I live 1.5 miles from the Crystal City HQ2 site in Alexandria, VA. Are there affordable housing, transportation, and public safety issues we have to address? Of course. Will we benefit from addressing these problems to add 25,000-35,000 jobs? Far more than the cost/difficulty of solving these problems.
We are thrilled to have them. We would much rather contend with growth problems than a loss of tax revenues, reduced property values, list employment, or low quality jobs. We have subsidize part of their expansion, but the growth will pay back that investment in 5-7 years. We can live that ROI.
> Are there affordable housing, transportation, and public safety issues we have to address? Of course. Will we benefit from addressing these problems to add 25,000-35,000 jobs?
As an Arlingtoninian, I remain skeptical that a response of the appropriate magnitude will occur in the region. Those who aren't fortunate enough to have a well-paying job will be forced further outside of the beltway, further worsening their commutes. Affordable apartment buildings will continue to be overhauled and become "luxury", demanding an extra $300+ in rent a month. Well-maintained medium small businesses that were barely breaking even will be forced to shutter as banks and upscale gyms take their spots. This has happened in the region, and will only accelerate with HQ2.
> loss of tax revenues, reduced property values, list employment, or low quality jobs
AFAIK, Arlington was turning around their office vacancy rate before HQ2. Admittedly, it was more focused on the Rosslyn-Ballston corridor, but still...
Increased property values are not really a benefit. That is more concisely restated as increased cost of living and higher costs of doing business. Retail costs rise in turn. Traffic gets worse. You feel like you’re making progress on paper, but it all just becomes a lot less livable.
HQ2 is a great case study on why we ought to have the Land Value Tax. Under this regime, wherever Amazon chooses to put their HQ would have all the same market mechanics occur (prices would still rise with the market) but the increase in prices would be seized as tax revenues and not as a windfall for landlords who had nothing to do with why Amazon chose to put HQ2 there. The region could then use this to e.g. build public housing, improve infrastructure, create functional transit hubs to allow people to disperse a bit while still remaining part of the community, etc.
They're not necessarily evil, they're just profiting from something they had no role in creating. The LVT taxes specifically the value of the land as if nothing were on it - therefore it's value that is extrinsically generated by things like educational institutions, public infrastructure, geographic desirability, or... access to high value employers like Amazon(!).
It's worth noting that under this regime, any actions the landlord does take to increase the value of their particular use of the land is theirs to keep. Build a better apartment building that can demand higher rent? All upside is yours. Build a better storefront that entices higher end tenants? All the upside is yours once again. Seems like capitalist justice to me: you're entitled to what you've produced (value of things on the land) and the community is entitled to what it has produced (value of the land itself).
I don’t understand how this is supposed to work. Land value goes from 1 dollar to 2 dollars because Amazon moves in. Cool, tax revenue goes up 100%, too. This seems no different than a general real estate tax, though. Additionally it seems like this says nothing about whether the rent will go up 100% or 500%.
This feels extremely hand-wavy and borderline wishful thinking. Land value isn’t fully separable from improvements. (My land and improvements are both more valuable when my neighbors improve their properties. My neighbors benefit the same from me. I fail to see why we should be double taxed for the value we create.) Even is separable, it’s not at all clear that landlord profit could be separated this way, because landlords don’t rent out land.
Tax on land value only, excluding improvements. This encourages landowners to build to the limit of marginal construction costs, which benefits both the local economy and tenants.
More housing is not going to happens if everyone is making shit wages. If it were profitable to build housing there, someone would have already done that.
Your comment would read better if you didn't claim to speak for some group - presumably anyone living within a few miles of the HQ2 site. I'm sure that many people could be found there that strongly disagree with your confident predictions:
> We have subsidize part of their expansion, but the growth will pay back that investment in 5-7 years.
Most of the incentives are tied to specific goals; the bulk of the money is tied to specific numbers of jobs being added above a certain pay level (I think it was 25k jobs with an average salary over $100k/year, but haven’t gone back to find the article). Other incentives are contingent on revenues from a specific tax (hotel rooms I think) going up. The other big incentive isn’t Amazon exclusive: building a new campus for Virginia Tech nearby and increased funding for STEM education within the state.
A similar story played out here in Seattle. Amazon transformed SLU into a business hub, bringing tens of thousands of high paying jobs to a previously underdeveloped neighborhood.
This only benefits the people who already own property in the region. As a renter, things are much worse for me post-HQ2 announcement. My wife and I have to accept that, though we love Arlington, we will almost certainly never be able to afford a home here and that we'll be priced out eventually. And we're well-paid professionals; anyone of more modest means is screwed.
I'm sympathetic to this view ... but on the other hand, every major metro area basically just set a floor for how much they're will to give out in tax breaks and perks to rich tech companies to bring in fancy real estate deals. There's something deeper going on here, where tech is investing money they seemingly don't know what to do with in land.
My understanding is that the Washington D.C. metropolitan area, which includes Alexandria/Arlington is one area in the country that is all but recession proof due to the high number of federal government and associated jobs. Thus loss of tax revenues and reduced property values just aren't a thing in this region.
Perhaps if you look at the whole region but this specific area, Crystal City, was devastated by the BRAC[0] program which moved a bunch of government agencies, offices, and their associated contractors out of this area.
IMO if there’s any place on the east coast that can handle this (other than maybe NY but then again maybe not) it’s you guys. Every time I’m up there the metro lines and VRE get longer and there are one or two more high-rise apartment buildings. The price for a starter apartment is about the same as it is in most small American cities because of that.
Could it be better? Yes but I don’t think it’s better anywhere else.
A fellow I know lives in Washington, DC, a block and a half from the Columbia Heights metro. He expects to be charged more rent as the first result of the Crystal City HQ2. I imagine that Washington will gain some income tax revenue.
