As real estate prices in Seattle have grown to California levels, Amazon famously looked all over the country for where to place a “second” headquarters. Lots of observers naively assumed it would go for a nice place with a some room to grow, such as the Denver area.
Amazon ended up slicing the baby in half and awarding one HQ to Long Island City, NY and another to Crystal City, VA. The latter is right next to Washington DC’s in-close Ronald Reagan airport, and the former isn’t a suburb like it sounds, it’s a waterfront neighborhood in Queens across the East River from Times Square — i.e., perhaps the most in-town place you can be in NYC without being on Manhattan.
Some of these decisions no doubt are related to how much shakedown local officials were willing to pay. But an interesting point was made by Spotted Toad [link fixed].
A couple of years ago he pointed out how smart capitalists, and Jeff Bezos didn’t get to be the Richest Man in the World by not being smart, like Unaffordable Family Formation. It helps them squeeze more work out of workers:
The firms like being in places too expensive to raise a family– families are distractions, at least in the short-run. And once the smart set is composed of people living with roommates in their late 20s and early 30s, in the kind of neighborhoods that Arab princes and Chinese tycoons use as credit mobility vehicles, in a metropolitan mating market that facilitates everything but commitment, one can’t help but feel that the concentration of economic activity in spots of white-hot unaffordability will intensify, rather than relax.