Amazon’s decision to place its new offices in New York City and Northern Virginia will likely have an effect on the affordability of homes in the area, pricing many working class families out of these areas.
On Tuesday, Amazon said its second headquarters would be located in Long Island City, which is in Queens, New York, and Crystal City, which is a part of Arlington, Virginia.
For its offices, Amazon chose two New York sites that were supposed to be residential development for middle and low-income people, and now most of those intended affordable housing units will be part of the company’s offices instead, according to Politico. Plaxall, which was going to ask to build the new homes, may still be able to use about two acres for housing, but hasn’t decided if it will yet. In any case, about 1,500 units of affordable housing will likely no longer be available.
New York City Economic Development Corporation spokesperson Stephanie Baez defended the Amazon deal and said to Politico, “Tackling the affordability crisis means building more affordable housing — but it also means creating more good-paying jobs. Development of commercial office space around Anable Basin will offset concerns about residential overdevelopment that have been expressed by some community residents.”
Amazon is expected to receive $1.7 billion in public subsidies and $500 million in capital grants from New York City and New York state. According to Curbed NY, Amazon’s initial investment in workforce development is $15 million, or less than 1 percent of the overall public subsidy.
New York is in great need of affordable housing. A 2017 report from NYU researchers shows that the share of housing units for low-income families in the area shrank by 12.9 percent from 2006 to 2016.
Some elected officials have expressed skepticism about what Amazon will do for residents and whether it was worth the generous subsidies the state and city offered.
City Council speaker Cory Johnson (D) said in a statement, “I don’t understand why a company as rich as Amazon would need nearly $2 billion in public money for its expansion plans at a time when New York desperately needs money for affordable housing, transportation, infrastructure and education.”
Rep.-elect Alexandria Ocasio-Cortez (D-NY) tweeted, “Displacement is not community development. Investing in luxury condos is not the same thing as investing in people and families. Shuffling working class people out of a community does not improve their quality of life.”
Northern Virginia residents and housing experts are also concerned about housing affordability.
Real estate prices in Northern Virginia have already increased, with one real estate agent telling Fox 5 that he noticed another agent “raised the prices of two condos in Crystal City by $20,000.”
In the southern part of Arlington County, more than half of the households rent, which means many families could be displaced, Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, told The Washington Post. That also means the area could become a lot more white, since a much larger share of the Black and Latinx families in the area have lower incomes than white families.
According to the Urban Institute, housing production has not kept up with population growth in the Washington, D.C. metropolitan area and rents and home prices continue to increase. If the area needs 235,000 more housing units by 2025 to keep up with expected job growth, as the Metropolitan Washington Council of Governments estimated, a huge boost in new jobs may exacerbate the issue.
Arlington County leaders will redirect existing investments in affordable housing to focus on where the new headquarters will affect housing, but they will not boost financial commitment to affordable housing, according to Arlington Now. Michelle Winters, executive director of Alliance for Housing Solutions, which is based in Arlington, told the outlet, “While additional subsidy and investment is absolutely needed, it’s not the only thing that it’s needed. We absolutely need to ramp up the pace housing is added to the county.”
The area is losing affordable homes at a rapid pace. A Northern Virginia Housing Alliance report found that the county lost 335 homes that were affordable for a $49,260 one-person household and $70,320 for a four-person household in 2017. From 2000 to 2018, Arlington County lost more than 14,500 market affordable units. A 2006 paper on income inequality and housing affordability found that unsurprisingly, in tight housing markets, “the poor do worse when the rich get richer.”
Derek Thompson, staff writer for The Atlantic who covers economics and labor, argued these Amazon deals should be illegal and wrote that Congress could pass a law that banned these sorts of deals across the country. Thompson wrote, “it’s still ludicrous for Americans to collectively pay tens of billions of dollars for huge corporations to relocate within the United States.”
Looking at Seattle, the news of an Amazon second headquarters looks even less promising. In Seattle, where Amazon’s original headquarters is located, home values shot up 11 percent in the last year in comparison to a 6.9 percent per year average increase and there is a lack of affordable housing. Amazon’s record as a corporate citizen is questionable at best. The number of people who are unhoused in Seattle continues to increase. In Seattle/King County, 52 percent of the unhoused population was unsheltered, which means they are living on the street, in parks, or in cars. The city has responded by building anti-homeless architecture, such as arm rests that prevent people from lying down in benches comfortably.