Amazon Hustle Gets Poverty Advantage in the Region, Reducing Moderate Housing Development

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According to the general principle, whether it is "conservative" or "liberal", it would seem unwise to offer location incentives to large corporations. And the coup of Amazon that is to get three benefits for three areas is a perfect example. The company will probably get more than it admitted and reporters reported, while low-income people pay the price for the width.

The misguided nature of such incentives seems obvious. On the left, you give money to companies generating significant income and profit levels, reduce the funds available for social purposes and, in doing so, increase the redistribution of income and wealth upwards. for those who have them in abundance.

From the right, there are other problems that intersect. This is as far from the market economy as one could get when companies see a guaranteed guaranteed profit – which happens when costs go down – by making a decision already designed to improve their business. This decision increases the tax burden of other citizens and the benefits to the state and the city can be largely offset by these expenses.

The details were completely unclear. It is assumed that Amazon will create a total of 55,000 new jobs (25,000 in New York and Virginia and 5,000 in Nashville.) But as Amihai Glazer, professor of economics at the University of California, Irvine, "If it's 50,000 jobs [in a large city]how many of them will be people moving from one existing job to another? "

In other words, are there any jobs that will provide work for people who lack them in the selected cities? Will there even be an influx of new residents generating additional expenditures and tax revenues? Or will the new posts be a game of musical chairs in which the work of the workers' department is not filled as quickly, if at all? And what do you think of the chances that low-income people will get the highest-paying jobs in question?

Then comes the question of the incentives offered to Amazon. The company claimed $ 2.8 billion in performance-based incentives. Performance monitoring is more difficult than people usually realize and is often poorly done. No politician wants to admit that such a "good" business was not so exciting in the final tally.

Amazon also said that it was seeking additional incentives through various programs. Because it was part of an ongoing process, the company obviously did not include those of the total mentioned.

The Policy Resource Center, Good Jobs First, tracks development grants. She deepened the Amazon agreement and estimated that the final total would approach $ 4.6 billion in benefits paid to the company. In addition, they said the reported cost of $ 48,000 per job in New York would be more likely to rise to $ 112,000. Click on the link to find out how the money could be added.

As the group notes, it is unusual for a company to provide a list of grants. Amazon was booming about it. Here are some of the omitted items:

• Under the Excelsior program, a subsidy from the state of New York is expected to be in the range of $ 1.525 to $ 1.7 billion.
• A portion of Amazon's property taxes is diverted from the general fund of the city to focus on improving the project area, which means enhancing the value of Amazon's property.
• Given that the Long Island City site is a so-called opportunity zone, intended to strengthen low-income urban and rural areas through community development programs, affluent people will be able to invest and avoid poverty. federal capital gains tax. Good Jobs First could not estimate how much this could happen.
• Virginia Tech University will invest a billion dollars in a new campus to build near the site of Amazon Crystal City.
• New York has recently announced $ 2.4 billion in infrastructure improvements for Long Island City.

There could be more, too. It is not that one of the parties involved will do everything possible to tell you.

As pointed out by Intercept, the designation of the Opportunity Zone for Long Island City seems particularly disconcerting:

The fact that Long Island City is an area of ​​opportunity designated by Amazon could be exploitative is particularly mind-boggling as the area with high gentrification has no trouble attracting new investment, has a poverty rate of 10% ( half that of New York) and has a median income of $ 130,000 a year.

While the vast majority of areas of opportunity are characterized by high poverty rates, about 200 of the 8,700 census tracts approved by the Treasury Department are like Long Island City, economically prosperous but close to poverty. This includes neighborhoods in affluent cities like Los Angeles, San Jose, Seattle and Portland. Treasury Secretary Steven Mnuchin said last month that he was expecting areas of opportunity to attract investments of $ 100 billion.

Thus, investments in areas that are near poverty. Why? Fainting sofas and strands of pearls to stand?

And, as Politico pointed out, the deal with Amazon will upset previous affordable housing plans in the region.

Two sites that will house the e-commerce giant's future offices were originally intended for residential development, before Amazon chose them in a national competition for its new headquarters.

Most – if not all – of this planned housing is now off the table.

"The fact that massive public subsidies are helping to eliminate affordable housing is the last reason this bad deal has to be torn up and thrown away," said Senator Michael Gianaris, who represents Long Island City.

But then, low-income housing could attract some of these poor into neighboring areas and make the area of ​​opportunity a low-income area in fact and not just a designation.

You are supposed to shake things up in business, as in hard work and fast. Do not jostle in the sense of fooling the suckers.

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According to the general principle, whether it is "conservative" or "liberal", it would seem unwise to offer location incentives to large corporations. And the coup of Amazon that is to get three benefits for three areas is a perfect example. The company will probably get more than it admitted and reporters reported, while low-income people pay the price for the width.

The misguided nature of such incentives seems obvious. On the left, you give money to companies generating significant income and profit levels, reduce the funds available for social purposes and, in doing so, increase the redistribution of income and wealth upwards. for those who have them in abundance.

From the right, there are other problems that intersect. This is as far from the market economy as one could get when companies see a guaranteed guaranteed profit – which happens when costs go down – by making a decision already designed to improve their business. This decision increases the tax burden of other citizens and the benefits to the state and the city can be largely offset by these expenses.

The details were completely unclear. It is assumed that Amazon will create a total of 55,000 new jobs (25,000 in New York and Virginia and 5,000 in Nashville.) But as Amihai Glazer, professor of economics at the University of California, Irvine, "If it's 50,000 jobs [in a large city]how many of them will be people moving from one existing job to another? "

In other words, are there any jobs that will provide work for people who lack them in the selected cities? Will there even be an influx of new residents generating additional expenditures and tax revenues? Or will the new posts be a game of musical chairs in which the work of the workers' department is not filled as quickly, if at all? And what do you think of the chances that low-income people will get the highest-paying jobs in question?

Then comes the question of the incentives offered to Amazon. The company claimed $ 2.8 billion in performance-based incentives. Performance monitoring is more difficult than people usually realize and is often poorly done. No politician wants to admit that such a "good" business was not so exciting in the final tally.

Amazon also said that it was seeking additional incentives through various programs. Because it was part of an ongoing process, the company obviously did not include those of the total mentioned.

The Policy Resource Center, Good Jobs First, tracks development grants. She deepened the Amazon agreement and estimated that the final total would approach $ 4.6 billion in benefits paid to the company. In addition, they said the reported cost of $ 48,000 per job in New York would be more likely to rise to $ 112,000. Click on the link to find out how the money could be added.

As the group notes, it is unusual for a company to provide a list of grants. Amazon was booming about it. Here are some of the omitted items:

• Under the Excelsior program, a subsidy from the state of New York is expected to be in the range of $ 1.525 to $ 1.7 billion.
• A portion of Amazon's property taxes is diverted from the general fund of the city to focus on improving the project area, which means enhancing the value of Amazon's property.
• Given that the Long Island City site is a so-called opportunity zone, intended to strengthen low-income urban and rural areas through community development programs, affluent people will be able to invest and avoid poverty. federal capital gains tax. Good Jobs First could not estimate how much this could happen.
• Virginia Tech University will invest a billion dollars in a new campus to build near the site of Amazon Crystal City.
• New York has recently announced $ 2.4 billion in infrastructure improvements for Long Island City.

There could be more, too. It is not that one of the parties involved will do everything possible to tell you.

As pointed out by Intercept, the designation of the Opportunity Zone for Long Island City seems particularly disconcerting:

The fact that Long Island City is an area of ​​opportunity designated by Amazon could be exploitative is particularly mind-boggling as the area with high gentrification has no trouble attracting new investment, has a poverty rate of 10% ( half that of New York) and has a median income of $ 130,000 a year.

While the vast majority of areas of opportunity are characterized by high poverty rates, about 200 of the 8,700 census tracts approved by the Treasury Department are like Long Island City, economically prosperous but close to poverty. This includes neighborhoods in affluent cities like Los Angeles, San Jose, Seattle and Portland. Treasury Secretary Steven Mnuchin said last month that he was expecting areas of opportunity to attract investments of $ 100 billion.

Thus, investments in areas that are near poverty. Why? Fainting sofas and strands of pearls to stand?

And, as Politico pointed out, the deal with Amazon will upset previous affordable housing plans in the region.

Two sites that will house the e-commerce giant's future offices were originally intended for residential development, before Amazon chose them in a national competition for its new headquarters.

Most – if not all – of this planned housing is now off the table.

"The fact that massive public subsidies are helping to eliminate affordable housing is the last reason this bad deal has to be torn up and thrown away," said Senator Michael Gianaris, who represents Long Island City.

But then, low-income housing could attract some of these poor into neighboring areas and make the area of ​​opportunity a low-income area in fact and not just a designation.

You are supposed to shake things up in business, as in hard work and fast. Do not jostle in the sense of fooling the suckers.