Amazon’s HQ2 Pressure on Black Homeowners
By CultureBanx Team
Amazon may benefit from having its HQ2 in a designated “Opportunity Zone”
Black people have the 2nd lowest homeownership rate in Queens
Retail giant Amazon (AMZN -1.61%) has selected an upscale slice of the waterfront area in New York’s Long Island City to house one of its two new secondary headquarters, with the other location in Arlington County’s Crystal City. This is one of the largest economic development projects in recent history. Amazon may cause home prices to skyrocket in Queens where Long Island city is, and where black people have the second lowest homeownership rate, like they did in Seattle.
Why This Matters: Long Island city has a 10% black population and there are more than 20,000 less black homeowners in 2017 than there were in 2005, according to the 2017 Housing and Vacancy Survey for New York City. For the city’s part it gave Amazon up to $1.7 billion in state economic incentives to help secure the Queen’s location, an area where black homeownership is already on the decline.
There are several reasons leading to these low numbers including the fact that black home buyers have faced soaring prices and a tight lending environment. In 2017, this resulted in only 881 home purchase loan originations to black households in Queens, compared with 1,742 in 2007, the survey found.
Long Island City’s HQ2 will definitely attract developers to help create more homes and perhaps spur further gentrification in the area. This is primarily because many areas of Long Island City have been designated as federal “Opportunity Zones.” Originally described as a benefit for distressed communities, it’s really just the latest push for billionaires and companies to not pay taxes at the expense of urban communities.
Amazon itself may easily benefit from having its HQ2 in a designated Opportunity Zone. The New York Times reported the company could start an opportunity fund to buy real estate in the zones surrounding the office.
Situational Awareness: Property taxes are adjusted periodically based on the assessed value of a home, which will probably increase once Amazon rolls into town. It’s unlikely for higher property taxes alone to force a homeowner out of their home, they may not be able to handle the increase in other costs of living items like food or gas in the area.
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