Friday , May 14 2021

Amazon HQ2 could push 800 people to unemployed, according to the economist

Amazon's HQ2 is scheduled to bring 25,000 well-paid jobs to the city of New York and Crystal City, but it is also expected to push rents and house prices up. This side effect has lawyers for the helpless and worried concerned.

"If people who make decisions at the local level do not make sense to make sure they have available housing to accommodate this growth, the natural effect of what will be is that revenues will rise and people in the bottom of the rental market, people With lower incomes, they will be expelled from the fund, "said Steve Market, vice president of programs and politics for the organization of Washington, DC, the National Alliance to end homeless.

HQ2 could lead to more helplessness, an estimate found

Amazon's new headquarters are expected to lead to 0.1-0.2% in the annual growth of additional income in the metropolitan area of ​​D.C. and an increase in rental growth of less than 0.1% in New York, according to an analysis by the ApartmentList leasing company. This works for tenant homes paying $ 1,391 additional – $ 2,182 more than 10 years in the city of New York and $ 3,750 – $ 5,757 more than 10 years in Washington, DC, a January review by ApartmentList found. Unemployment increases at a rate of 15% for every $ 100 per month, the rental increases, a 2014 study published by the Journal of Urban Affairs found.

Due to rising rental costs in the two HQ2 cities, the new Amazon headquarters could contribute to 14 homeless people every year in DC and 830 additional people in New York, Aaron Terrazas, senior economist of the real estate data site Zillow has calculated, still that Zillow noted that these numbers are subject to change.

"This is not a steady look towards the future," said Matt Kreamer, public relations data manager at Zillow. "Everything is based on the current projections and we do not know how each region will respond to the flow of workers, such as the accelerated building, etc. In a perfect world, there is a long wait and planning and construction to say no-one is homeless" .

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A homeless person has a signal while moving during freezing temperatures in New York in February 2018.
NYC and DC can be better positioned to absorb the impacts of HQ2

The areas of New York and Washington, D.C. They can be better equipped to absorb the changes that the new headquarters will bring from another place, Igor Popov, chief economist at the real estate site. The availability of subsidized homes has the greatest effect on homelessness, he said, and HQ2 is not expected to directly affect subsidized housing supplies, he said. The housing authority of New York and Virginia Housing Authority did not respond to the comment requests.

"We discovered that DC and NYC meters would experience some of the smallest impacts of HQ2 rent, and dividing facilities into two locations would further dampen that effect," Popov said.

"No one, including Amazon, knew that they would grow a lot. We had a great influx of people who moved here as a result, and it was not planned."

– Heather Redman, a partner at Seattle Venture Capital Firm, Flying Fish Partners

The two cities are also better placed to prepare for significant economic growth than Seattle before the arrival of Amazon, said Heather Redman, former president of the Great Chamber of Commerce of Seattle and current partner of venture capital firm Seattle Flying Fish Partners. "No one, including Amazon, knew they would grow a lot," he said. "We had a great flow of people who moved here as a result, and it was simply not planned."

Seattle's legacy of Amazon

In Seattle, where Amazon was founded, revenues grew 39.8% in the last five years and middle income jumped $ 10,000 in one year by 2015.

The rate of helplessness in the city exceeds that of other major cities, including New York and Los Angeles, an analysis of Seattle Times found, with 54 homeless people for 10,000 residents.

But the problem of homelessness in Seattle is of course complex, said Alison Eisinger, executive director of the Senate / King of Homelessness Coalition for non-profit. Although the rapid expansion of Amazon in the zone had a significant effect on the lack of home, it was not the only cause.

"There is no straight line between the arrival of Amazon and the lack of home," he said. "But what I want to make clear is that Amazon has surely contributed to the affordable housing crisis in Seattle, and the shortage of affordable homes in turn contributed absolutely to the helplessness crisis in our community."

Because they can plan ahead, the cities of the Amazon headquarters will take steps to avoid negative effects, he said. The Amazon itself can also address the issue in: in Seattle, has made a series of movements aimed at solving homelessness, including the possibility that Mary's Place shelter homeless to move to one of her buildings and employ people of FareStart, a program that enables people without income funds to work in the food industry in their office buildings.

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A children's game room inside a former Motel Lodge motel that Amazon has and offered for Mary's Non-Profit Place as a temporary shelter for women and their families in Seattle, Washington. Accommodates up to 60 people per night.

An Amazon spokesman told MarketWatch that the company is committed to the communities where their employees live and work. She has awarded grants of up to $ 7,500 to 100 schools around the world to feed the children who need lunch through the Non Kid Hungry program and donated more than 40 million dollars to causes of helplessness in her hometown of Seattle. These movements were not enough to offset the negative effects Amazon had on the real estate market, Eisinger said: more concrete steps should be taken.

"His work was charitable but not transformative," he said. "The question is: how much they are willing to be good corporate citizens and advance in advance to maintain the existing housing stock, hire locally and be a tide that takes all ships instead of flooding the working people."

How are DC and NYC preparing?

The North Virginia authorities are already laying the groundwork for managing the changes that HQ2 will bring, said Katie Cristol, the chairman of the Arlington County Board. The city will contribute 7 million dollars per year over the next 10 years to affordable housing units targeted at people who make up 40-60% of average rent as part of a package that is assembled for the arrival of Amazon.

"The challenge of facing the accessibility of housing in the region has been with us on Monday and is still with us after announcing the new headquarters," he said. "We believe that these revenues will help finance a safety net for our neighbors in need."

See also: As more Americans rally, homeless people increase in more expensive areas

Other cities that competed to host HQ2 had their own plans to avoid the lack of hosting if Amazon selected them. Dallas would have demanded Amazon to commit $ 100 million to address public and homeless education. Boston offered to devote $ 75 million in financing for 10 years to maintain home prices in the proposed HQ2 area.

As part of its agreement with the city of New York to build HQ2, Amazon agreed to donate space on its campus for a start-up technology incubator and for use by artists and industrial companies, and will provide a site for a new primary or intermediate audience school. The New York Development Corporation did not respond to a comment request. In the north of Virginia, Amazon will contribute with a pedestrian bridge that will be built in the next 10 years.

Only 3 of every 10 homes are accessible for low-income families

New York politicians are asking for more measures to counter the rising house prices while Amazon moves its headquarters in Long Island City's industrial district. Alexandria Ocasio-Cortez, the recently elected Democratic president representing Queens, said Amazon and other corporations must "[pay] its equitable quota "to maintain economic rent and minimum wage in New York.

"Without a quick action to increase the availability of affordable rental homes for people with lower incomes, Amazon's decision to open its headquarters in New York and northern Virginia will exacerbate the severe shortages of homes that exist in these communities"

– Diane Yentel, president and CEO of the Low-Income Housing Coalition

In New York and northern Virginia, there are only three affordable rental homes for every 10 of families with lower incomes and three out of four people with lower incomes in these communities pay more than half of their rental income, the low Domestic revenues The president and CEO of the Housing Coalition, Diane Yentel, said.

"Without a quick action to increase the availability of affordable rental homes targeted at people with lower incomes, Amazon's decision to open its headquarters in New York and northern Virginia will aggravate the severe shortages of homes that exist in these communities," he said . "The opening of new Amazon offices in these high-cost cities without addressing the severe shortage of affordable housing rental will result in increased rents, evictions and more frequent travel and, at worst, people without home".

Unique challenges in the HQ2 cities

More than 63,000 people in New York have been homeless since December 2017, a record number that marks a 82% increase in the last decade, according to the Coalition for the Abandoned. The number of homeless people in Washington, D.C. It has been declining in the last two years, and in December 2017 there were 6,904 homeless people in the district.

The lack of housing in New York has been exacerbated by the lack of affordable housing, Giselle Routhier, policy director at the New York City promotional organization, Coalition for the Homeless. The group convened the New York Mayor, Bill de Blasio, and New York Governor Andrew Cuomo to invest in "subsidized housing" for the population without a New York record to offset the effects of Amazon's arrival.

"At a time when affordable housing is scarce, our trains are broken and the lack of hosting is at a record high, the last thing we must do is to take money in one of the richest companies in the world," said Routhier. "The expansion of Amazon will surely boost our economy, and that's great, but we do not have to pay rent for billions of dollars when so many families can not afford them."

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