Pittsburgh Just Dodged the Amazon Bullet
We should be relieved that the tech giant opted not to move in.
Ever since Pittsburgh started popping up on lists of the nation’s most livable cities, locals have taken pride in that designation. Problems with the methodology of such rankings aside, Pittsburgh is a place where you don’t have to break the bank to afford rent. Where you can live in a single-family home with a back yard and still be at work Downtown in 20 minutes. Where most of us have enough money left in our pockets for a night out.
If Amazon had chosen Pittsburgh as the site of its second headquarters, all of that could’ve gone away.
The nationwide civic horse race to attract Amazon’s HQ2 has led to a tie, with both Queens and Arlington, Va., getting a massive influx of the company’s workers and business. Undoubtedly, there will be big changes in those areas — many of them positive. But others will strain the housing market and economic stability of those areas in a way that Pittsburgh will be happy to avoid.
Let’s start with rent. The sudden arrival of workers in the tens of thousands can only drive housing prices up; a New York Times report used Zillow data to estimate that rents in Pittsburgh would’ve increased an average of $96 per month were Amazon to have winded up here. (The same data suggests that, without Amazon, we’re actually due for decreasing rents in the coming years, so the net impact would be higher than $96). That’s not as big of a difference as some markets might’ve seen under Amazon, according to the same data, but more than enough to push lower-income residents into less desirable housing.
Such increases have the potential to snowball, as well. In Seattle, the site of Amazon’s original headquarters — a metro area only nominally more populous than Pittsburgh — a continued tech boom has led to rents similar to those found in Los Angeles and New York.
In San Francisco, where tech giants have driven the cost of living into the stratosphere, the differences are even more dramatic. The median rent for a one-bedroom apartment in San Francisco is $3,460 per month, according to Business Insider. The median cost of buying a home is more than $800,000. In other words, a place that would cost you $1,000 a month in Pittsburgh will cost three times that in San Francisco.
Rent isn’t the only expense that goes up in such cases, Business Insider adds — gas prices in San Francisco are more than 30 percent higher than the national average, the cost of a mid-range meal is double what you’d expect in most cities and even groceries are more expensive.
To be fair, wages have increased in Seattle and San Francisco, as well. But such increases in take-home pay can come at the expense of some civic control.
Noting the increased housing costs — and their inevitable byproduct, a rise in homelessness — Seattle earlier this year pushed for a per-employee tax levied on large corporations to fund housing initiatives and hopefully get people off the streets.
Amazon — a company notorious for paying nearly nothing in tax revenue — fought tooth and nail against the proposed tax, threatening to halt development in the city were it passed.
Despite the support of city council, the measure was not enacted.
That’s the kind of influence a gargantuan employer can have on a market. There’s no reason to believe that the climate would’ve been much different for Amazon in Pittsburgh, particularly after local leaders repeatedly refused to reveal the concessions they promised Amazon, despite court orders that they do so. (A statement released after Amazon’s HQ2 announcement promised that the pitches would finally be revealed in the coming days.)
Pittsburgh was willing to make sacrifices to woo Amazon before it got here; were we likely to get tough on the company down the line?
And yes — let’s talk traffic. Either Amazon would’ve moved into the booming tech area on the East End, which is virtually inaccessible by highway (leading to endless snarls throughout those dense neighborhoods), or it would’ve picked a more suburban campus.
You know what a suburban campus means?
Somebody’s going to have to go through a tunnel. And we’re … not good at that.
There certainly would’ve been benefits to an Amazon headquarters in Pittsburgh. But it’s tough to imagine that it would be a net positive for all Pittsburghers; the data does not bear that theory out. We are already fortunate to have a growing tech community, expanding at a manageable rate for a market of our size.