Let this sink in.
While so many of Vancouver’s bricks-and-mortar small businesses are struggling to stay afloat, our mayor is trying to woo a multinational corporation whose business model is based on replacing local bricks-and-mortar shops.
While that’s sinking in, consider this:
The proposed second headquarters for the monopoly seeking online retail behemoth would take up about 8 million square feet and employ about 50,000 high paying jobs.
Vancouver doesn’t have nearly that number of job seeking white collar tech workers, so those 50,000 tech jobs will represent a significant population influx. Set against the failure to meaningfully address urgent local issues like homelessness, housing un-affordability, low vacancy rates, and struggling retail districts; it’s hard to imagine what (if any) plan the mayor has to counter the impact of Amazon HQ2.
The scale of the project, and rumours to locate it on the False Creek Flats, or on land extracted from the Agricultural Land Reserve will be a monumental “game changer” [2] for our city.
But like any game changer, there are winners and losers: given the state of Vancouver, it’s not hard to imagine who the losers will be.
“Amazon’s rise has not been without local critics, who say the influx of mostly well-heeled tech workers has caused housing prices to skyrocket, clogged the streets with traffic and changed the city for the worse…” [1]
While it is laudable for our city and the Vancouver Economic Commission to attempt to lure new business and investment to the region (project has a $5b pricetag and promises significant indirect economic activity), it’s worth taking a closer look at what Amazon represents.
In a 2015 paper, Civic Economics: “Amazon and Empty Storefronts” [3] studied the impacts of Amazon’s online retail on the U.S. market: in that year, Amazon sold $55.6 billion of retail goods nationwide, resulting in a net loss of 222,000 retail jobs, depriving an equivalent of $528 million in otherwise bricks-and-mortar storefront property taxes, and avoiding $704 million in sales tax. Amazon has even patented autonomous drone technology with plans to deliver products directly from its warehouse to your home.
In Seattle, Amazon’s premiere HQ is described as the harbinger of that city’s record growth: “Amazon has been blamed or praised — depending on your perspective — for Seattle’s historic real estate boom.”
Contrast the Amazon model and its impacts with current situation for local bricks and mortar stores: struggling under skyrocketing land values and taxes, unable to retain employees increasingly priced out of living in the city, financially squeezed customers and shrinking disposable income.
Vancouver: we need to get our own house in order before we start inviting new guests.
[2] https://www.biv.com/article/2017/9/could-vancouver-become-amazons-second-home/
[3] http://www.civiceconomics.com/empty-storefronts.html
Postscript:
Since I posted this on Facebook, there was considerable interest and some comment suggesting I was against well paying jobs. Let me be perfectly clear, I support the creation and attraction of good well paying jobs. The mayor’s office has also since done a 180˚ suggesting the bid for Amazon would now be a regional one, not the City of Vancouver going it alone. While the greater metro region is a far more reasonable consideration to support a 100 acre site and 50,000 high paid employees, there is still a great deal of scrutiny and long range planning to consider in a project of this scale, including what kind of deals and concessions we may be offering to lure the Amazon HQ2.
An interesting article on that last consideration can be found here https://www.brookings.edu/blog/the-avenue/2017/09/08/amazons-red-herring/ and here https://www.nytimes.com/2017/09/07/technology/amazon-headquarters-north-america.html?mcubz=1&_r=0.
Given the mayor’s track record so far on dealing with housing, homelessness and protecting small local businesses, and history of backroom deals and developer campaign donations — I remain cynical about how this particular project would be handled.