By Carlo Versano
In the end, it was all about the talent.
Amazon this week chose the talent pools of the D.C. and New York metro areas to base its split "HQ2" expansion after a year-long search during which city officials from across the country begged the e-commerce giant for the high-tech, highly-paid jobs they hoped might be a boon for economic development.
The irony: the company will be bringing as many as 50,000 of those jobs to areas that can barely serve the residents, workers, and commuters they already have.
The Big Apple is already facing a dual crisis of a lack of affordable housing and a chronically underfunded, rapidly-decaying subway system.
On Thursday, the MTA, the state-run agency that operates public transit in New York, presented options for a cocktail of fare and toll hikes that it said would be needed to fill holes in a budget gap. That's apart from the $40 billion or more the agency requires to undertake the costly repairs needed to modernize the system.
The idea of adding 25,000 new commuters to a neighborhood served primarily by one of the most overcrowded lines in the system is already causing anxiety among current residents of Long Island City.
At the same time the MTA struggles to stay operational, New York State is giving Amazon more than $1.5 billion in taxpayer-funded incentives, which works out to about $48,000 per job. That's in addition to $1 billion in potential city tax credits, and a federal tax break, since Long Island City is considered a distressed "opportunity zone" in the new tax law, despite having a median income far above the national average.
In the suburbs of Washington, where traffic congestion is already among the worst in the nation, an affordable housing crisis has been building for years. Rising rents and home prices in cities like Arlington, which will be home to one of the new Amazon ($AMZN) hubs, have forced lower and moderate-income residents further from the city (and thus lengthening commute times and worsening traffic).
Millennials who work in D.C. and have been saving to buy their first homes will almost certainly be among the first to feel the pinch. One Arlington condo jumped in price by $20,000 overnight when the Amazon decision was first reported.
This sense that Amazon played into an already raging debate over income inequality in America was the basis for the protests that erupted in Queens following the announcement, led in part by Representative-elect Alexandria Ocasio-Cortez, who castigated the governor and mayor for what she says amounts to taxpayers paying Amazon to hasten gentrification and worsen the housing crisis ー all for the flimsy return of "economic development."
Meanwhile, on the other side of the East River, Alphabet's Google ($GOOGL) is quietly doubling its own New York City footprint with a massive new real-estate deal in the works. A deal that Google says it will make without subsidies ー or the promise of a helipad.