In early September, Amazon took North American cities by surprise, announcing that they are looking to open a second headquarters. With the announcement, Jeff Bezos’ company set out the parameters as to what it will take to secure the contract to house Amazon’s HQ2. Tax incentives, reasonable real estate costs, ability to attract and retain high-quality tech talent, and proximity to a major airport are all key factors that will determine which major city will be welcoming HQ2. According to Re/Code, there are 22 cities in the continental United States that meet or exceed the criteria as well as at least two cities in Canada.

But, why are all these cities bending over backward in an attempt to woo the multi-billion dollar eCommerce giant? Continue reading to find out why.

50,000 Jobs over 15 Years

With Amazon’s announcement, it was made perfectly clear that HQ2 would be equal to the Seattle headquarters. That means that wherever Amazon’s second headquarters ends up, they can expect a large workforce in excess of 40,000, which is how many Amazon’s Seattle Campus currently employs.

In fact, according to a Geek Wire article in early February 2017, the leading eCommerce company added over 110,000 employees between January 2016 and December 2016. That is second only to Microsoft—which added 120,000 people to its workforce between January 2016 and December 2016.

Billions of Dollars in Up-front and Ongoing Investments

Between 2010 and 2016 Amazon lined the city of Seattle’s government coffers to the tune of $38 Billion dollars and, according to Amazon’s press release, “[We estimate that] every dollar invested by Amazon in Seattle generated an additional $1.40 for the city’s economy overall.”

Although that will obviously have a positive effect on almost any economy, the investment doesn’t come free. According to Amazon’s request for proposals, “A stable and business-friendly environment and tax structure will be a high-priority consideration for the Project. Incentives offered…[are] to offset the initial capital outlay and ongoing operational costs”. The request for proposals goes on to list the types of incentives they would expect to see—tax credits, relocation grants, workforce grants, and utility grants are just a few on that list.

Could Amazon and Austin be a Match?

Yes, and here is why.

Although Austin falls just shy of having a population of one million people that Amazon sets out as a part of its criteria—Austin’s population is 947,890—Austin meets or exceeds every other standard set out by Amazon’s request for proposal. Criteria like:

  • Capacity to produce skilled, technical talent. The retaining and attracting of talent seemed to have been a fundamental must-have to Amazon in their RFP and Austin, which has recently attracted the likes of Google, clearly is a strong contender in the category.
  • Access to global and domestic markets through infrastructure. With the recent announcement of the possibility of hosting Elon Musk's Hyperloop, Austin’s infrastructure is certainly on the up and up. Austin is also home to Bezos' other huge company, Whole Foods. On top of this, Bezos also has a home in Texas and many other business ventures dotted throughout the State.
  • Culture and diversity. As of 2005, Austin officially had no ethnic minority. Two of the fastest growing demographics in Austin are those of Latino and Asian descent, which means that out of the other top cities that meet or exceed the criteria, Austin would be one of the most inclusive and demographically diverse cities.
  • There’s also one other boon that Austin has going for it—proximity to major military bases. We know that might sound a little weird, but Amazon is one of the top military employers for both veterans and military spouses. Being situated in Austin would aid Amazon in meeting its target to hire 25,000 veterans and military spouses by 2021 and to give an additional 10,000 more training in cloud computing through their AWS Educate program.

What Does This Mean for Austinites?

None of us truly know how big of an impact Amazon could have on the Austin market. However, most could have an educated guess that this would be a life-changing event that will likely add fuel to the already scorching hot real estate market in Austin.

Not only could the influx of employees cause the supply of homes for sale on the Austin real estate market to dwindle, the rental market could also see an increase in demand. So, if you’re a property developer, landlord, or a first-time home buyer, now might just be the time that you should look into purchasing a home in Austin.

Posted by Mary Ann Castro on


Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.