Amazon is poised to announce the short list of cities that may be the home of the company’s second headquarters. According to Joseph Parilla, a Fellow at the Brookings Institution’s Metropolitan Policy Program, the new, 50,000 person establishment will cause an economic boom in whatever city it lands in, based off the impact of the first headquarters in Seattle.
The “prosperity bomb” caused by Amazon is estimated to be around $38 billion in economic activity in Seattle. However, though incomes in Seattle grew by 14 percent from 2014 to 2016, housing affordability in Seattle outpaced the income of its residents. Seattle homebuilders have not been able to meet supply demands, and the cost of living increases has outstripped the wage gains of the working class.
The question is, will a new headquarters be good for the residents of the city it lands in?
“As offensive as the public subsidy aspect of the economic development system remains, even the most dynamic regional economies could benefit from 50,000 jobs,” says Parilla. “An Amazon headquarters would be especially transformational for the smaller, Heartland metro areas left in the competition which are not yet suffering from the affordability crises on the coasts.”
One thing to consider for local residents is the potential for cost of living increases, as it will not only be new Amazon employees impacted, but local residents not employed by Amazon.
“For anyone not directly benefiting from Amazon HQ2, there are well-founded concerns that their cost of living will increase as new arrivals bid up the price of housing,” said Parilla. “As such, local officials need a plan to increase the region’s housing supply by zoning for new market-rate housing development.”
Parilla suggests that a portion of tax revenue generated by Amazon be put aside and into a fund mean to preserve and even expand affordable housing.
Find the full story from Brookings here.