When Amazon moved into Seattle, the city changed dramatically. Among the negatives: Its housing prices jumped way up, infrastructure became even more stressed, and the jobs didn’t quite deliver as promised. The relationship between the tech giant and its host city soured.
Which of the 20 recently-shortlisted cities vying to become the tech giant’s HQ2 are most likely to go down a similar path, should their bid be accepted? A new map by the Brookings Institution hints at the answer.
In it, Jenny Schuetz, a fellow at Brookings’ Metropolitan Policy Program, categorizes the finalists by the nature of their housing markets, demonstrating how some are in a better position to absorb the shock of the 8 million square feet in office space required for the operation—and the 50,000 or so high-paid workers it will attract to the city.
Schuetz divides the 19 American finalists into four categories. (Note: Newark has been represented as a part of the New York Metro, and Northern Virginia and Montgomery County, Maryland, have been folded into Washington, D.C. Toronto was excluded because comparable data was not available.) The warmest colored dots on the map represent super-expensive places like New York, D.C., and Boston, where rents are already too damn high and new housing supply is in short order.
The second category, in yellow, includes the Denvers, the Austins, and the Nashvilles. These are cities where housing prices have hiked in recent years, and continue to climb. And resulting gentrification pressures have been pushing people out into the streets in protest. Should one of these cities become the site for Amazon, there’s a good chance that former residents will be squeezed out at faster rates—angering more residents. “Amazon’s new HQ would make noticeable ripples in the largest cities,” Schuetz writes. “For smaller metros, the effect could be more like a tidal wave.”
Light blue metros, such as Chicago, Atlanta, Columbus, and Dallas are the ones where there’s the most space to grow. That these metros have relatively relaxed regulations that allow for an easy adjustment to growing housing needs and expansive office space means that they’re unlikely to experience a major crunch when Amazon comes to town, Schuetz concludes.
The last category is the dark blue cities: Indianapolis, Newark (not shown separately in the map), Philadelphia, and Pittsburgh, are among those with plenty of vacant housing—but of older, more dilapidated stock that might need an upgrade in order to serve the tastes of the elite and amenity-driven Amazon’s workforce.
There’s a lot of focus, and speculation, on what Amazon is looking for—including from cities that didn’t make the cut. But Schuetz asks the ones that did—the cities that are tripping over each other to sweeten their offerings to Jeff Bezos—to take a good look at what they’re betting their money on. She writes:
As the 20 finalists negotiate with Amazon over the next year, local policymakers should be asking themselves—and their constituents—whether the benefits of HQ2 will outweigh the economic and social costs.