The United States has always been a country where free enterprise has been the main driver of development. Whether it was Andrew Carnegie creating factory towns or Silicon Valley building one of the most concentrated centres of technological development in the world, major companies have always reshaped their surroundings.
This brings us to the latest example of this phenomenon; Amazon’s search for a city to host its new headquarters. According to CNBC, the hosts would get more than 50,000 jobs and around $5 billion in construction business. Both of these would be a major boon for any city, and competition has gotten fierce. Business Insider reports that the application deadline to host the new headquarters was yesterday.
In the same article, Business Insider points out the lengths that some of these applicant cities have gone to in order to secure their bid: Missouri proposed a hyperloop to link their three largest cities, Dallas offered a new bullet train to Houston and places such as Memphis and New Jersey are ready to offer massive tax incentives.
There is no question that the winner stands to gain a hefty amount of jobs and business for their citizens, but there are other consequences as well.
On a shareholder level, the costs associated with the massive construction project, new jobs and potential hiccups along the way open up Amazon’s stock to all sorts of potential problems.
On a local level, citizens will see the price of real estate skyrocket. CNBC predicts that:
Unless your town is extraordinarily full of tech workers already, many of those jobs will go to people moving in from elsewhere.
New workers means a major burst of home-buying and renting, but it also means that property values and costs will fly up as well. If you live in one of the applicant cities, be sure to consider this.
Lastly, Amazon’s search for a second home outside of Seattle has shown how important big tech has become to urban development. Until now, Silicon Valley and San Francisco have been the home of the vast majority of the major tech companies. As a result, Amazon’s move has shown these companies just how far cities are willing to go to accommodate them and has shown citizens what it takes for major developments such as hyperloops to even get considered. The two are intrinsically linked and it will be interesting to see how this trend develops.
Amazon’s search will affect investors, home owners and even those who are don’t have a stake in the company. Take some time to learn about how this affects you.
To read CNBC’s article on the pros and cons of Amazon’s second headquarters coming to your city, click here.
To read Business Insider’s article on the incentives cities are giving Amazon to pick them, click here.
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