Being HQ1 has been no picnic.
We see you, all you cities courting Amazon. Yesterday was deadline day for municipalities aspiring to host HQ2, the retail behemoth’s second headquarters. With that prize come gaudy economic development numbers—$5 billion in investment and 50,000 jobs—and big dreams. About 100 cities are likely to submit their bids, hoping to become the company’s newest soul mate. And then many months of anticipation await the lucky finalists.
We here in Seattle remember what it was like to feel so giddy, so full of possibility. And we still feel that way sometimes.
But over time our infatuation has matured into something more nuanced. We’ve learned to recognize both the good and the bad that comes with sharing our lives with Amazon.
When you become Amazon’s new trophy city, things might get a little weird between us. So, while we’re still on good speaking terms, let us offer you these five pieces of advice.
1: Prepare to give up a little personal space
People and businesses will tolerate living into a shoebox to be near Amazon’s headquarters. So build lots of shoeboxes. Go more dense. Tiny apartments and tiny storefronts near good transit will allow the largest number of people to tap into the opportunities that cluster around an Amazon headquarters.
It won’t be easy. There will be fights about parking and traffic and congestion and displacement. Existing residents will have concerns about all these newcomers moving in who they perceive to be just “passing through,” without established roots in the neighborhood. But if you don’t build these tiny spaces, the Amazonians may chase everyone from fire fighters to the elderly from even the darkest corners of your rental market.
Seattle learned this lesson the hard way: 57 people move here every day, but the city builds only 18 new places to live every day.
And we now have the third-largest homeless population in the country.
2: Start family planning now
Most of the young tech bros (and the smaller number of young women working in tech) packing into those shoeboxes you just built don’t want to live like that forever. Either they can’t stand Amazon’s famously intense work culture and wash out, or they don’t get promoted and decide to move on, or they want to start families and need more space. Some will form tech startups of their own, or perhaps artisan cupcake restaurants. (Seattle now has at least three rival artisan-cupcake chains and hundreds of doggie day cares, including one that offer blueberry facials.)
But here’s the thing: Those ex-Amazon workers are going to want three bedrooms. If you don’t start building family-sized apartments and starter homes for them by yesterday, they’ll leave. That’s economic leakage.
Amalia Leighton, a civil engineer and planner in Seattle, refers to children as an indicator species of a city’s economic health. By this metric, Seattle is sick: We have among the lowest percentage of children in the nation. But that could change, she says. “Even tech workers have kids someday. We’re hoping that they can be able to stay in the city.”
Builders generally resist including large units in apartment buildings, because studios and 1-bedrooms enjoy higher demand in tech hubs. Getting them on board requires incentives, which cities must justify in terms of the economic benefit more mature families can bring to a city.
3: Take the tech sector’s diversity problem very seriously
When Amazon supercharges your city’s tech sector, the tech sector’s poor record of hiring African Americans and Hispanics becomes your city’s problem.
Despite the tech industry’s strong record for hiring Asian-Americans (who, according to a report on Silicon Valley tech workers, get heavily hired for production jobs but receive fewer promotions), Amazon has not yet been recognized as a force of diversity. Seattle’s African-American population increased by 3.6 percent since 2010, according to University of Washington sociologist Tim Thomas—but this group’s share of the racial distribution fell from 7.7 percent to 6.9 percent during the city’s recent big growth spurt.*
Amazon’s overall numbers suggest diversity—their workforce is 39 percent female globally, and 21 percent African American in the U.S.—but that’s only because they include distribution warehouse workers and office assistants, says Deena Pierott, founder of iUrban Teen, a nonprofit that connects young black males with the tech industry. “Most of the people of color are in the entry-level positions, but not in the higher rankings and management,” she says. “And that’s not uncommon. Amazon’s not the only one to have numbers that look like this.”
Pierott blames the industry’s talent pipeline: You need to get black and Latino kids interested in tech when they’re still in elementary school, she says, and that can be more expensive than importing them from out of state. An Amazon spokesperson told us it’s invested 60 million dollars nationally in diversity-building programs. But the fact that black and Hispanic communities are still struggling in tech hub cities is all the evidence you need that it’s not enough. “Come on Amazon,” she says, “you can do more.”
4: Invest heavily in mass transit or prepare for a traffic crisis
Seattle’s booming bus ridership is bucking national trends, and it doesn’t take long to see this first-hand when buses packed with Amazonians blow past you at the bus stop, because they can’t fit any more passengers. And when you finally do get on a bus, it’ll get stuck in traffic: The amount of time Seattle residents spend delayed by highway traffic has doubled in the last 5 years.
5: Remember, Amazon’s true love isn’t you—it’s the customer.
That means you have to consider the possibility that even as Amazon and your city get to know each other, Amazon is still thinking of the customer on the side, trying to drive down its costs and gain even more market dominance.
Many experts believe that Amazon has most likely already picked the location for its new headquarters—it’s just milking the HQ2 competition for intel about exactly how much cities are willing to give up to cozy up with the company. And it will turn around and use that against those cities when it wants to build other facilities around North America. If this was a poker game, Amazon just got most of the continent’s major municipalities to show their hands.
For precedent, look at the Puget Sound Business Journals’ expose on how Amazon played cities against each other to squeeze out $1.2 billion dollars in incentives for its fulfillment centers. It’s not surprising: After all, this is what internet companies are good at. They find ways to monetize your personal information.
You cities lusting after Amazon now might see only a dynamic 21st century megacompany that has the power to put you (or, in the case of superstar entrants like New York City and Washington, D.C., keepyou) in the winner’s circle. And you’re right! All that wealth can be a lot of fun. Seattle’s local tech billionaires have brought the city such amenities as the Museum of Pop Culture, funded by Microsoft’s Paul Allen. They can throw money after space-facing boondoggles, some of which have become real companies. Jeff Bezos’ Blue Origin, an aerospace business focused on rocket travel, is now leading an economic renaissance in the industrial area south of Seattle.
It’s just that the prosperity isn’t shared, and the things you lack—be it housing, transit, or a diverse tech pipeline—will define you as a city. Here, we never quite managed to get an income tax in place, and now our state and county governments can’t scrape together the cash to properly fund the transportation and education systems that the area needs to keep the boom going.
There’s a useful history lesson here, too: 120 years ago, Seattleites fleeced the hopeless dreamers on their way to the Klondike Gold Rush up in Alaska. It’s a well known truism around here that the real money wasn’t in the gold—it was in outfitting the miners. That’s not so different from the way Amazon’s treated industry after industry.
So here’s a final word of advice for you, HQ2 city, whoever you are. Amazon still loves us. And even though it threatened to leave us, we insist on believing that we’re still number one.