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Amazon Shortlist Cities Worried About Impact On Real Estate Prices

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As Boston tries to lure Amazon’s second headquarters to the eastern part of the city it is facing concerns that it would result in displacements of lower-income residents and increasing costs in the city.

According to a report in the Wall Street Journal, the rents in the eastern part of Boston known as Eastie are already rising resulting in displacements. If Amazon was to set up its second headquarters there it could pressure vulnerable residents even more. “I think we should be concerned,” said Sal LaMattina, a retired city councilor and lifetime East Boston resident, who has long advocated for neighborhood development in a recent interview with the Wall Street Journal.

Jenny Schuetz, a Brookings Institution fellow said Boston isn’t the only city worried about the impact Amazon would have on existing residents who won’t command the salaries of the high tech workers that would be employed by Amazon. If well-paid employees come to the city it could put further upward pressure on rents, shutting out more price sensitive dwellers.  “I think a lot of places on Amazon’s shortlist, it’s likely to drive up real-estate values and put pressures on specific neighborhoods,” Schuetz told the Wall Street Journal in the report. Those concerns aren’t only reserved to expensive cities like Boston however. The paper noted that even in Pittsburgh, where real estate and rent are modestly priced, concerns about Amazon are rising. Zillow for instance forecast that if Amazon’s second headquarters was in Pittsburgh annual rent would increase 0.9 percentage points. Without Amazon, the rents were projected to decline. Meanwhile in the Nashville area rents would increase 2.4 percentage points according to the Zillow data, reported the Wall Street Journal.

Still, while there are concerns about rents, the cities also are aware that Amazon coming to their neighborhood will create more jobs. As a result, many of the officials and residents of the twenty cities that made it to the Amazon shortlist are upbeat about landing the second headquarters. “That would create a lot of employment opportunities,” said Debra Cave, who leads a local civic group in East Boston told the Wall Street Journal.

 

 

 

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