million square feet of energy-efficient office space with an opportunity to expand to 8 million square feet,” the company said.
In addition, Amazon said it “has agreed to donate space on its campus for a tech startup incubator and for use by artists and industrial businesses.” The company also plans to donate space for a new school and “invest in infrastructure improvements and new green spaces” through a Payment In Lieu Of Tax agreement. (Such agreements reduce corporate property taxes but are normally reserved for manufacturing, industrial, and non-profit companies.)
But even if Amazon poured its entire planned $US2.5-billion war chest into public transit, it’s hard to say whether it would make a big difference. One new subway station in Manhattan, for example, cost about $US4 billion.
Years of decisions by the city have led to this transit crisis, and it’s primarily up to our officials to fix it – especially now that they have successfully lured Amazon.
Queens housing costs are high – and they’re only getting worse
About half of Queens residents are immigrants. Many live in poverty; the median income here for a household – as in an entire family – was roughly $US60,000 a year in 2016. Rent can gobble up a majority of these families’ take-home salaries, and Amazon is almost certain to make this situation more difficult for lower-income households.
The median rent in Queens was about $US1,400 a month in 2016. (By contrast, the average New York state mortgage payment – which builds equity, unlike rent – was about $US1,300.) Today, studios or one-bedroom apartments in older buildings in or around LIC rent for more than $US2,000 a month. In LIC’s shiny new towers, such units cost north of $US3,000 a month, and two-bedroom units can run $US4,000-$US5,000 per month.
While many of the new buildings in LIC have some subsidized units, you must apply through lotteries to rent them. The process comes with significant income restrictions and it can take years before applicants get selected. Even if you’re picked, the “affordable” unit price breaks can be negligible.
The market to buy real estate is just as brutal.
When I moved to western Queens more than a decade ago, amid the Great Recession, one-bedroom apartments were listing for sale at about $US200,000. These apartments are generally 600-700 square feet, but some today sell for more than $US500,000.
Homes with two or three bedrooms, and maybe a driveway or tiny patch of grass out back, have grown even more out-of-reach for the vast majority of families here. Half-century-old properties – many of which require extensive and expensive renovations – are now listing for more than $US1 million, sometimes $US1.5 million.
Given these housing prices, Amazon’s workers will likely realise that even $US150,000 a year can feel small in this borough, let alone in Manhattan or nearby Brooklyn neighbourhoods, where the cost of living is even higher.
These are comparatively short-term concerns, though. Future generation will have a lot more to worry about.
How will Amazon deal with climate change?
Over the long-term, many working families in western Queens might secure a better future by packing up and leaving (if they can afford it). This is a conversation my wife and I have with increasing frequency as we plan for the long-term future of our family.
Climate change is here to stay, and its effects will get much worse and more disruptive in the coming decades.
Among other problems, hurricanes are getting rainier, slower-moving, and more devastating; areas of intense drought are expanding; wildfires are intensifying; and coral reefs that protect coasts from storms are dying.
But most relevant to Amazon HQ2’s long-term existence is the ceaseless rise of sea levels.
“A 2017 report from the National Oceanic and Atmospheric Administration suggested that, under the worst climate conditions, parts of New York – including parts of Long Island City – could be underwater by 2100,” my colleague Aria Bendix wrote earlier this week.
Even if this gloomy scenario does not come to pass, LIC’s current and future inhabitants must anticipate increasingly powerful storm surges and chronic flooding. It’s not yet clear if Amazon leadership is taking these climate-related risks into account, and if or whether they intend to work with local officials in New York to plan for and combat those problems on a decades-long scale. (The only mention of “climate” in Amazon’s announcement was “business climate.”)
Barring an all-out effort by the city, state, and federal government to control or at least mitigate these looming environmental problems, building in LIC seems like a questionable long-term investment for Amazon; it is likely going to be a future epicentre for climate change refugees.
It’s unfair to single out Amazon alone when talking about this long-term threat, of course.
As individuals and a society, we all need to stop pretending that climate change won’t affect the homes, cities, and infrastructure we are building for future generations. It will, and itis, and our collective short-sightedness is what worries me most of all.
This story has been updated. It was first published on November 9, 2018.