By Jon Kamp
BOSTON -- The possible arrival of Amazon's second headquarters
here is triggering both hopes and apprehension in a neighborhood
already dealing with fallout from surging costs in a growing
city.
The city has pitched East Boston, an immigrant-filled area of
about 46,000 people, as a prime locale for Amazon.com Inc.'s next
home. While developers say gentrification came slowly there, it is
now in full swing, aided by a subway line under Boston Harbor
offering quick commutes downtown.
Rising rents and displacement are already apparent in what
locals call Eastie, and some people worry the company moving in
would further pressure vulnerable residents.
"I think we should be concerned," said Sal LaMattina, a retired
city councilor and lifetime East Boston resident, who has long
advocated for neighborhood development.
Boston isn't alone: Most cities on Amazon's shortlist of 20
finalists are grappling with the effects of gentrification and
rising costs, said Jenny Schuetz, a Brookings Institution fellow
who focuses on housing markets and real estate. Recent analysis
from Brookings and real-estate firm Zillow indicate the massive
Amazon project -- up to 50,000 workers and 8 million square feet of
office space -- could strain housing markets.
"I think a lot of places on Amazon's shortlist, it's likely to
drive up real-estate values and put pressures on specific
neighborhoods," Ms. Schuetz said.
Concerns are even bubbling up in places like Pittsburgh, a
modestly priced city compared with other Amazon contenders. Some
neighborhood advocates there worry the development will trigger
real estate speculation that boosts costs and threatens
lower-income residents in areas already pressured by an influx of
technology jobs.
Zillow last month projected that landing the Amazon project in
Pittsburgh would cause annual rents, which are otherwise forecast
to drop, to increase by 0.9 percentage point. The Nashville area
was forecast to see the biggest impact of the finalists -- an added
2.4-percentage-point increase, Zillow said.
Still, many officials and residents in the 20 cities on Amazon's
list are excited about the prospect of landing Amazon. "That would
create a lot of employment opportunities," said Debra Cave, who
leads a local civic group in East Boston.
Competing cities widely view the Amazon headquarters as a huge
economic-development draw that could have ripple effects across
their economies, generating yet-more jobs as other tech and service
firms cluster around. Amazon has estimated its investments in
Seattle from 2010 through 2016 pumped an added $38 billion into
that city's economy.
In Boston, Amazon would mark another success for a growing
economy tethered to the city's concentration of top universities
and hospitals. Unrelated to the headquarters plan, Amazon recently
announced plans to add 2,000 tech jobs in Boston's booming Seaport
district.
Boston, a compact city of roughly 673,000 people, grew about
8.5% between 2010 and 2016, according to census estimates,
triggering a push by Mayor Martin Walsh's administration to add
housing, preserve affordable homes and aid at-risk renters. In his
second inaugural address in January, the mayor said, "too many
families are still being priced out of too many neighborhoods."
But holding the line on prices has proven hard. According to
Zillow, Boston's median rent has surged about 47% to more than
$2,600 a month since late 2010, the firm's earliest records. Median
home values in the city have also soared.
Rising costs have made East Boston a neighborhood of sharp
contrasts.
Large residential projects are rising along the shoreline, and
developers are remaking a street grid jammed cheek-to-jowl with old
apartment buildings. Three-story buildings with gut-renovated
condos selling for around $500,000 stand near modest, low-rent
apartments. Meantime, a developer plans to replace the faded
Suffolk Downs thoroughbred track straddling the line between East
Boston and neighboring Revere, Mass., with a huge mixed-use
project. It would include city-mandated affordable housing units
and, possibly, Amazon.
East Boston has become the city's epicenter for housing
displacement, according to housing advocates. City Life/Vida
Urbana, a nonprofit, said it supported 71 households threatened
with displacement there last year.
One of those residents was Elva Vanegas, a 55-year-old
Salvadoran immigrant who until recently paid $800 a month in her
longtime apartment. Developer Ricky Beliveau bought her building
last year and quickly sent a notice to residents asking them to
leave by the end of the following month. He has turned two similar
buildings on the same block into high-end condos.
The residents banded together with help from legal-aid attorneys
and filed counterclaims, leading to a settlement and three-year
leases. Ms. Vanegas will pay $900 starting in June, with increases
in the next two years.
The settlement is a reprieve, but she views the possible Amazon
deal as a long-term threat to the neighborhood. "More reason to
kick us out," she said.
Mr. Beliveau said he tries to help tenants find new homes when
he purchases buildings, including in this case, and that he doesn't
view staying in run-down apartments as a long-term, affordable
housing solution. "I understand the hardship they're going
through," he said.
In Seattle, where Zillow says Amazon's presence has also
contributed to rising housing costs, the city and company have
clashed over a new tax on businesses to raise money for homeless
services.
Boston Economic Development Chief John Barros said Amazon is
aligned with the city's affordable-housing goals. "They understand
growth creates tension and pressures," he said. "They're saying
they want to be part of the solution."
He said the long pace of Amazon's planned development may
mitigate the impact on housing costs. He also said Mayor Walsh has
made clear Boston isn't going to "outbid other cities" to chase the
second headquarters.
Lydia Edwards, East Boston's current city councilor, believes
Boston needs stronger pro-tenant policies and to ask for more
affordable-housing units when approving large developments. She
also wants to make sure the city remains cautious while chasing an
economic-development prize.
"We're not desperate for Amazon," she said. "This is the time to
be discerning for our future."
--Keiko Morris contributed to this article.
Write to Jon Kamp at jon.kamp@wsj.com
(END) Dow Jones Newswires
May 21, 2018 05:44 ET (09:44 GMT)
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