By Madison Henry
Many people are happy that Toronto made the shortlist to be the location for Amazon’s second headquarters. On first glance it seems great: Amazon says there would be 50,000 jobs added to the city, giving Canadians, and maybe some lucky Ryerson students the chance to work at their dream tech company.
There is no downside…right? Maybe not. With Toronto housing prices quickly rising, a new Amazon headquarters might boost the prices higher than ever before.
In a Jan. 25 Financial Post article, Ryerson associate professor Murtaza Haider, and Stephen Moranis, a Toronto real estate agent, wrote about the impact the headquarters could have on housing prices.
“These highly paid workers routinely outbid locals and other workers in housing and other markets. No longer can one ask for a conditional sale offer that is subject to financing because a 20-something whiz kid will readily pay cash to push other bidders aside,” Haider and Moranis wrote in the article.
They also said that high wages at Amazon are good for workers, but bad for the average Torontonian. On average, Amazon employees in the United States earn an average income of US$100,000, which is about C$125, 316. This in turn will increase housing prices drastically in the GTA.
Housing affordability and tech companies are two things that almost always go together. Many cities where tech companies are known to thrive are having a serious problem with housing affordability. In Menlo Park, Calif., where Facebook has its headquarters, the average rent for a one-bedroom apartment is C$2,887.07 and in San Francisco is C$4,176.08. The average price of a one-bedroom apartment in Toronto is C$1,800. Recent protests in San Francisco, involving the blocking of Google buses and demonstrations in front of Airbnb rentals are also a sign of communities within the city connecting the dots and pointing a finger at tech.
If people who have full-time jobs are struggling to find an affordable place to live in the city, students (who often do not work full-time) are going to have an even bigger problem. Hungry for Knowledge, the largest cross-campus study on student food insecurity in Canada, found that 49.5 per cent of students surveyed said they had to sacrifice buying healthy food to pay for expenses such as rent, tuition and textbooks.
In addition to rising housing costs, Haider and Moranis noted that Toronto’s public transportation infrastructure is already at a crisis point. On Jan. 30, the TTC subway crowding reached a new level when a series of problems caused major delays on Line 1. Many Torontonians have called for a relief line but funding is not in place to start the work yet. If more people are going to be coming to Toronto and living in the downtown core, the city has some major renovations to do.
Haider and Moranis said in the article, “Toronto may still pursue Amazon HQ2, but it should do so with the full knowledge of its strengths and vulnerabilities.” At the very least, it should create contingency plans to address the resulting infrastructure deficit (not just public transit) and housing affordability issues before it throws open its doors for Amazon.
With housing prices skyrocketing with no clear end in sight, maybe we should ask Alexa if Toronto can afford to get the second Amazon headquarters.