Amazon could detonate a gentrification 'prosperity bomb' in the mystery city of its new US headquarters

Amazon seattle biosphere domeMatt Weinberger/Business InsiderConstruction of Amazon’s biospheres at its headquarters in Seattle, Washington.
  • Amazon opened a bid for North American cities to host a new $US5 billion campus, and nearly 50 cities have expressed interest.
  • Amazon claims its second headquarters would create 50,000 jobs in the to-be-determined city.
  • Some residents worry that the Amazon headquarters would spur the same problems Seattle has experienced: increased traffic, soaring gentrification, and prolonged construction.

Nearly 50 North American cities are vying to become the home of Amazon’s second headquarters — its first outside Seattle. The company said on Thursday that it plans to invest $US5 billion in the construction of the new campus, dubbed HQ2, where it hopes to eventually staff 50,000 Amazon employees.

CEO Jeff Bezos said it will be equal in size to Amazon’s current headquarters in the Seattle area, where the company grew from a small set-up in Bezos’ garage into a global e-commerce giant. Cities in the running include Philadelphia, Denver, Chicago, San Jose, and Toronto.

Many city leaders are optimistic about the thousands of jobs and massive tax cuts Amazon claims HQ2 would create. But some residents worry that it will also spur the same problems Seattle has seen since Amazon arrived in the late 1990s: increased traffic, soaring housing prices, and prolonged construction.

In The Oregonian, a Portland resident questioned how the city would cope with the population growth HQ2 would bring. Meanwhile, Philadelphia Inquirer columnist Will Bunch worries about higher rents that could price out “young artists and dreamers … crushing any and all cultural diversity and vibrancy.” 

James Thomson, an ex-head of Amazon Services (the division that recruits sellers to the company’s marketplaces), told the Toronto Star Sunday that inviting an Amazon HQ is “a trade-off against schools, infrastructure, [and] health care. Can Toronto support 50,000 high-net earners who all want nice homes, nice restaurants, easy commutes? Amazon is NOT a fan of unions or regulation.”

Amazon is the largest property taxpayer and private employer in Seattle. In the last seven years, the area has added 99,000 new jobs, with 30% of them are in tech, contributing to a construction boom. Since then, Amazon has experienced
 an influx of high-skilled, majority-white tech workers.

According to the Washington Technology Industry Association, there are now 250,000 people working in tech jobs in Washington, a number that’s growing at about 10% annually. Nearly 90% of those jobs are in King County, Seattle, the home of Amazon’s campus. 
Seattle is also now the second-highest-paying city in tech, with an average salary of $US99,400, according to the tech recruiting company Dice Holdings.

Somewhat unsurprisingly, the growth has made Seattle’s housing less affordable for some longtime residents, who have accused Amazon of perpetuating income inequality in the city.

SeattleSeattle Capitol HillLuxury development has boomed in Seattle’s Capitol Hill neighbourhood.

From 2005 to 2015, Seattle’s median rent went from $US1,008 to $US1,286, an increase nearly three times the national median. Recent data shows
 Seattle’s median home price hit $US730,000 in mid-2017, up nearly 17% from a year ago.
As Bloomberg notes, the expansion of the tech industry (most notably Amazon) has also clogged roadways in the city. Seattle drivers spent an average of 55 hours in traffic in 2016, placing it among the top 10 worst US cities for congestion, according to the most recent analysis by Inrix. In June, King County Metro even added more buses to accommodate Amazon’s summer interns.

In The Seattle Times, columnist Danny Westneat warned Amazon’s next, “Other North American City” of all these issues:

“If there’s one thing we know in Seattle, it’s boom and bust. We’ve gone from billboards urging the last one leaving to turn out the lights to now, our first million-dollar neighbourhood. Both the rush, and the relapse, of the fast buck are in our civic DNA,” he wrote. “So heads up, Other North American City: Amazon is about to detonate a prosperity bomb in your town.”

Amazon has recently tried to temper this image. In May, it announced efforts to house 200 local homeless people in one of its new Seattle buildings. Two months earlier, Bezos gave $US35 million to Seattle’s Fred Hutchinson Cancer Research Center, in addition to earlier gifts of $US30 million. And in 2016, Amazon donated $US10 million toward a new University of Washington computer science and engineering building.

It’s not yet clear where Amazon will make its new home. The company plans to announce a decision in 2018, and start construction by 2019. Ideally, the company said the city would have at least 1 million people, an international airport, and a “stable and business-friendly environment.”

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