Although Amazon is reported to have completed visits to the 20 cities vying to host the company’s second headquarters, Mayor Eric Garcetti said Wednesday he has not received any recent updates from the company but is still pursuing the bid despite the firm’s recent clash with Seattle over a tax aimed at helping the homeless.
In January, the Los Angeles region was named one of 20 finalists out of 238 proposals Amazon received to become home to its planned second headquarters. The local bid included three sites within the city and a total of nine around Los Angeles County. NBC News reported that the company has completed all of its visits to the finalist cities, citing unnamed sources close to the process.
The Seattle City Council this week approved a tax of $275 per employee per year on companies grossing at least $20 million per year. Some city leaders said Amazon and other large corporations like Starbucks were contributing to a rise in the cost of housing, which in turn was driving up homelessness. The tax would go toward homeless programs and affordable housing, although Seattle Mayor Jenny Durkan has threatened to veto the tax.
Amazon fought the tax, and Amazon Vice President Drew Herdener said in a statement after the vote that “we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”
But Garcetti said Los Angeles is “not looking to punish anybody” over the city’s problem with homelessness. Los Angeles voters in 2016 approved Measure HHH, a $1.2 billion bond measure backed by property taxes to combat homelessness and provide them with housing.
Garcetti said he remains confident that a large company such as Amazon could move to the city and not have a detrimental effect on housing costs.
“This is a big enough economy that we’ll add 50,000 jobs and Amazon will have, for us, a very positive impact,” he said.
Garcetti’s confidence in the impact Amazon could have on Los Angeles comes despite the city experiencing a significant rise in homelessness, with the numbers jumping by 20 percent last year to more than 34,000 people.
But a recent report from the real estate company CoStar appears to back Garcetti’s assessment, finding that Amazon’s arrival would have a limited impact on housing costs in large real estate markets like New York or Los Angeles. Amazon could help drive rental prices up 2.3 percent within 10 years in Los Angeles, but that was low compared to the estimated 11.9 percent rise that a smaller city like Raleigh, North Carolina, would experience, the study found.
“In a large market like New York, Amazon’s arrival could transform a submarket or neighborhood in the way that Google transformed Chelsea, but the overall market is just too large for a single occupier to move the needle,” said John Affleck, director of analytics at CoStar Group. “Many Amazon employees will likely buy a home rather than rent, lessening the stress an Amazon arrival would put on the rental market. Get ready for higher home prices, though.”
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