The After Effects of Amazon Backing out of NYC Deal

New York

In September of 2017, Amazon announced that it was interested in building a new corporate campus, which would have the same status as its current headquarters in Seattle. This started up a frenzied competition between a wide range of cities, which sought the jobs as well as the investment that would come with a new corporate campus. In the end, Amazon decided that a single city couldn’t provide it with enough tech expertise and experience, which is why it decided to go with one hub situated in Queens in New York City and another hub situated somewhere else.

However, it wasn’t too long before Amazon ran into opposition in New York City. There wasn’t a single cause for this. Instead, there were a number of causes, which explain the wide range of people who made up the opposition. For example, there were some people who expected the plan to have a very negative impact on their living situation. In short, a huge number of well-paid jobs would have meant a huge increase in the number of people willing to pay bigger sums for real estate in the region, thus resulting in very predictable consequences for local housing costs. Likewise, there were other people who were less than enthused about the fact that New York government was planning to give close to $3 billion in incentives to Amazon.

Something that as far as they were concerned, Amazon neither needed nor deserved. On top of this, there were those who were upset that the proposed plan was created without much input from either local politicians or other stakeholders, thus increasing their ire at the whole process. Over time, it is interesting to note that there was a change in the nature of the opposition as well, which moved from criticism of the various components of the proposed plan to criticism of Amazon’s corporate policies. Going into detail would take up too much time, but suffice to say that provided the critics with even more ammunition for their barrages.

In the end, Amazon made what some people saw as a half-hearted attempt to engage with the local stakeholders before eventually decided that it would be abandoning the proposed plan in preference for hiring more people in more cities. Said decision was met with mixed responses among New Yorkers, as shown by those who celebrated the outcome as well as those who blasted the celebrants. No matter who was right or wrong, there can be no doubt about the fact that this was an important decision, which has already had a noticeable impact on Queens in New York City.

What Are the After Effects of Amazon Backing Out of NYC Deal?

For instance, the median price for renting an apartment in northwest Queens had fallen to $2,798 in February of 2019, which was a 1.8 percent decrease compared to the same time in 2018. Furthermore, this was matched by a fall in the number of new leases. These two consequences are completely and utterly unsurprising because there was a huge surge of interest in said real estate market when the initial announcement was made that Amazon would be building a new corporate campus in the region. Now that the situation has changed, it stands to reason that people’s real estate ambitions would change as well. With that said, it is important to note that this isn’t exactly what anyone would call a knock-out blow for the local real estate market because the same factors that pushed local real estate prices so high before the announcement will remain in effect for the foreseeable future. In other words, chances are good that this won’t be a sustained downward trend so much so that a momentary relieving of pressure.

Besides this, it will be interesting to see what happens with the tech sector in New York City. One of the reasons that some N.Y. politicians pushed so hard for the proposed plan was because they wanted to diversify New York City’s economy by making it more attractive for tech companies. Certainly, this is a setback for that plan, but it seems probable that those politicians will continue to push it in the times to come. For that matter, while Amazon won’t be settling in for the long run in Queens, there is a good chance that it will be adding some jobs to the location anyways because of its plan to distribute its new employees over a number of cities rather than concentrate them at a single location.

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