Amazon HQ2: Why Amazon shouldn’t come to NYC

New York City is
reportedly going to be home to Amazon’s second headquarters — or
at least part of it.

Yana Paskova/Getty
Images

• Amazon is reportedly planning to name Long Island City
  neighborhood in Queens, New York half of its second
  headquarters, HQ2.
• HQ2 — which The New York Times reports will be split
  between New York and Crystal City, Virginia — will create
  roughly 25,000 new jobs in the area. 
• HQ2 sounds like a great opportunity for New York, but
  it could contribute to a rise in housing prices, as well as
  population and transportation woes.

On Monday evening,
The New York Times reported that Amazon was finally nearing a
decision on where to place its second headquarters. After more
than a year of deliberation, the e-commerce giant is reportedly
nearing a deal to split HQ2 between New York City, in the Queen’s
neighborhood of Long Island City, and Crystal City,
Virginia. 

In January, soon after Amazon realized its short list of 20
finalists for HQ2, Business Insider’s Leanna Garfield published a
story on why New York City would be a horrible choice for
Amazon’s second headquarters. Here is why:

In mid-January, Amazon named New York City as one of
the top 20 contenders for its second
headquarters, dubbed HQ2. The campus is expected to bring
50,000 high-paying jobs to the chosen North American city, and
Amazon said it will invest $5 billion in HQ2’s construction.

At first glance, it sounds like a sweet deal. But if HQ2 came to
New York, with its influx of tech workers, the campus could
exacerbate several problems that already plague the city,
including high housing prices, overpopulation, and gridlock — all
things Seattle, Amazon’s home, has seen since the company arrived
in the late 1990s.

A shortage of housing stock and commercial space

New York City has proposed 26 million square feet across three
boroughs as possible sites for HQ2. In response, seven
local community organizations signed an open letter to CEO Jeff
Bezos listing several concerns, including
out-of-state hiring, unaffordable housing, and
gentrification.

Their worries about higher rent prices are not
unfounded, according to a
recent report from real estate website Apartment List.
The site made a few predictions about HQ2’s potential
impact on housing prices in 15 major cities based on
historical home-building statistics and data from
the US Census and Bureau of Labor
Statistics. 

According to the report, the city could see an additional
annual rent increase of 0.1% to 0.2% if HQ2 comes to town.
Already, the
median rent surpasses $3,000 per month. Considering that the
average rent in New York City increases around 3.7% annually, HQ2
could cost renter households $1,391 to $2,182 over the next
decade.

An independently owned
market in Sunset Park, Brooklyn, New York.
Sarah Jacobs/Business Insider

In New York, it has been difficult for housing supply to
keep up with a quick pace of growth over the past two decades.
It’s a similar story in Seattle, where Amazon is the largest
property taxpayer and private employer. Since 2000, the area
has added 99,000 new jobs, with 30% of them in tech,
contributing to a
construction boom. Seattle is now the
second-highest-paying city in tech, with an average salary of
$99,400, 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. From
2005 to 2015, Seattle’s median rent
went from $1,008 to
$1,286, an increase nearly three times the national
median. 

Amazon’s presence could also potentially impact small
businesses in New York. In the 2017 book “Vanishing
New York,” author Griffin Hansbury wrote that the city is in
a state of
“hyper-gentrification,” which has culminated in the death of
small businesses like mom-and-pop groceries, used book shops, and
dive bars. Seattle has seen this as well, and some local
businesses say Amazon’s presence makes it more expensive for them
to find space.

“Some landlords aren’t even talking to us about (leasing)
full floors,” Eric Blohm, a senior managing director for Savills
Studley (which represents companies looking for office space in
Seattle), told
The Seattle Times. “They’re holding out for the full building
user. Or they’ll say, ‘Get in line, you’re third in line, we’re
talking with other people.'”

The subway system and roads would not be able to handle
thousands more Amazon workers

Though New York City is the densest city in the US, the
promise of 50,000 jobs is likely to attract even more residents.
That could be bad news for the city’s struggling public transit.
The city’s subways handle 5.7 million riders every weekday, and
50,000 more people could make a dent, however small.

In 2016,
a New York Times investigation also found the city’s s
explosive population growth over the last century has been a big
contributor to the subway system’s inefficiency. The aging subway
faces funding challenges, as well as an impending temporary
shutdown of the L Train — a main (and majorly congested) line
that travels from Manhattan to Brooklyn — to make repairs for

damages incurred by Hurricane Sandy in 2012.

Brian
Jeffery Beggerly/Flickr

It’s uncertain whether the city’s subway system and roads could
cope with thousands of new Amazon commuters or drivers.

In 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 2017, Seattle’s
metro system even added
more buses to accommodate Amazon’s summer interns.
In New York City, high-frequency, cross-town bus service is still
lacking. In November, the New York City’s comptroller’s
office said the
bus system is “in crisis,” a reality the city would need to
reckon with if HQ2 came.

Worries about the “Amazon effect” on public infrastructure

In a letter to Mayor Bill de Blasio, a coalition of
community organizations
asked the City of New York to hold Amazon accountable if
the company expanded its footprint there. The groups argued that
Amazon should invest in public infrastructure, like schools and
transit, as well as small businesses if it chooses to come to New
York.

“You should focus on pushing Amazon to be a better
corporate citizen and improving how it treats communities and
workers,” the letter said. “You should also actively work to
ensure that this multibillion-dollar company, who already has a
significant presence in New York, does not receive financial
incentives simply for doing business here. New York communities
are facing massive cuts to public goods and services, and working
families are struggling to make ends meet.”

Leanna Garfield originally contributed reporting.