In case you haven’t heard, there is going to be a new Amazon headquarters. In more breaking news, Amazon is taking over the world even while battling Walmart for market share. When the company announced the expansion, cities rushed to throw their names into the ring.
What started from humble beginnings in a garage has morphed into the Amazon of today: A massive company that is rewriting the rules of retail and is loved by its customers. Amazon’s footprint is all over Seattle, and it’s more than just offices. The company is so big now that it needs more office space, hence the second headquarters. Yet the city picked as Amazon’s next home could come to regret it. Dozens of cities in the United States are hoping to lure Amazon and its new headquarters. Here are the reasons those cities should think twice.
1. Rent will get out of control
- The housing market will get thrown out whack
Amazon says its second headquarters will bring up to 50,000 jobs for the city picked for the second headquarters. All those newcomers will need places to live, and with urban real estate at a premium, you can almost guarantee rising rent prices. Home prices in King County, Wash., spiked by more than 18% from August of 2016 to August of 2017. Want to guess where the prices surged the most? In Seattle, where two areas of the city were up more than 20%, according to the Seattle Times. But what if you want to rent instead? It’s still going to be expensive. Research from Zillow shows a 5.5% increase in Seattle’s median rent in 2017, all the way to $2,189. Zillow predicts a 6% increase in Seattle for 2018. The city picked for the new Amazon headquarters should expect the same kind of bump in rent and home prices.
Next: More people equals more problems.
2. Infrastructure issues
- Transportation will be worse in every way
Seattle is quickly getting bigger thanks in part to Amazon’s rapid growth. The city can hardly handle it. The additional people and their cars are swamping streets. Drivers in Seattle spend 55 hours in traffic each year, according to data from INRIX. It is one of the worst traffic cities in the world, but public transportation isn’t any better. Amazon’s summer interns saddle Seattle’s bus routes, and the city is struggling to find ways to accommodate all the added passengers. The city awarded the second headquarters will have the same huge problem on its hands.
Next: How Amazon’s second headquarters affects other employers.
3. Pushing out the little guys
- There won’t be room for other employers
In Amazon’s current home base in Seattle, the numbers are staggering. And we’re not talking about the company’s sales figures or CEO Jeff Bezos’s shocking net worth. Amazon occupies close to 20% of Seattle’s office space. You have to add up the office space of the city’s 43 next largest employers to equal the space Amazon takes up. That’s astounding, and it could be the future of the city picked for the new Amazon headquarters.
Next: Droning on
4. Cultural homogeny
- Corporate drones taking over the city
It sounds like a dream for the cities vying for Amazon’s second headquarters: A major company coming to town and bringing 50,000 employees and the tax revenue generated from their spending. The money might pour in, but will the city’s unique culture evaporate? Considering Amazon’s workforce in Seattle is mostly white males, ethnic diversity in the new city could be in danger. With 50,000 Amazon employees running around, would the non-Amazon residents feel like they were crashing a company outing when they go out to dinner? That kind of homogeny, plus a lackluster dating scene, could be coming to the town picked for the new Amazon headquarters.
Next: Continued ripple effect
5. A problem in plain sight
- The homeless population will spike
The city picked to house the new Amazon headquarters will see thousands of new arrivals. We’ve discussed how it impacts the housing market. Another ripple effect? An increase in the homeless population. Seattle has the third-most homeless people in the country, but it’s the 18th-largest city in the country. The homeless population jumped nearly 10% in 2017, a result of skyrocketing real estate costs pricing people out of the city. It’s almost certain the same issues will pop up in Amazon’s second city.
Next: A dangerous game
6. There could be a dangerous future
- If things go wrong, it would be a disaster
It doesn’t seem likely, but we can’t help but play devil’s advocate. What if Amazon fails? Or what if it keeps making money hand over fist and decides to abandon HQ2 for a shinier new location? All of a sudden the city that wins the new Amazon headquarters will be missing out the substantial tax revenue promised by the influx of workers. And it will have a massive corporate campus without a corporation to live there. We already know Amazon hates paying taxes. In fact, Amazon closed a Texas distribution center when the state came to collect a tax bill. If the city and state housing the new headquarters irk Jeff Bezos and the Amazon powers that be, the same thing could happen again.
Next: Tales from the front lines
7. Take it from those who know
- Cautionary tales from Seattle
Amazon and Seattle are closely linked to each other. Seattle helped make Amazon, and Amazon is remaking Seattle, if not always for the best. Technology consultant and blogger Jeff Reifman writes, “Seattle’s dramatic transformation is radically affecting the quality, affordability, and style of life here for nearly everyone.” Depending on whom in Seattle you ask, Amazon’s rise and the city’s growth are either a boon or a bane. All the problems we’ve discussed — housing, traffic, infrastructure, homelessness, homogeny — could be part of the package deal for the city picked for the new Amazon headquarters.
Next: Getting ahead of the curve
8. Outcry from those paying attention
- Some groups are standing up to Amazon
Amazon has its list of demands for its second headquarters. The Our Neighborhoods, Our Future organization has some expectations for Amazon, which it laid out in a letter to Jeff Bezos. Several national and state organizations signed the letter asking for Amazon to provide the 50,000 plus being a responsible member of the community. If Bezos is paying attention, he’ll see many people in the city picked for the new headquarters are asking for more than just jobs and money.
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