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Of Course Amazon HQ2 Will Increase Homelessness – Any Form Of Economic Growth Does

A particularly fine whine about Amazon’s new HQ2 in Crystal City and Queens, NYC – it’s going to increase homelessness in both places. Which is obvious. Obvious given the method they’re using to calculate how homelessness is caused that is, for by their definition absolutely any form of economic growth would. Someone opening a car factory, a diversity adviser training facility, these too would increase homelessness. For bringing more jobs to a place increases wages, that’s just what happens.

So while this may well be – actually, is – true we shouldn’t be paying much attention to it :

Amazon HQ2 could push 800 people into homelessness, economist says

Well, why?

Amazon’s new headquarters are expected to lead to 0.1-0.2% in additional annual rent growth in the D.C. metro area and a less than a 0.1% increase in rent growth in New York City, according to an analysis from rental firm ApartmentList. That works out renter households paying an additional $1,391 – $2,182 over 10 years in New York City and $3,750 – $5,757 over 10 years in Washington, D.C., a January analysis by ApartmentList found. Homelessness increases at a rate of 15% for every $100 per month median rent goes up, a 2014 study published by the Journal of Urban Affairs found.

Due to rising rent costs in the two HQ2 cities, Amazon’s new headquarters could contribute to 14 additional people in homelessness annually in D.C. and 830 additional people in New York, Aaron Terrazas, senior economist at real estate data site Zillow ZG, +2.88% calculated, though Zillow noted that these numbers are subject to change.

That’s therefore true but tosh. Tosh because that’s to assume that the supply of housing is fixed, which quite obviously it isn’t. Well, it’s not fixed as long as zoning doesn’t mean that nothing new can be built anywhere near anyone. That’s an affliction which affects many of the coastal, liberal even, cities but it’s that affliction which causes the problem.

It’s also tosh because absolutely any form of economic growth will produce the same result. Given the way the calculation is done any rise in incomes – don’t forget, income equals production equals consumption on the large scale – leads to exactly this result. So, we should never have any economic growth anywhere because it will cause a rise in homelessness? That’s to be ludicrous. And, of course, economic growth does only produce this result if zoning means nothing new can be built. The problem is with the zoning, not the growth.

Then there’s this:

Amazon’s HQ2 means up to 25,000 new workers could end up in New York City. It also means there will be nearly 5,000 fewer homes for the city’s residents.

The argument is that the land which it is to be built upon could instead – would instead – have been used to build affordable housing.

Amazon’s plans to expand into Long Island City may cost Mayor Bill de Blasio — and New York City — approximately 1,500 units of affordable housing.

Two sites that will house the future offices of the e-commerce giant were originally intended for residential development, before Amazon chose them in a nationwide contest for its new headquarters.

OK. So, presumably the Amazon HQ will bid more for the piece of land than the affordable housing. Otherwise, in a rational world at least, Amazon wouldn’t get the land. This means that by having the HQ there we’re moving an asset, that land, from a lower to a higher valued use. That’s called wealth creation, economic growth even. And again do note that this is only excluding such housing if zoning means that no other site can be used. Really, there is no shortage of land around, it’s land you’re allowed to build upon which is in short supply.

Basically this is a complaint that there’s going to be economic activity going on. And if we’ve got to the point where banning that in the name of affordable housing is how the system will work then boy oh boy do we have some big problems coming. Like, you know, a certain paucity of economic activity?

There’s also a simple answer to all this. Abolish zoning.

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5 years ago

Economic growth does not cause homelsessness.
We were all homeless before civilisation existed.
Greed creates homelessness.

5 years ago

Franklin_Delano_Roosevelt but

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