Economist analyzes possibility of Amazon headquarters in Austin

Austin is one of dozens of cities that submitted a bid for Amazon's newest headquarters, but what would that look like?

AUSTIN - It's one of the world's most well-known and successful companies, and it could soon be calling Austin its home.

“There's a lot of buzz about Amazon, and of course we'd love to have Amazon here in Austin,” explained William Mellor, the Vice President and General Manager of Angelou Economics, an Austin-based consulting firm.

Amazon plans to hire 50,000 employees over 15 years, and invest $5 billion into the area with the winning bid. But Mellor said the impact extends far past the deal itself.

“Amazon coming to your community elevates your status to really make you a bigger competitor for other companies. If you're good enough for Amazon, then you're good enough for most companies out there,” explained Mellor.

For an area that is already home to offices and distribution centers for Apple, Dell, IBM, AT&T, and even Amazon, the possibility of a second headquarters would be a big victory for the city.

“Austin has done very well with competing with other major tech hubs like Seattle and Silicon Valley. And to the extent that Amazon comes here, there's going to be a lot of other investment and that's probably just as important as Amazon itself,” Mellor said.

Amazon employs thousands of people already in the Austin area, and recently opened up a distribution center in San Marcos.

Still, there are potential downsides that come along with a deal.

“First and foremost, congestion. We already have a pretty congested city as it is, and we're talking about putting 50,000 more cars on the road,” Mellor explained.

Another existing issue that could get worse is housing affordability.

It's a problem that Seattle, home to Amazon's headquarters, is currently facing.

According to an April 2016 article by Zillow, the median monthly apartment rent jumped 35 percent -- about $500 -- since 2011.

Part of that has been fueled by higher-paying tech jobs coming to the area, led in part by Amazon.

Since opening their headquarters in 2010, Amazon reports they've contributed $38 billion in investments, job creation, infrastructure investments and philanthropy.

“The economic impact is going to be well beyond just the city limits of Austin. It's going to be in all of the surrounding communities and counties,” said Mellor.

Moody's Analytics ranked Austin as Amazon's number one choice, saying our city is a tech hub and the labor force is well-educated.

Much like Apple's relationship with Austin Community College, Mellor adds that Amazon works with local schools in Seattle, an initiative that can help students here.

While the city’s Chamber of Commerce did not reveal specifics of the bid, Mellor said based on the past history of City Council and Mayor Adler’s administration, he did not believe large incentives were likely to be included.

As for potential salary ranges, Mellor noted headquarters traditionally have higher-than-normal salaries across the board. 

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