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Comment by vkou | Hacker News Reader

Which will drive up the cost of life for people who currently live in Philadelphia and won't work for Amazon. It will, however, vastly enrich their landlords.

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I'm not sure why you're getting downvoted. This is exactly what's happened to Seattle. http://www.seattlepi.com/seattlenews/article/What-does-it-re...

This is an interesting position that I am quite conflicted about. From the conclusion of the original post it seems like he/she would prefer company that brings in high salary jobs not to relocate to the area if the company itself would not be employing people that originated from the area for those high salary jobs. This is because he/she perceived that there is no benefit to the economy since the local does not get those salary, and the local would have to suffer the consequence of rising living cost.

But my concern would be how would a city ever improve its living condition if it lack funds to maintain schools and community and the resident themselves are unwilling to bring in these company?

Even if amazon doesn't pay taxes, the employees that work there will (through buying stuff and living there), doesn't that give the city an opportunity to reinvigorate the city with new tax revenue and potentially provide a better community and education for the next generation?

"The Times reported in July that 74 projects were under construction in downtown Seattle. Two-thirds of the buildings will be residential towers, with most being apartments for rent, not condos...Seattle has gone from one of the most affordable West Coast cities to one of the least, Aaron Terrazas, a senior economist at Zillow, told CNN Money. The city and developers have tried to alleviate that by building tons of apartments. Downtown has added 20,000 units in the past decade, with another 27,000 on the way...But nearly all the buildings are considered luxury real estate, with rents 40% higher than in older buildings. The dueling 41-story Insignia towers include amenities like a "sky retreat," an indoor lap pool and sauna, and a screening room...From 2005 to 2015, Seattle's median rent jumped by three times as much as the national figure did. In downtown Seattle, average rent has climbed to $2,400 a month, meaning you'd need to make about $96,000 to afford it."

http://www.businessinsider.com/amazon-hq-photo-tour-seattle-...

And another article: http://gawker.com/how-amazon-swallowed-seattle-1724795265

I acknowledge the problem, but at the same time I am not sure what is the solution. Should Amazon relocate to a brand new city where it is not possible to gentrified people or should amazon just relocate to other country and cause problem there? I would think both is not optimal since Amazon does provide a net positive impact on the local economy. And I would even argue that the city could take advantage of this new tax source to improve education and perhaps output engineer talents that is much in demand now and in the foreseeable future

The problem is that average rent increasing isn't actually a good metric on how it is affecting the cost of living for people that previously lived there. This sounds unintuitive at first, but turns out to be fairly simple.

The first thing to consider is that the density on new construction for these is significantly higher - a lot of land that had 80 units before might now have now have an additional 640. Most of these apartment buildings downtown are building up significantly higher than previous places. Going from 4 stories to 30+. Some seriously tall high rises.

And then it's a good thing that these are targeted as luxury accommodations, because they're making the high income newcomers their targets - that means there are fewer of these newcomers targeting the existing housing increasing that price.

Now, you have luxury housing that exists in much higher quantities than the previous housing - this has a disproportionate impact on the city average, but doesn't say anything about the impact on the majority of existing housing outside of these new constructions.

That isn't to say it hasn't gone up as well, but you have to look at how much the supply of this existing housing has contracted and if that contraction has pushed the demand up enough that those prices have significantly increased as well. This isn't captured in looking at the average rent price of the city.

> Even if amazon doesn't pay taxes

I think this is being overstated. Amazon may get a very generous tax break for something like twenty years, but they will almost certainly still be paying more net tax yearly than all but the very largest employers in the area.

That's the cost of being economically successful. That's because there is more competition for workers which drives up salaries, and for living spaces which drives up their cost. So even if you don't work for Amazon you're likely to benefit from the more competitive marketplace.

> That's the cost of being economically successful.

This is a cost disproportionately borne by low-income renters currently living in a city. If they have a choice, why should they pay it?

> That's because there is more competition for workers which drives up salaries, and for living spaces which drives up their cost.

Amazon workers will always outbid locals for housing. Unless 50,000 housing units will be built in the next few years (Contrary to the interests of property owners), this will reduce the quality of life for people not working for Amazon. They'll get to enjoy higher rents, longer commutes, and smaller disposable incomes.

People getting gentrified out where they live rarely benefit from the more competitive marketplace, or from coffee shops selling $14 avocado toast.

Adding jobs to an economically depressed area, with a surplus of housing benefits most people living in it. Adding jobs to an economically vibrant area, with a shortage of housing harms most people living in it. An Amazon office in Detroit would be great for the city. An Amazon office in San Francisco... Not so much.

Disclaimer: I don't live in Philadelphia, so I don't know where it is on the spectrii of 'economically vibrant' and 'housing shortage.'

I'm not seeing the point that you're trying to make. Are you suggesting that Philadelphia (or any major metropolis) would not benefit from the sudden windfall infusion of 50,000+ high-paying jobs? I think every small business owner in Philly is probably drooling at the prospect of Amazon dumping tens of thousands of people with disposable incomes at their front door.

Small business owners are definitely not drooling at that prospect. They usually have very slim margins and their rent will sky rocket as the landlords get greedy. Only a select few will remain usually due to being hip local places that already have high foot traffic that can successful raise the prices of their 'famous' cheesesteaks or opening the property. But for the average small business owner running the typical depressed looking establishment they'll see their repeat customers disappear one by one. They won't have the necessary capital to reinvigorate their image or pay their tremendously higher rent when the landlord decides they want to attract Starbucks to that location. Look at Bleeker street, the lower east side, Chinatown, the east village all in NYC. All places I've seen personally change rapidly over the years. I've talked to many owners, the story is always the same, we're being forced out of our lease. Being in tech I'm certainly part of the problem. And to be honest most of the new places that come in, particularly restaurants, are often better than what was there before. But let's not say the existing small business owners are drooling, they're almost certainly filled with dread at the prospect.

Philly is economically vibrant and has an affordable housing shortage (although with the number of units currently being built, this might change in a year). The closer you are to jobs, the less affordable. Wages here are depressed compared to other US cities, however.

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