Affordable Housing

How Amazon HQ2 Would Worsen the Housing Crisis

By Maggie Weaver

With the announcement that Pittsburgh made the short list for Amazon’s second headquarters (HQ2), some were thrilled; the company has seduced cities with its promise of 50,000 jobs and a five billion dollar investment in the chosen city.

Numerous Pittsburghers approach this news with caution, especially those concerned about the cost of putting a roof over your head.

Affordable housing has been a hot-button issue in Pittsburgh for years. Low-income housing units provide living spaces for the percentage of a city’s population that makes less than the median household income. As Pittsburgh’s average household income increases, housing prices rise, pushing low-income residents out of neighborhoods.

In 2011, Target moved into East Liberty. The store was celebrated–CityLab pointed out the need for a “large anchor business” in East Liberty, an anchor that brought salaried jobs to the area. But Target’s arrival fueled Pittsburgh’s destruction of affordable housing in East Liberty, forcing low-income residentsout.The area now hosts luxury apartments.

The federal government has policies in place to aid citizens who need affordable housing, such as Section 8 vouchers. These vouchers are given to low-income families, the disabled or the elderly to ensure housing safety and accessibility. Each voucher acts as a portion of rent. In the case of residents living in East Liberty, vouchers were given for relocation, but this process can take up to two years.

This narrative is common across Pittsburgh: commercial stores, inaccessible to their low-income neighbors, move in and housing is dismantled to accommodate the wealthier residents. The displaced tenants are being pushed into the suburbs. Look at Lawrenceville, named one of Lonely Planet’s “Hot ‘Hoods in the U.S.” in October 2017. The travel magazine highlights Lawrenceville’s draw for artisans and entrepreneurs who are “using the deeply discounted spaces to try their hand at everything from start-up ateliers to microbreweries.” But a house in Lawrenceville cost three times more in 2013 than what it did in 2000.

Pittsburgh is chasing Amazon, enticing the company with low housing costs and revitalized neighborhoods. If Amazon settles in the Steel City, affordable housing will suffer.

Among Amazon’s short list of cities for HQ2, Pittsburgh has the lowest median price for a house, according to Realtor.com. Amazon is attracted to the low housing costs.

Once Amazon developed their first campus in Downtown Seattle, housing prices began to climb. According to GeekWire, the average rent for a 650 square foot apartment in South Lake Union, where Amazon headquarters is located, saw a $45 raise in rent each year from 2011-2015. Though these numbers were not changed only by Amazon, the company’s development impacted the rise strikingly. Zillow highlights that housing prices in Seattle increased 84.7% over the seven years since Amazon’s construction, taking the average cost for a single family home from $373,800 to $690,200.

A similar trend can be assumed for Pittsburgh. A study by Apartment List predicts that after Amazon’s arrival, annual rents in the city will increase over a ten-year period by 1.2 to 1.6 percent each year, on top of normal rent growth of 3 percent increasing annual rents by $6,970 to $9,533. Currently, the median rent is $837, as reported by Business Insider.

If rents continues to increase, low-income housing will be dismantled. Without wage increases, local Pittsburghers will not be able to afford housing in the city.  These people will be forced into the suburbs, limiting their access to necessities such as public transport and jobs.

Maggie Weaver is an intern at the NewPeople Newspaper.

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