Sarah Holder is a staff writer at CityLab covering local policy, affordable housing, labor, and technology.
By adding thousands more jobs outside the Texas capital, Apple has followed a tech expansion playbook that may just exacerbate economic inequality.
This week, tech giant Apple revealed a plan for nationwide job expansion, and announced that Austin, Texas will host its new, 133-acre campus. "Everything is bigger in Texas,” said Texas Governor Greg Abbott at a press conference reveal. “Today we can say Apple is bigger in Texas.”
Abbott says “bigger,” because in Austin, Apple was already big: The company employs 7,000 workers there—the most of any location besides Cupertino, where its first headquarters is based. The new campus would add 5,000 new employees, with the potential to accommodate 15,000 eventually, and construction is expected to take until 2021. “Apple is truly a part of our Texas family,” said Rebecca Clemons, the director of administration for Williamson County, where Apple’s new campus will be built—less than a mile from its existing facilities.
In fact, many of the locations Apple said it would now double down on are sites in which the company and other tech peers already have a large footprint. Seattle, San Diego, and Culver City will reach 1,000 Apple employees in the next three years, the company says, and Apple’s Miami campus will soon double in size.
That means Apple is the latest example of like flocking with like—tech companies choosing to settle in places they’ve already identified as talent centers. “This just reiterates that big tech siting decisions are continuing to concentrate on a very short list of sizable, well-established digital centers that are not losing share but are gaining share of the industry,” said Mark Muro, a Senior Fellow at the Brookings Institution’s Metropolitan Policy Program. “While some may view Austin as a rise-of-the-rest story, I think it’s a rich-getting-richer story,” he says—or what CityLab’s Richard Florida calls “winner-take-all urbanism.”
In choosing not to locate at the heart of Austin’s downtown business center, Apple is also reinforcing another status quo: That of the isolated, suburban tech campus. The company’s Cupertino UFO has become the quintessential example of building an island of a corporate headquarters, largely disconnected from public transit and able to function as its own ecosystem. Apple’s planned 133-acre plot in Austin will be located more than 12 miles from the center of the city, adjacent to a highway. It’s sure to be a “sprawltastic, car-oriented project,” Yonah Freemark, an urbanist and the creator of The Transport Politic, wrote on Twitter. It will be an office park surrounding by office parking lots, and, according to Apple, “50 acres of preserved open space.”
The sprawl is likely to inspire employees into car commutes—environmentally fraught, especially when there will soon be at least 5,000 more of them—but it can also reinforce urban inequality. “We have seen a resurgence of the centers of many of our cities, but as a share of regional employment, downtowns account for a far smaller share than they used to across the U.S.,” Freemark told CityLab. The geography of jobs varies by city, he says, but it often follows a predictable path: When campuses and corporations are placed on highways, wealthier people with access to cars also have easier access to employment, whereas other low-income or non-white people are more reliant on transit, and therefore shut out of the game in cities without comprehensive connections. “Essentially what these companies are saying when they’re choosing a location that is very inaccessible is that the question of equity of access is not really part of the equation,” he said.
These trends aren’t just Austin-specific—in a policy paper from the San Francisco Bay Area Planning and Urban Research Association (SPUR), which outlines a better way to develop corporate campuses, the authors lament the suburbanization of jobs in the Bay Area due to tech choices, too. “Notwithstanding policy efforts to shape the region’s growth toward a more efficient and sustainable form, recent expansion looks very much like the existing pattern, with familiar and disappointing results for the region’s performance on key planning, transportation and environmental measures,” they write.
This may not be the trend forever: Apple’s tech peers Amazon and Google have indicated a growing preference for developing downtown presences. Amazon’s first HQ is closely integrated with Seattle’s downtown; and while Google’s Mountain View HQ serves as an example of Bay Area office park culture, both companies have recently announced expansions in dense, transit-connected New York City.
And the unoriginality of Apple’s commitments does not negate their magnitude. If the company meets hiring goals in Austin, it could soon become the city’s largest private employer, superseding H-E-B and Dell. Across 50 states, the company already employs 90,000 people, according to a statement, and “is on track to create 20,000 jobs in the US by 2023”—points Apple is highlighting to counter President Donald Trump’s criticism of the company for its off-shore job creation.
Unlike Amazon’s competition for its second headquarters, Apple didn’t ask for a multi-billion-dollar tax break from local governments, but it will still collect: After a Tuesday vote in Williamson County, the state will officially offer $25 million in tax incentives contingent on job creation, while the county will offer a rebate for 65 percent of its property taxes, which could be worth tens of millions. Money will exchange hands, but the search for a second Apple HQ didn’t turn into a “beauty contest,” just as the company’s CEO, Tim Cook, proudly promised months ago.
And in Austin—whose population grew by 55,000 people last year—fears that Apple’s arrival will exacerbate housing costs might not be as urgent. “Apple … has placed its large new campus in a housing market able to absorb all the expected migration,” said Skylar Olsen, Zillow’s director of economic research and outreach, in a statement. According to Zillow data, Austin metro housing prices have risen 9.5 percent in the past year to reach $355,000, but zoning restrictions are limited, allowing developers to build more to meet demand. (Whether that new supply will be affordable or not is another question entirely.)
Still, both rungs of location decisions could also be missed opportunities, some critics say. As my colleague Tanvi Misra wrote after Amazon decided to settle in two economic powerhouses, “Just 2 percent of the country’s biggest, showiest metros have enjoyed the bulk of employment gains since 2008. The rest are largely languishing—unable to recover after repeated blows of de-industrialization and globalization.” That’s based on research from a Brookings Institution report that highlights the growing divergence between “superstar cities”—like New York and D.C., but also Apple’s other targets, Austin, Miami, and Seattle—and the left-behind.
Choosing winners, though, is also just a common-sense business decision, says Tom Stringer, a site selection expert—one that only further solidifies Austin’s role as a major tech hub. “In some ways it’s like Nashville,” a city Amazon will infuse with 5,000 new jobs soon, too, he says. “They’re two hip cities with dense urban cores, with unique politics as compared to the state. You’ve found the creative purple blend of politics and businesses, and that benefits a lot of folks.”
For similar reasons—access to tech-trained workers, cool urban culture—Apple also announced a few investments in so-called “junior superstars,” like Boulder and Portland, Oregon; and data centers in North Carolina, Nevada, and Arizona will be expanded.
These preferences are reflected across a range of tech companies. In a new Brooking Institution report, Muro and co-author Jacob Whiton find that “only nine U.S. metros increased their share of the nation’s digital services sector in the last several years.” That tiny subsection of the country enjoyed “a whopping 42 percent of the sector’s employment growth over the period and 44 percent of its total employment.”
So perhaps it was inevitable that Apple would choose Austin, the metro area, over others in the country. But choosing Williamson County, the suburb, could further a more local equity divide. Austin’s public transit is under-utilized, and is especially ill-equipped to combat these issues. The city has tried and failed twice to move forward on plans to build a light rail line, which would connect the downtown and the suburbs. In 2020, Austin will get another chance to vote on a revised version, according to the Austin-American Statesman. Apple’s planned expansion may compel the political will to pass it.
It’s not all on Apple to have gone urban, though. “It’s easy enough to critique a corporation for pursuing a specific location,” said Freemark. “But the reality is much of it is in the control of public policymakers.” The state could have tied incentives to specific locations, for example. If the more detailed agreements between the state and the company are revealed next week, perhaps they’ll include commitments to transit investment, as Virginia’s with Amazon did.
But besides implications for increased pollution and decreased mobility access, locating outside of the city center also means fewer opportunities for community engagement, says Freemark. “Is Apple likely to be a better community citizen there, or downtown where they have to be involved with the cities’ issues on a day-to-day basis?”