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Amazon headquarters seattle domeAmazon’s campus in downtown Seattle. AP Photo/Elaine Thompson

  • Amazon has promised 50,000 jobs to the city that’s home to its second North American headquarters.
  • Critics say that hosting the company’s headquarters isn’t all it’s cracked up to be.
  • In Seattle, the home of Amazon’s existing headquarters, the retailer has been blamed for astronomical hikes in real estate costs, traffic gridlock, and rising homelessness.
  • Trulia data shows the median four-bedroom home in Seattle now costs $847,00, up from $756,000 last year and $510,000 five years ago.

More than 200 US cities are competing in a cutthroat bidding war for a chance to become the home of Amazon’s second North American headquarters, dubbed HQ2. 

It’s easy to understand why: Amazon has promised a $5 billion investment and 50,000 jobs to the city with the winning bid.

But critics say Amazon’s coveted jobs could come at a staggering cost to the winning bidder, and not just in the form of billions of dollars in tax breaks that cities are offering to lure the e-commerce giant.

In Seattle, the home of Amazon’s existing headquarters, the retailer has been blamed for astronomical hikes in real estate costs, traffic gridlock, and rising homelessness, among other issues.

“There are a lot of people in Seattle who are at the losing end of the prosperity that Amazon brings,” said Knute Berger, a journalist, historian, and Seattle native. “There has been a lot of displacement. Minority communities have largely been driven out of the city for less expensive suburbs, and competition for homes and rents has dramatically increased, contributing to the rising homeless population.”

Seattle has led the nation in housing price increases for 13 consecutive months, with prices rising about twice as fast as the national average, according to the Seattle Times

Trulia data shows the median four-bedroom home in Seattle now costs $847,00, up from $756,000 last year and $510,000 five years ago.

As housing prices rise, so has the city’s homeless population.

Mary’s Place, a Seattle nonprofit that operates several homeless shelters, said in September that it was on pace to fill 170,000 beds at overnight shelters in 2017. That’s up from 2,300 beds in 2010, The Boston Globe reports.

Amazon gets blamed for Seattle’s housing crisis because of the influx of well-paid workers it has brought to the city, many of whom are driving demand for the area’s dwindling supply of homes.

Homeless SeattleHomelessness is on the rise in Seattle as housing prices soar. AP

“High demand and low inventory creates bidding wars and animosity among those who can’t even afford a starter home in the city they grew up in,” Kurt Schlosser wrote in September for GeekWire. “And the rent is too damn high, too. Workers who don’t wear tech badges for a living are forced to look outside the city and thus contend with the traffic coming in and out of it, creating a vicious cycle and affordability crisis.”

Seattle drivers spent an average of 55 hours stuck in traffic in 2016, according to the software and traffic-data company Inrix. That places Seattle among the 10 worst US cities for congestion.

“The traffic is miserable,” Berger said. “The city and state are now spending a lot of money to try to make improvements to the city infrastructure.”

Schlosser described Seattle as racing “against the clock to build a mass transit system worthy of servicing such a rapidly growing population.”

“Other cities chasing Amazon for HQ2 had better be way ahead in that game,” he wrote.

Restaurants are failing near Amazon’s Seattle headquarters

The rise in moneyed residents in Seattle hasn’t necessarily paid off for small businesses and restaurants in close proximity to Amazon’s headquarters, either.

Several restaurants have gone out of business in the Seattle neighborhood of South Lake Union, where Amazon’s headquarters is located, because diners didn’t turn out as expected, Marketplace reports.

“The worst thing is having an empty restaurant and then trying to keep your staff motivated and energized,” Josh Henderson, the owner of a recently closed restaurant called Vestal, told Marketplace. “It’s a soul-sucking experience.”

To be sure, there are myriad advantages to winning the bidding war for Amazon’s new headquarters.

The retailer says its Seattle headquarters has created 53,000 jobs in the city in addition to pumping a staggering $38 billion into the local economy. 

But cities and states should think carefully about rewarding Amazon with extravagant tax advantages and other perks, because there are so many ongoing costs associated with hosting such a giant and rapidly growing corporation, Berger said.

“Whatever town that takes them on will have to give them more and more to keep them happy,” Berger said. “The chess move isn’t just, ‘let’s get Amazon.’ You have to think further down the road. What is Amazon going to want 10 years from now?”

The Future of Retail 2018 by the BI Intelligence Research Team.
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