Amazon HQ2 could push 800 people into homelessness, says economist

Amazon's QG2 is expected to create 25,000 high-paying jobs in New York City and Crystal City, but it should also drive up rents and house prices. This side effect has worried advocates of homelessness and hunger.

"If people who make decisions at the local level do not feel they are making sure that housing is available to cope with this growth, the natural effect will be that rents will rise and people are at the bottom of the scale. the rental market, the people with the lowest incomes, will be kicked out of the bottom, "MarketWatch Steve Berg, vice president of programs and organization policies in Washington, DC, told the MarketWatch. National Alliance to End Homelessness.

HQ2 could lead to more roaming, according to one estimate

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According to an analysis of rental company ApartmentList, the new head office is expected to generate between 0.1 and 0.2% of additional rent growth in the metropolitan area of ​​DC and an increase of less than 0.1% of rents in New York . This prevents renter households from paying between $ 1,391 and $ 2,182 over 10 years in New York and between $ 3,750 and $ 5,757 over 10 years in Washington, D.C., discovered a January analysis by ApartmentList. Homelessness increases at a rate of 15% for every median rent of $ 100 a month, according to a study published in 2014 by the Journal of Urban Affairs.

Due to rising rents in the two cities of the second headquarters, the new headquarters of Amazon could contribute each year to 14 additional homeless people in California and 830 additional people in New York. Aaron Terrazas, Senior Economist, Zillow Real Estate Data Site

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Zillow noted that these numbers are subject to change.

"This is not a firm vision of the future," said Matt Kreamer, head of public data relations at Zillow. "Everything is based on current projections and we do not know how each region will react to the influx of workers, that construction can be accelerated, and so on. In a perfect world, deadlines, planning and construction are enough to mean no one becomes homeless. "

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NYC and DC could be better positioned to absorb the impacts of HQ2

New York City and Washington DC neighborhoods may be better equipped to absorb the changes brought by the new headquarters than other sites, said Igor Popov, chief economist of the Apartment List property website. The availability of subsidized housing has the biggest impact on homelessness, he noted, and the QG2 should not directly affect the supply of subsidized housing, he said. The New York City Housing Authority and the Virginia Housing Authority did not respond to requests for comments.

"We found that the Washington and New York subways would experience some of the lowest QG2 rent impacts, and the two-site facility division will further mitigate this effect," Popov said.

"Nobody – including Amazon – knew that they would grow as much. As a result, we had a massive influx of people who moved here and it just was not planned. "

Heather Redman, former president of the Greater Seattle Chamber of Commerce and current partner of venture capital firm Flying Fish Partners in Seattle, also said the two cities are better positioned to prepare for significant economic growth than the two cities. before the advent of Amazon. "Nobody – including Amazon – knew that they would grow as much," she said. "We had a massive influx of people who moved here as a result, and this was just not planned."

Amazon's legacy in Seattle

In Seattle, where Amazon was founded, rents rose 39.8% in the last five years and median income jumped $ 10,000 in a single year in 2015.

According to a Seattle Times analysis, the homelessness rate in the city exceeds that of other major cities, including New York City and Los Angeles, with 54 people homeless per 10,000 population.

But the issue of homelessness in Seattle is of course complex, said Alison Eisinger, executive director of the Seattle / King Homelessness Coalition, not-for-profit. Amazon's rapid expansion in the region has had a significant impact on homelessness, but it is not the only cause.

"There is no straight line between the advent of Amazon and homelessness," she said. "But what I want to say is that Amazon certainly contributed to the Seattle affordable housing crisis and the shortage of affordable housing has absolutely contributed to the homelessness crisis in our community."

Since they can plan ahead, the Amazon city headquarters will take steps to prevent negative effects, she said. Amazon itself can also address the issue head-on: in Seattle, it has taken a number of steps to tackle homelessness, including allowing Mary's Place, a shelter for homeless people, to settle in one of its buildings and employ employees of FareStart, a training program for – a history of income to work in the food industry in its office buildings.

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A spokeswoman for Amazon told MarketWatch that the company was committed to the communities where its employees live and work. As part of the No Kid Hungry program, he has awarded grants of up to $ 7,500 to 100 schools in the United States to feed children in need of lunch, and has donated more than $ 40 million to homelessness causes in his hometown of Seattle. These measures are not enough to offset the negative effects of Amazon on the housing market, said Eisinger. More concrete measures should be taken.

"Their work has been charitable but not transformative," she said. "The question is to what extent are they willing to be good corporate citizens and to contribute in advance to maintain the existing housing stock, rent on site and a tide that lifts all the boats instead of overwhelming them? the workers."

How DC and NYC are getting ready

In northern Virginia, officials are already laying the groundwork for managing headquarters changes, said Katie Cristol, Chair of Arlington County Council. The city will contribute $ 7 million a year over the next 10 years to build affordable housing for people who earn between 40% and 60% of the median income as part of a program for the arrival of Amazon.

"The challenge of solving the housing affordability problem in the region was waiting for us on Monday, and it will still be after the announcement of the new headquarters," she said. "We believe these revenues will help fund a safety net for our neighbors in need."

Look also: The increase in the number of homeless is increasing in the most expensive areas with the increase in the number of Americans

Other cities competing to host Seat 2 had their own plans to prevent homelessness if Amazon had selected them. Dallas reportedly asked Amazon to spend $ 100 million on public education and homelessness efforts. Boston has offered to spend $ 75 million over 10 years to maintain house prices in the proposed QG2 area.

As part of its agreement with the City of New York for the construction of HQ2, Amazon has agreed to give space on its campus for an incubator of technology startups and for use by artists and industrial companies, and will donate a site for a new primary or intermediate audience. school. The NYC Economic Development Corporation has not responded to a request for comment. In northern Virginia, Amazon will help build a pedestrian bridge over the next 10 years.

Only 3 out of 10 homes are affordable for low-income families

New York politicians demand more measures to counter rising housing prices as Amazon sets up its headquarters in the industrial district of Long Island City. Alexandria Ocasio-Cortez, the newly elected Democrat MP representing Queens, says Amazon and the other companies should "[pay] their fair share "to maintain affordable rent and decent wages in New York.

"Without quick action to increase the availability of affordable rental housing for the lowest-income earners, Amazon's decision to locate its head office in New York and northern Virginia will only worsen the serious housing shortage in these communities "

In New York and northern Virginia, there are only three affordable rental housing units for 10 families with the lowest income, and three out of four in the same group spend more than half of their income on rent, National Low Income Diane Yentel, President and CEO of the Housing Coalition.

"Without quick action to increase the availability of affordable rental housing for the lowest-income earners, Amazon's move to head office in New York and northern Virginia will exacerbate the critical housing shortage. these communities, "she said. "The opening of new Amazon offices in these high-cost cities without addressing the acute shortage of affordable rental housing will lead to further increases in rents, more frequent evictions and travel and, in the worst case, homelessness." . "

Unique challenges in Q2 cities

According to the Coalition for Homelessness, more than 63,000 people in New York were homeless in December 2017, a record number of 82% increase over the last decade. The number of homeless people in Washington, DC has been declining for two years and in December 2017 there were 6,904 homeless people in the district.

Homelessness in New York has been exacerbated by the lack of affordable housing, said Giselle Routhier, policy director at the Coalition for the Homeless, a New York-based advocacy organization. The group has called on New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo to invest in "heavily subsidized housing" for New York's record homeless population to compensate. the effects of the arrival of Amazon. "

"At a time when affordable housing is scarce, broken trains and homelessness are at record levels, the last thing we should do is pay money to one of the most expensive companies." rich of the world, "said Routhier. "Amazon's expansion will certainly boost our economy, and that's great – but we should not pay rent for a trillion dollar business when so many families can not afford theirs."

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