Quote:
Originally Posted by Atlanta3000
I personally think it is highly unlikely they will select Boston. Although Boston has a lot to offer, there are 3 undeniable areas that are a negative: - Boston is not a city that embraces growth. If they were to select Boston, Amazon would quickly find themselves butting heads with the anti-growth citizens they are confronting in Seattle.
- Cost - from CoL, Real Estate to Wages. Every aspect on the corporate side and employee side would be considerably more expense if Boston HQ2. Given Amazon is planning to hire 50K employees you cannot under estimate the power CoL will have on Amazon's ability to attract talent. Amazon has to be taking this into consideration. CoL is the primary reason you see Silicon Valley companies move jobs from their West Coast operations into lower cost cities.
- Incentives.
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I similarly wrote off Boston early on, but I'm slowly realizing it's a real possibility.
1. Amazon has also shown an ability to thrive in a very restrictive urban environment. While I'm sure that, at the margin, they'd like to be located in a more pro-growth area with available land, it's not necessarily a major issue. It definitely seems to me an overreaction to conclude they're looking for a strong opposite - that's just a risky 🞵🞵🞵🞵🞵🞵 if Amazon isn't entirely sure why they've been so successful (maybe there's something in Seattle water, after all).
2. Not all types of COL are the same. All else equal, Amazon would probably be more willing to deal with high COL in Boston than in Seattle.
Both Seattle and Boston are severely land constrained and have restrictive zoning. But Seattle's high cost of living reflects both high productivity and highly desirable amenities (weather, mountains, etc.). Boston's high COL is mainly a reflection of its productivity advantages. The latter is reflective of a benefit that Amazon actually internalizes, and so is willing to pay more; in the Seattle case, Amazon suffers a bit because Amazon (and its employees) are also competing for land with people who just want to live in Seattle for the amenities and are not particularly productive - that drives up costs past the point that reflect local worker productivity.