What effects on housing could Amazon’s HQ2 have on the winning US city? Brookings, the Washington DC based think tank, this week published a report with a study on Seattle’s growth in housing prices over the past five years. Costs increased 10.3% from 2012 – 2017, over 4% the national average. Jenny Schuetz, Fellow at Brookings and author of the report, notes that the rise cannot be all on Amazon and highlights a number of Seattle’s attractive qualities. However, she calls on the cites vying for Amazon’s investment to be cautious of the greater urban effects it could have. Amazon proposes employing 50,000 workers and occupying over 8 million square feet of office space for its biggest location outside of Seattle. 20 cities have been shortlisted by Amazon.
Schuetz places all of those cities (bar Toronto) into four categories, characterized by housing markets: 1. High Priced and Hard to Build, 2. Recently Gentrifying, 3. Stable and Growth Friendly, 4. More Capacity, Older Housing. New York City, along with Boston, Miami, and LA, has been placed into category one. Rigid zoning and planning regulations, as well as, some of the highest housing costs in the country, put any new major developments under intense scrutiny. This, however, does not seem to concern these cities, with NYC even illuminating the Empire State Building in orange to support its application. With many parts of NYC gentrifying rapidly, the city government is battling to overcome and mitigate against its negative effects. The issue is a balancing act, will the economic benefits of HQ2 outweigh the social costs to a city already fighting for a social equilibrium.
Read the full Brookings report here