Apple Computer Inc. announced its plan to build a new billion-dollar facility in Austin, TX, which will practically triple the number of its employees in the city. When that is achieved, Apple will be Austin’s largest private employer. (The rewards and incentives promised to Apple are explained here by business reporter Daniel Salazar.)
Without unions or corporate income tax, Texas is attractive to corporations. The state sends 36 members to the House of Representatives in Washington, so it’s a great place to wheel and deal, and wield influence on national policy.
The new employees will make a lot less than their Apple counterparts in the Bay Area or New York, but still more than the people currently experiencing homelessness in Austin. Incidentally, journalist Jeremy Bogaisky mentions that,
Apple also said it planned to establish new offices in Seattle, San Diego and Culver City, California, that would house 1,000 workers each.
Wait, what? That language is shady. Offices do not house workers. Housing houses workers, and Austin already doesn’t have enough housing. The influx of well-paid tech people can’t help but displace even more of the poor who are holding on by their fingernails.
Austin’s pool of technical talent is still relatively small, a site-selection consultant told the press, but Apple is “confident that the economic factors and hipness quotient […] will help the company bring in talent from elsewhere.”
But why?
A metropolis like San Francisco or Seattle — or Austin — is bossy. Zoning ordinances are carved in stone, and new construction of affordable, multi-family units is regarded with horror more appropriate to the bubonic plague. The laborers needed for new construction can’t even afford to live locally. This brings to mind a favorite idea of House the Homeless co-founder Richard R. Troxell, who advocates for the revival of workers’ hotels, like the old YMCA. Richard says,
You pay your $10. Stash your gear in your private SRO unit, get a good night’s sleep, wake in the morning, go down the hall to the community shower, then grab your tool bag and your hard hat and head out to work at a living wage job. You have just saved taxpayer a third of the dollars they are willing to spend on “the Homeless.”
Exclusionary municipal zealots have a lot of tricks up their sleeves, like procuring historical landmark status for an old gas station, to block construction of an apartment building. If somebody else got there first, nothing can be built tall enough to block their view. There won’t be enough room for cars to park, they whine. The “character” of the neighborhood will be marred.
Is bigger really better?
Rather than ride the coattails of an already thriving city, shouldn’t a corporation help a struggling city to become great? Ordinary people, communicating via social media, express the same sentiments. Why not pick a place with a depressed economy, like Detroit or Cleveland? Many cities, despite falling on hard times, still have amenities like museums, airports, and sports teams.
Build a huge facility in a second-tier city, and hipness will show up. Comedy clubs and fancy underwear boutiques will open branches. Touring bands will add the place to their itineraries. The things that make a city attractive will arrive, to serve the new population of well-paid professionals. Denominations will line up to plant new churches. Bicycle trails will be constructed. Coffeehouses will show up, and patisseries, and a shop that sells nothing but olive oil.
Somebody will get the bright idea to build housing — maybe even the kind that’s affordable to the firefighters and teachers who make the city worth living in, as well as for the working-class support staff who keep the techxperts comfortable.
Journalist Matthew Yglesias spoke with two housing economists:
[Janna] Matlack and [Jacob] Vigdor find that in housing markets that are “slack” — where there is either plenty of existing housing or it is easy to build new homes so that sale prices approximately equal construction costs — there are spillover benefits. In a slack market, the new rich people don’t impact rents very much but their presence creates new working-class job opportunities.
Not everyone wants to live in a megalopolis. Half the people in Los Angeles hate living there, but it’s where the entertainment industry is. Not all tech workers want to exist in science-fictional environments. Plenty of people don’t want a two-hour commute, no matter how much opportunity it presents to enjoy audio books. Lots of people, even some with the highest of high-tech careers, actually want to steer their lives onto a more organic path.
Density is better than sprawl, for a number of legitimate reasons. Wouldn’t it be fun to purposely shape a city by building infill homes — yes, even multi-family units, and plenty of them — instead of suburbs? It has been said that Austin will attract tech workers because of the “cool factor.” Why not go somewhere smaller and more boring, and create the cool?
Reactions?
Source: “For Apple, The Price Is Right In Austin For A Big New Campus,” Forbes.com, 12/13/18
Source: “Big Tech Isn’t the Problem with Homelessness. It’s All of Us,” Wired.com, 06/21/18
Source: “The tragedy of Amazon’s HQ2 selections, explained,” Vox.com, 11/09/18
Photo credit: Bex Walton on Visualhunt/CC BY
