
There Are No Houses for Amazonians - SQL2219
https://medium.com/migration-issues/no-room-at-the-inn-for-amazon-effda4edc00f
======
taw-an
"That means that what Amazon is really looking for is something else: that
special something."

Massive tax breaks and giveaways. That's all this is about. It's a dog and
pony show to see who will fork up the most to buy in to the delusion that it
will pay off somehow.

~~~
x0x0
Exactly.

And what is particularly galling about Amazon is they essentially pay no
taxes. Since 2008, Amazon has paid $1.8B in income tax while Walmart has paid
$64B [1]. So they're basically leeches demanding public services while
contributing virtually nothing. As someone whose name I've forgotten said, the
fundamental question surrounding silicon valley / SV type companies is how do
you run a country when a company with $0.5T market cap / Fortune #12
essentially pays no taxes. Who pays for roads/fire services/schools.

[1] [https://www.l2inc.com/daily-insights/no-mercy-no-
malice/brea...](https://www.l2inc.com/daily-insights/no-mercy-no-malice/bread-
crumbs)

~~~
PKop
Do the thousands of employees contribute economic benefit, as well as taxes,
to Seattle or other cities?

It's absurd to think that there is no tax money being injected into the city
simply because the corporate tax collected is low. They are spending their
profits! Some of it in Seattle, and in other places they have physical
presence on wages, real estate, etc.

Honestly you need to explain your premise that they contribute nothing... it's
illogical. Where is the money going?

Why are "taxes" the only way citizens of a community can prosper? Do wages not
count? If they do count, would you like to argue that Amazon is not paying
wages to thousands of employees?

Do those employees pay taxes? Taxes aside, are the wages themselves
beneficial?

One final point: "tax breaks" in and of themselves seem silly to rail against,
like a shareholder being upset at "discounts".

Is your contention that a city giving _any_ tax breaks will see less tax
revenue as a result of Amazon coming into their city than if they didn't?
Surely it's a question of how much no?

~~~
dv_dt
It's a prisoners dilemma - if no cities offer tax breaks, then Amazon likely
still chooses a site in the US, and we all benefit from better balanced gov't
budgets (or if there is enough incoming flow - we could lower tax rates in a
fiscally responsible way - imagine that). If some cities defect, then well it
breaks down to forgoing taxes and public budgets get harder to meet. Federal
grant programs should look hard at cities applying for funding who may have
given up local tax revenue to attract private corporations.

~~~
PKop
I dispute the claim that, on net, they would be "giving up" tax revenue. Or at
least, the particulars matter.

Above some threshold, which can still be very low, they are going to get
_massive_ amounts of tax revenue, aside from the fact that wages, jobs, and
citizens paying taxes will increase.

You might dispute this, but I don't see any numbers or qualifiers with anyone
saying "tax breaks", in and of themselves are always on balance, whatever the
specific details, worse than not having the companies be there.

There are lots of debates on the correct form of taxes anyways. Corporate
taxes of non-trivial rates seem pointless to me, or.. detrimental actually.
Property tax abatements? No different from a landlord giving rent deferrals to
a whale tenant. _It can be a very practical choice_

Politicians' incentives not being aligned with long term goals of a city?
Yes.. that is a problem. But still. The _right_ choice could very well be
massive tax breaks, even among those of differing political philosophies.

~~~
dv_dt
Suppose no cities offer tax breaks and Amazon grumpily decides to establish a
second headquarters anyway wouldn't the tax revenue in that be higher as a
nation than if one city offers breaks?

I sort of agree only on corporate tax breaks - pragmatically there is little
point keeping them so high that most international corporations keep their
profits offshore. I'd favor lowering corporate overseas rates, but only in
combination with increased enforcement against tax avoidance schemes. But to
me thats an unrelated to local city/state tax breaks given to corporations.

~~~
PKop
At the end of the day a lot of this seems like sort of an accounting question.

Since Amazon uniquely doesn't earn much profit, preferring to invest / spend
as much of their revenue as possible, one could argue that there is an
opportunity cost to collecting more money from Amazon in taxes vs leaving it
to them to spend how they see fit. The cost is whatever alternative use they
would place on that money... more employees hired, higher wages / benefits,
more R&D, more capital expenditure, more construction, who knows.

Or course, in every one of those cases, there would likely be taxes involved
anyways...

~~~
dv_dt
We do know. Taxes are already fairly low in the US. Kansas ran a broad scale
experiment with dramatically lowering state taxes - the results indicate that
some magic growth is not unlocked. My conclusion is that cities are just
giving up local budget balance for little benefit.

------
jlos
>> Can any city provide a net increase in 5,000 housing units? Well, that’s a
speculative question, but one thing we can do is ask if any city did produce
5,000 extra housing units beyond household formation over the last 5 years

Calgary (Alberta, Canada, not Texas) added triple that in 2014[1]. Since the
province's economy is commodity driven the major city centers are accustomed
to boom and bust cycles and are used to adding housing quickly. Also of note,
Calgary has rated quite high based on a number of other metrics given by
Amazon[2] (though, to be fair its really hard to trust all bias is left behind
in these analyses)

[1] [http://calgaryherald.com/life/homes/new-homes/calgarys-
housi...](http://calgaryherald.com/life/homes/new-homes/calgarys-housing-
market-experienced-great-growth-in-2014) [2]
[http://www.cbc.ca/news/canada/calgary/amazon-headquarters-
ca...](http://www.cbc.ca/news/canada/calgary/amazon-headquarters-calgary-tops-
data-crunchers-analysis-jens-von-bergmann-1.4298204)

~~~
thinkling
The #1 problem with the article is that it restricts the analysis to the U.S..
With the current political climate around immigration, Amazon can't easily
bring engineering talent from around the world to its headquarters. A site
outside the US could solve that. The RFP said "North America".

~~~
sheepmullet
> With the current political climate around immigration, Amazon can't easily
> bring engineering talent from around the world to its headquarters.

A crack down on H1B abuse will free up tens of thousands of spots for
companies like Amazon to bring in real talent.

You have companies like Tata getting 5x as many H1B visas as Amazon. And yet
they pay their H1B staff on average ~$50k/year less than Amazon.

~~~
cbsmith
> A crack down on H1B abuse will free up tens of thousands of spots for
> companies like Amazon to bring in real talent.

Yes, and unicorns would be nice, but let's stick to things that are actually
likely to happen.

------
Overtonwindow
It may be true that no city fits what Amazon wants, but I think Atlanta comes
very close. It has plenty of housing, low cost of living, major airports,
universities, a large population, and a decent rapid transit that could be
expanded given a catalyst like Amazon. I think Amazon should opt for a low
cost, big city, and let that city build around Amazon.

~~~
creaghpatr
>It has plenty of housing, low cost of living, major airports, universities, a
large population, and a decent rapid transit that could be expanded given a
catalyst like Amazon.

I live in Atlanta and all of these things are true except that last one. MARTA
has neither the coverage or the competence to qualify as 'decent'. Even if
they plopped the HQ right on top of Five Points (as is being proposed), most
employees are still gonna drive, and encounter that world-class ATL rush hour
traffic.

That said, Atlanta is still definitely in play, and our department of economic
development (which I used to work for) is one of the most effective in the
country. They brought Hollywood to Atlanta already, Amazon shouldn't be that
much harder. Culturally, I expect it would encounter a mixed reception.

~~~
ynniv
_MARTA has neither the coverage or the competence to qualify as 'decent'._

Compared to New York, Chicago, DC, Boston, or SF sure. Assuming Amazon isn't
going to expand to a more expensive city, the only competing subway system is
in Philadelphia. MARTA is unpopular, but cleaning it up and buying new trains
is cheap compared to digging new tunnels through an existing city. No one
points out that the Gulch site is currently a wasteland because we all know
that if Amazon shows up, _it won 't be_.

~~~
creaghpatr
The gulch is next to Phillips Arena and MB Arena- imagine the traffic during a
weekday ATLUTD game and a hawks/concert. It's alot of wasted vertical space
for now, but useful for temporary gatherings; we used it as a basecamp for a
film shoot a couple weeks ago. I suppose they could rip out and replace Vine
City with Amazon-friendly housing, but that would cause some issues.

~~~
ynniv
If Amazon moved to the Gulch, employees would probably live in O4W, Decatur,
Midtown, or Buckhead, and take MARTA in.

------
ynniv
The premise is interesting, but some of the calculations aren't convincing.
The first map of cities that "did produce 5,000 extra housing units beyond
household formation" is particularly strange. Which city is more prepared for
such an expansion, one that built zero units and lost 5,000 residents, or one
that built 100,000 units and gained 100,000 residents? Without greater clarity
into the data, many of these maps fall into "lies, damn lies, and statistics".

~~~
Finnucane
Yeah, that struck me as odd too. Under normal circumstances, you wouldn't
expect private developers to build that much excess inventory on spec with no
expectation of being able to sell quickly.

------
mikestew
Completely unrelated to the topic at hand, but I've gain a new-found respect
for Medium, having not seen this on the site before:

 _" This embedded content is from a site that does not comply with the Do Not
Track (DNT) setting now enabled on your browser.

Please note, if you click through and view it anyway, you may be tracked by
the website hosting the embed.

Learn More about Medium's DNT policy"_

I think that's the first time I've seen visible evidence of the DNT setting
actually doing something. Now whether or not that offsets the header/footer
turds that litter their mobile site, I'm still deciding. :-)

~~~
tedmiston
It's been there for years, maybe even since the beginning.

------
Aardwolf
Am I the only one who thought this would be about housing in the Amazon
rainforest?

~~~
kentosi
Nope. I actually was expecting to read about a lack of housing for displaced
Amazonians due to deforestation.

~~~
marcosdumay
I was expecting something similar too. I'd just like to point that
deforestation does not displace people.

~~~
lovich
I don't think that's true. I would certainly classified the tribes in the
Amazon who get killed or pushed out of their homes by loggers and ranchers as
displaced due to deforestation.

~~~
marcosdumay
If you are imagining a rain forest as something full of people, just forget
it. For population density concerns, the main difference between a forest and
a desert is that people can traverse the desert, so you will find way more of
them there.

When tribes and agriculture exist near each other, you will see economical
interdependency, not one population pushing the other away.

------
empath75
Everything about this article is kind of dumb. Using this exact same argument,
it would be impossible for any company to build any headquarters, and yet
somehow the American economy still continues to grow.

It's not like amazon is going to airlift in 50k people on day 1.

Anyway, Northern Virginia is still the obvious place for second HQ, given
metro access to DC, Dulles airport, the millions of datacenters, fios
penetration and large numbers of local it workers.

~~~
ergothus
I agree that the article fails to explain why a city can't increase it's
housing creation when the market demands (sort of like most places already do,
albeit with issues).

BUT I think it's fair to point out that Amazon going anywhere where it
represents a large change in the population will have a notable housing
impact. Construction lags behind demand and the current markets in high tech
areas have lots of problems with difficult local regulations, extreme rents,
very limited availability, and general gentrification issues. Amazon will
likely be a net positive for wherever they go, but it's a good idea to
anticipate and try to reduce the inevitable negatives.

I want to disagree with your NoVa conclusion, but I can't. It has location,
population, infrastructure, though transportation is notoriously bad - almost
always ranked worse for traffic than San Francisco and Seattle, usually
beating Boston, and challenging LA depending on what you measure. (that's from
memory and a few google searches to make sure I'm not crazy, take with salt)
North Carolina would be the next natural match, but I don't see Amazon taking
on that political mess.

~~~
ianai
With amazons size nearly anywhere would work. They’re not resource constrained
and the ecosystem will follow them anywhere.

~~~
ergothus
But do they want to build that ecosystem from scratch? My amazonian friends
imply that while it's easy to get applicants, they have as much trouble
finding the people they want as anyone else in their current tech saturated
area.

If Amazon moves to Podunksville, it will "work". Given that they're looking
for deals, it will almost certainly be successful as far as "does the office
function, is it a net positive to our productivity". But what is already at
their new location will definitely impact what happens for the first few years
as the local economy shifts. Pulling in 90% of their workforce from remote
with a tiny hub airport that has only 2 non-stop destinations is very
different from pulling 50% of their workforce from remote with an
international airport with non-stop flights to most major cities. The reverse
effects are true as well - getting people in where the local cost of living
makes every dollar worth $1.20 grants a benefit vs a local cost of living
giving you $0.90 spending power per dollar.

Heck - Moving to Seattle was wonderful for my wife and I in lots of tiny ways:
People aren't confused when asked about vegetarian options, assuming it's not
already clear on the menu. Our various hobbies and entertainments are well
represented (Heck, I play tabletop RPGs and a good chunk of the major
companies are actually _here_) It'd take a notable bit more to get me to go to
somewhere where eating out is a chore, where I have to deal with the 5 local
adults willing to play a "game" regularly and have to put up with their quirks
because I have no other options, where I have to deal with religious
evangelism on a daily basis, where you have to drive everywhere, where the
weather is extreme, etc.

This isn't a question of success vs failure, it's a question of how to
maximize their success. And the success of the local area, including the
current residents.

------
bluedino
I noticed something the article fails to mention.

When I was in Chicago the other weekend there was so much talk about Amazon
moving their headquarters there, with a number of possible sites including the
Old Main Post Office.

There is a building boom going on right now. Chicago has _54_ high-rises in
construction, many with residential living space. Some are smaller 50-unit
buildings and the biggest, One Grant Park, has _792_ units.

------
will_brown
I think Miami makes a lot of sense, and housing has always been one of the top
reasons.

Notwithstanding what this article suggests (a little hard to follow), Miami
housing numbers are as follows:

About 12,300 new condos are expected to be completed in downtown between
between 2014 and 2019; between 2004 and 2009, more than 21,000 units were
delivered.

And this is just downtown, “Miami” itself is a sprawling area with development
continuing South and West where it’s suggested Amazon would set up shop. In
fact some of the housing development has even been paused due to to much
housing coming on the market and lack of demand (though the demand is actually
there, local wages are not, reading between the lines foreign investment is
drying up). Still the developers (deep pockets) want nothing more than to keep
the good times rolling and bringing in Amazon would be instrumental.

~~~
yahna
I can buy an overpriced condo in Seattle.

rather have a place with a bit of space.

~~~
will_brown
I'm sure you can buy an over priced condo anywhere, but are there 30,000+
units available in those markets, which in my estimation is the point of the
article vis-a-vis a housing market that can support 50,000 Amazonians.

And I'm not going to knock Seattle, there is nothing wrong with cold, wet,
dark and depressing...but there is something to be said about the year round
Tropical weather Miami has to offer. Its why Miami has snowbirds and our
number 1 industry is tourism (discounting Medicare/insurance fraud).

------
pfedigan
In my opinion, I don't think cities should be partnered completely with one
company. We may be closer to a dystopian future than we think..

------
dredmorbius
There's a precedent I'm aware of for a wholesale move. RAND Corporation did
this in the 1950s, moving from the east coast to Santa Monica, putting entire
families on trains to head west (young man, and grow up with the country...).
Mentioned in Martin Campbell-Kelly's book:

[http://www.worldcat.org/title/from-airline-reservations-
to-s...](http://www.worldcat.org/title/from-airline-reservations-to-sonic-the-
hedgehog-a-history-of-the-software-industry-history-of-
computing/oclc/940545837&referer=brief_results)

------
vdnkh
Interesting to see parts of NJ highlighted in the list. NJ used to have a huge
tech sector, accommodating RCA, bell labs, AT&T, etc. but hasn't found strong
footing in the software age. The old bell labs complex in holmdel
([https://en.wikipedia.org/wiki/Bell_Labs_Holmdel_Complex](https://en.wikipedia.org/wiki/Bell_Labs_Holmdel_Complex)),
recently redeveloped, is undergoing a "tech renaissance" of sorts now, finding
tenants such as Nvidia. At it's peak it employed over 6000 engineers on site.
And it sits on a massive plot of land (complete with it's own substation, road
salt facilities, wastewater treatment plant, AC plant, etc.), which is
unfortunately now being developed into "luxury" homes. But maybe if Amazon
started looking earlier than now when the facility was still dormant they
would have found a suitable home here.

~~~
Buttes
Hey yeah why not, I'd live in bits of Jersey. If I can work nearby in Jersey
and be able hop on the PATH to The City on weekends, that doesn't sound half
bad.

------
jpollock
This makes a false assumption - that Amazon would be on top of existing job
creation.

Cities already have models that assume/hope for a certain amount of job
creation (and loss), with some of that being provided by new entrants to the
area.

If existing businesses aren't meeting the model, they go out and find new
sources. The jobs and housing numbers are separate (separate orgs, both
flowing from the same model).

So, consider this more of a mayor being a salesman meeting their annual quota
with a single sale. It's risky, but it's not an issue if it happens - they
have already planned for success.

Now, if they aren't producing housing to meet their plan, that's an entirely
different problem.

------
zeveb
It'd be really awesome if the images in this article loaded without
JavaScript.

------
PKop
Columbus, OH is going to get it.

Growing city with very affordable housing, large university system (OSU),
close to international airport, centrally located in the midwest.

~~~
balls187
There are no direct flights between CMH and SEA. Seems like that wouldn't make
sense for a company based in Sea.

[http://flycolumbus.com/airline-info/non-stop-
destinations/](http://flycolumbus.com/airline-info/non-stop-destinations/)

~~~
sjroot
I feel like this is a non-issue. If there is a demand for CMH-SEA flights then
surely an airline will cater to it.

~~~
jandrese
Yeah, if you build it they will come. Although I'd think Amazon would be
pretty good at telepresence.

------
johan_larson
The requirements about the local labour pool and university system are
nonsense. People can and will relocate to work for Amazon across the country
and even across the world.

My take is that the RFP is a long-list of wants, not the short-list of must-
haves. They want lots of suitors knocking on their door, to make the bidding
process competitive.

------
wavefunction
The projections for Austin's population growth from two million inhabitants to
four million by 2030 require an additional 167,000,000 housing units required.

This seems to be a problem but not uncommon even beyond Amazon.

~~~
jandrese
Every person moving in needs 83.5 homes?

~~~
syntheticnature
I'm thinking it was supposed to be 167,000 instead, which seems low unless
there's slack space or projected construction (over 11 people/house).

------
0x4f3759df
Does anyone know of a site where you can bet on the outcome of this process?

~~~
nathancahill
I bet that PredictIt would be willing to host it.

------
pascalxus
CA is the last place they should consider, and that goes for any company that
considers the cost of labor.

~~~
dragonwriter
Unless, you know, they also consider other factors beyond the cost of labor,
which most companies do.

------
xchaotic
Or they could simply embrace work from home. No matter what city they choose,
I won't work for them.

~~~
sjroot
They have absolutely no need to court you.

------
paulsutter
The Boring Company has a solution for housing: tunnels with no traffic or
stoplights. 200kph means you can live far from downtown and still be at work
in 15 minutes.

“Without tunnels we’ll be in traffic hell forever” -Elon Musk

~~~
x0x0
I don't understand how that helps. You can't built very many 200mph tunnels,
so housing at the ends will still have to be very dense or people will have to
drive far to get to the stations. So this just shifts the housing density
problem.

~~~
paulsutter
Shifting to a less hidebound / bureaucratic location is a great solution.
Also: Elon’s goal is a more than 10x reduction in costs, and he’ll be able to
charge related to the value of people’s time.

~~~
x0x0
I think you're crazy to believe that if you go build a bunch of very dense
housing anywhere, you won't shortly thereafter have a bunch of bureaucracy as
a lot of people have to figure out how to live in close quarters.

Again, as near as I can tell, the best possible outcome of ultra high speed
tunnel transport is you move the dense housing problem (or the traffic
problem) elsewhere. That's not actually a solution. I also think it only
appears easier than eg fixing sfbay's housing problems.

~~~
paulsutter
Ok then what’s your solution? Or, you’re saying there is no solution and we’re
permanently stuck with commutes and housing prices from hell?

~~~
akgerber
Run an S-bahn
([https://en.wikipedia.org/wiki/S-train](https://en.wikipedia.org/wiki/S-train))
through the tunnel for 10x the throughput of humans for a given tunneling
cost. Cars are a profoundly inefficient use of space in a dense area.

The only way an auto tunnel network would solve traffic is by charging a
sufficiently-high toll to match supply with demand. Otherwise, in an area
dense enough that traffic congestion is a problem, induced demand will lead to
congestion:
[https://www.aeaweb.org/articles?id=10.1257/aer.101.6.2616](https://www.aeaweb.org/articles?id=10.1257/aer.101.6.2616)

~~~
paulsutter
Boring Company tunnels are NOT for cars-only, they do envision public-
transportation-like services which will be much better to move between dense
areas:

[https://fm.cnbc.com/applications/cnbc.com/resources/img/edit...](https://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2017/05/26/104494945-Boring-
electric-vehicle-2.1910x1000.jpg?v=1495813998)

------
zip1234
Where is the data from? How does Detroit not have enough housing to support
such a company? I'm guessing a lot of cities can build enough housing. Detroit
especially has lots of housing--maybe not new builds in certain areas, but
they are tearing down blocks of houses right now and people can buy houses for
15k. I question the article's data.

~~~
lithos
If you want housing that has had walls ripped off to get copper wire for
selling to a scrap yard. Yes there is plenty of that.

If you want to pay housing boom sized taxes on a house worth a fraction of
that, there is plenty of that as well. Since you aren't allowed to reappraise
a lot of property.

~~~
zip1234
A fair point. I'll agree that those properties are mostly not 'move-in' ready.
However, the 4 year time period allows for redevelopment of properties. Also,
my main point is that the author's data source is unclear. How do we know what
was factored into the housing supply calculation?

