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The Undignified Auction

Paul Roberts thinks that cities should think twice before pitching Amazon for HQ2:

[C]ities hoping for their own transformational event should keep several caveats in mind. Most obviously, Amazon isn’t the only reason Seattle has been attracting all the firms, talent and capital. The area’s “other” tech icon, Microsoft, headquartered since 1986 in nearby Redmond, is still spinning out its own considerable agglomerative powers. It boasts the world’s second-largest cloud operation, a huge workforce and a famously productive web of spinoffs and startups, many of which now exert their own Seattle gravitational pull. The Seattle-based travel company Expedia, to take one example, is a Microsoft spinoff, whose creator (and eventual CEO), Richard Barton, went on to launch Seattle-based real estate website Zillow. Microsoft co-founder Paul Allen, a prodigious startup launcher in his own right, also developed the vast business park downtown that became Amazon’s campus. Other gravitational centers abound. AT&T Cellular and Nintendo are here. The very tech-focused University of Washington has launched scores of ventures and technology transfers. And for all the talk of the “new” economy, one of Seattle’s biggest tech firms is also one of its oldest—aerospace giant Boeing, which has been attracting engineers and computer scientists, and launching spinoffs, for decades. […]

Seattle has indeed tilted decidedly and often absurdly to the left in recent years. (Socialist Seattle City Council member Kshama Sawant once proposed nationalizing Boeing.) But even a more conservative Seattle couldn’t have come close to absorbing the 40,000 additional workers Amazon is going to hire for HQ2. More fundamentally—and more relevant for would-be host cities—these “anti-business” complaints ignore the way Amazon and other tech firms themselves have helped foster Seattle’s disloyalty. Even residents here who are thankful for Amazon’s presence recognize how the company’s rapid growth has added to affordability and inequality problems—and as a result have been more willing to support worker-friendly policies, such as the $15 minimum wage.

Roberts sets up what is almost a lose-lose situation here. Either a city is “already there” like Seattle is, in which case such an influx of people is going to cause headaches. Or it isn’t, and it can’t expect to succeed as Seattle does (and, mentioned elsewhere, probably won’t get it anyway).

He may well be right. Either way, the tax breaks and tax incentives are a real collective action problem. One of the problems with a federalist system with a fair amount of local control is the ability of places like Amazon to play one city off another. They’re going to bring in jobs and tax revenue by cutting into the money it’s supposed to bring in. But as long as that money is more than zero, it’s a win for whichever city wins the sweepstakes.

It’s an ugly process, and there is no solution to it that isn’t very centralized (and that is constitutional).

What Roberts gets especially right, though, is that the cost/benefit ratio is going to be very different from city to city. Maybe it’s not a case where everybody loses, but his arguments for why Seattle hasn’t won aren’t entirely wrong. It’s easy to mock their complaints, but it makes more sense when you realize Seattle didn’t need this the way other cities might.

Further, due to geographic constraints, Seattle couldn’t properly reap all the benefits. One of the benefits would be growth and Seattle has real difficulty with growth. Like, there’s not enough room to build. There aren’t enough places to put roads. They feel the pain more than other cities might.

He is right that Seattle can’t absorb another 40,000 workers. Houston, on the other hand, has absorbed 30,000 people on average every year since 2010, and has averaged near or over 30,000 per year for five of the last seven decades. And that’s the City of Houston, whereas Harris County is double that.

It’s a lot easier when you’re not surrounded by mountains and water.

So one of the things a city or county or state might consider is precisely how much room it has for expansion. That’s part of why I look askance at candidates like Boston, DC, or Chicago. They don’t need it and their presence there is more likely than not going to chase out or price out other opportunities.

So where, then? How about Birmingham? Kyle Whitmire makes his populist case for the big city of the Yellowhammer state, or at least somewhere similar:

What should be clear to everybody by now is the only sector of our economy that seems to be growing at all is that thing we’ve decided to call the knowledge economy.

I don’t need to explain to you what the knowledge economy is, because you’re right in the middle of it.

The knowledge economy is strong in Seattle and San Francisco and New York and maybe a half dozen to a dozen other cities in this country where it’s now too expensive for anybody to move.

And in between? It’s a damn desert. And by desert, I mean the place where most of the people in this country live.

That’s creating problems. The disparity of opportunity and hope is ripe for exploitation. Just look at the current occupant at the White House. That chucklehead had the temerity to go into Appalachia and tell the people there he’d bring coal jobs back. Then he went to the Rust Belt and told the people there he’d bring their manufacturing jobs back. And when those folks wake up and realize that they’ve been lied to — again — they’re going to be even madder than they are right now.

The Undignified Auction

Image by argusfoto The Undignified Auction

Now, of course it isn’t Amazon’s job to provide regional balance of any sort. The question really isn’t what Amazon can do for Birmingham, but what Birmingham can do for Amazon. Birmingham’s second-tierness is exemplified by the fact that they have had a team in every failed football league in history. It seems more likely to come up short. First-tier contender cities in blue states and red will have, or be able to recruit, the potential workforce and stand a decent chance of meeting the other criteria; Birmingham’s peer isn’t Atlanta so much as New Orleans or Memphis.

Now, before I continue, let me get something out of the way: This is not a Red vs Blue thing. Not the least of which because all of the cities are varying shades of blue. Nor is a low tax versus high tax question. Taxes and regulation are two sources of expense and far from the most significant. When I talk about low cost and high cost, I mean total cost. The main driver not being (directly) public policy, but real estate.

If real estate costs aren’t an issue, though, they aren’t an issue. The Twin Cities, for example, are an example of an affordable city in a (presently) blue state. Denver is becoming more expensive, but there is plenty of room for expansion to the east.

One thing Eastern Colorado and the Twin Cities have in common is that they have unpleasant weather. This is also a “feature” of relatively affordable cities like San Antonio. Some are cold, some are hot, but a little unpleasantness isn’t such a bad thing. People move there for economy and prices are not driven up further by those who want “pleasant weather” or “a livable climate” or to be “not miserable outside.”

So flat, ugly, and/or unpleasant has its own charm in that regard.

But seriously, Whitmire is right that we are too large a country to have so much of our human capital bidding against one another to live in one of a few places. It may not be their responsibility, but it would be genuinely preferable if Amazon did manage to avoid putting something in Boston. Even Philadelphia, which is there on the coast and is blue as blue can be, would stand to provide our country with another tech location.

If cities can’t or won’t keep building up – and it doesn’t matter which – something has to give. Perhaps Amazon will help shape precisely what that will be. Amazon may not want or need the jobs, but somebody else might. Hopefully, there is a win-win opportunity here.

Meanwhile, back in the real world, it won’t be about what’s best for anybody but Amazon. And it’s guaranteed to be an undignified process:

Part of trying to lure Amazon, of course, involves bribery: cities are trying to put together a favorable package of financial inducements that will make them appear sufficiently “business-friendly.” As Slate’s Henry Grabar explained, “virtually every city and state will roll out a carpet of tax breaks, plum real estate, and other local incentives. (All for a company dedicated to undermining the local businesses that will pay taxes to support the services Amazon uses.)” It’s a common pattern among municipalities trying to convince large companies to move there. And as Grabar points out, even when a company accepts an offer, they also have a powerful means of extorting the city in the future, by constantly threatening to take their business elsewhere. The whole system “rewards corporations for being flighty, faithless partners to cities and punishes small and local businesses that cannot make credible threats to secure their own incentive packages.”

This dynamic is commonly called the “race to the bottom”: cities and states must compete with each other to give corporations the lowest taxes, the fewest labor regulations, the largest giveaways of property. The more a place is struggling, the more they need outside investment, and the more they’ll be willing to do in order to bring in new firms. This gives people like Jeff Bezos phenomenal leverage over the weak. If Bezos told the mayor of Detroit that his city would be a top-3 contender if and only if the mayor recorded a promo ad for Amazon in which he stood nude singing a song called “Hail To Thee, Amazon” while saluting the company logo, the mayor would have to consider the offer carefully. (A mayor who cared about the economic well-being of his residence probably ought to agree.) Honestly, that’s really not far off from what is happening: mayors are recording ads for Amazon, and the only thing that has kept them from fully debasing themselves is that Bezos hasn’t yet requested it.

Place your bets now.

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Will Truman is a former professional gearhead who is presently a stay-at-home father in the Mountain East. He has moved around frequently, having lived in six places since 2003, ranging from rural outposts to major metropolitan areas. He also writes fiction, when he finds the time. ...more →

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159 thoughts on “The Undignified Auction

  1. This seems overwrought. Corporate taxes should be lower anyway (perhaps even 0) (because they’re regressive and inefficient) and the fact that inter-state competition for businesses inadvertantly has this effect should be a good thing. Cities should just learn to build up. If earthquake ridden Japan can do it, so can others


        • States usually give tax credits to specific companies to move. Because state taxation varies, the precise form varies from state to state. States also give out tax credits to companies on threat of leaving the state: Illinois paid Sears to relocate to the Chicago suburbs from the Sears Tower, while everyone understood Sears was downsizing and shrinking. It’s like buying a rusted out Gremlin out of feelings of nostalgia.


      • Play the long game. Make it cheaper for the corporation, but higher for the workers. They’re getting paid enough, after all. It’s the workers who will be instagramming their lunch at the local artisanal small-batch peas-in-the-guacamole restaurants. It’s the workers who will be buying Harleys at the local dealer. It’s the workers who will be married to people who want to go to the local hobby shoppe to pick up some raw materials as well as stuff to assemble them together.

        You don’t really care about the corporation’s money.
        You care about the *WORKERS*.


  2. Back when I lived in Seattle, Boeing seemed to be the cash cow the city wanted to milk. Anytime Boeing wanted to do anything, the response seemed to be, “yeah, we’re gonna need a lot of money, for ah, environmental impact studies, or something. Why don’t you write us a check for 25 million to get us started.”.

    As regards to Amazon, it’s the same thing with stadiums or hotels or convention centers. Which city will whore itself out more to get the “plum”, which often seems to have a rotten core.


  3. I’ma not bet on this one (insider info means I have a leg up).
    50+% odds that Amazon’s new HQ winds up in PA.
    Read the requirements again — tuned and tweaked for it.
    (No one wants to move to Alabama. Hotter’n hell there (I know, it’s the humidity)).


    • A majority of the Fortune 1000 companies that were headquartered in Alabama in 2000 have moved their HQs to other states. Alabama is poised to lose one of its US House seats after the 2020 census. People appear to be voting with their feet.


  4. The comparison that comes to my mind is sports teams bidding for superstar free agents. The incentives get all screwed up.

    In most businesses there is a straightforward (at least in principle) calculation that an employee should bring more value to the employer than he costs. In sports there are competing versions of “value.” There is revenue, like most companies, and there is games won. The two are linked, but only loosely. This is before we get to the owners’ ego boost of having this superstar on his team.

    This corporate headquarters auction is similar. What is “value”? There is revenue: if the corporation increases tax revenue, whether directly or indirectly, more than it increases public expenses, then it is a win. But bringing in jobs is like winning more games: it is a different sort of value, only loosely tied to revenues and expenses. Finally there is the ego boost: we’re big time, baby!

    History has shown that in professional team sports an unchecked free agent market will spiral endlessly upward, blowing past where it makes sense as a financial matter. One major function of leagues in the American model of professional team sports is to regulate this market so that teams can actually make profits. Compare this with the English model used in worldwide Association football. The regulation is much lighter. Football clubs, especially top ones, don’t make money. Quite the contrary, they are money sinks. That they are kept afloat speaks to their cultural strength, not their finances. At the top level they are hobbies for the superrich: you can buy a big-ass yacht or a Premier League club. Both are ways of throwing money away. It’s just a question of which you find more fun.

    The inter-city competition for corporate free agents is, sadly, more like European football clubs and than the NFL, with its salary cap. I don’t see this going well. I see Amazon narrowing the pool down to, say half a dozen bids, and going to each to see what more it can squeeze. This will not go well for the winning city.


  5. You know, in addition to the tax incentives, which Bezos surely wants, there’s also the conversation to be had with target cities about culture, and the kind of culture Amazon needs to be successful. I think that conversation is one he also looks forward to having. He’s a hard charger, and a tough competitor, but he also plays a very long game, and he’s good at being an agent of change.

    I hope they land somewhere that needs it. I’m not sure Houston or Denver or the Twin Cities need it all that much, as compared to Detroit or Cleveland or Cincinnati.


    • Saul brings this up when people wonder why the big Silicon valley tech companies don’t move to much cheaper states like North Dakota or Nebraska. The land is cheaply available for the corporation and the company employees won’t have to pay as much for housing or spend so much time commuting. Taxes are much lower. Saul points out that there culture and politics in these states really are not a good fit with the soft liberalism promoted by the tech companies who see themselves as feminist, pro-immigrant, and pro-LGBT and secular and well-educated.


      • I’m going to mention again that a lot of tech companies have substantial presence in Utah… and not just the liberal part.

        Not saying such things don’t matter – Alabama’s politics hurt Birmingham’s bid, and this is a particularly difficult time in that regard – but there are quite a few factors. The biggest problems with North Dakota and Nebraska are that they don’t have cities large enough. Kansas has half a city, and has attracted quite a bit over the years.


        • There is also that cities in Alabama (like Tuscaloosa) have had to get desegregation orders lifted to attract big corporations. I don’t think Birmingham is under one (because almost all of the children are black), but the surrounding suburbs are.


      • Perhaps. My impression is major Midwest cities used to be liberal bastions until quite recently — like the 2016 election. There are major universities in Cleveland and Dayton and Cincinatti and elsewhere in Ohio and some distinguished liberal arts schools, Indiana has Purdue and Notre Dame and Indiana University, and more. The University of Illinois is fairly well known, and I’ve seen mention here and there of the University of Chicago. These places have art schools and museums and theatres. And though the number of firms has been reduced, this used to be industrial heartland of the nation, with literally millions of highly paid engineers and technicians.

        I understand it’s great fun to present everything from Pittsburgh to Wichita, and from Detroit to Chattanooga as sort of an American version of the Gobi Desert, but this region is not innately the least valuable part of the country, which ought to be scooped out and discarded. This is precisely the area that tech firms should have been settling into and expanding since the 1980’s — had they not all been persuaded to to relocate their production in Shanghai and Szechuan.


  6. A couple quibbles: Seattle can and does grow and it can/could absorb all those workers. The rub is that it can’t do it in the lazy easy way that non-geographically constrained cities do (buy outlying farmland, develop it, sell it, everyone’s generally happy except for a gradual increase in complaints about the traffic). Geographically constrained cities, in contrast, can grow but only if they try and tackle their NIMBY class which produces no end of screaming and headaches for the local government.

    Also regarding the Twin Cities. Yes, for about a month in the summer and two-three months in the winter the weather can be rather extreme in terms of heat/humidity and wicked cold. But the other nine months of the year it’s kind of awesome (and the summers and winters have been milder every year I’ve been here too, thanks global warming!) Also I’ll take the Twin Cities super dry cold over the Atlantic coasts crawl-into-your-body-and-never-leave humid cold and snowpocalypses any day of the week.


    • East coast (for a somewhat generous sense of “coast”) winters really depend on where you are. I have lived in Maryland, one county to the left of Baltimore, for fifteen years. In that time there has been one winter that sticks in the memory. We got about six feet of snow that winter, in three storms: one in December, then two about a week apart in January. The January ones sucked. Two feet on the road they can basically shove off to the side. The next two feet are a problem requiring front loaders, which take a lot more time. More typically we get one or two noticeable storms a year, taking “noticeable” to mean perhaps half a foot of snow. Shovel it out in the morning and drive to work–get there late, but that’s OK, since the boss is doing the same thing.

      The schools close for remarkably light snow, but that is because we are a semi-rural county. The superintendent thinks about a school bus on the remotest country road winding down to a creek bed through the woods, and makes the call based on that. This would be a bigger hassle for me if my wife weren’t a school teacher, and so gets the same snow days as the kids.


      • I was raised in Nova Scotia and despite the winters in Twin Cities being numerically colder than the winters in Nova Scotia I have never encountered a subjectively colder or more vile winter than the ones I endured in Nova Scotia.


          • Maribou my love, my trout, my pretty bit of cod! Did I ever tell you I’m part newfie? I was born in St John’s Newfoundland but my parents hustled out of the province when I was 2-3 before I could develop a proper newfie accent!


            • You did not! I’ve honestly never been there (have plans with sister to remedy that before 2020) so I’m taking their winters on 2nd-hand report.

              I know NS is worse than PEI though. We either have relatively mild with thaws (non-Maritimers, I’m still talking below freezing 95 percent of the time here), which is exciting because yay thaw!, or bury-us-all-in-snow-for-6-months-minimum, which means snow days and its own kind of exciting.

              Or maybe we just have Stockholm weather syndrome there…. hm.

              (The thought of anyone, except perhaps my friends who like Seattle because it rains so much, thinking that Denver has unpleasant weather, is baffling to me. Until I think about news media reports about flash floods and the like, then it makes a bit more sense.)


    • Yeah, NIMBYism is poison, and as long as people think they’re absolutely entitled to the windfall they get (in whatever form) from picking the right place to live n years ago this pattern will keep repeating itself.


    • To be fair, geographically constrained cities have one additional problem besides NIMBYs and that is American transportation policies. You can’t have a geographically constrained city where everybody drives everywhere. You need people to take transit. Getting the federal or state governments to cough up the money for transit is really hard and the culture war around cars makes things even more difficult. Seattle probably regrets not building a subway in the 1960s and 1970s as they originally planned to.


      • And even if you DO build a transit system, sometimes it’s not competitive.

        Example: Back in the early 90s I worked in an office located 495 and Rt 50 in Maryland, 3 pm on the clock of Washington DC. My co-oworker commuted from Chantilly Virginia (that’s 9 on the DC clock) via train and bus. Train in to central DC, train out to some site, buss to the closest drop off, half mile walk to the office. It took him and hour and a half and cost him IIRC 5 dollars a day. Of course, in the rain and snow, he’s walking on no sidewalks in the street. If he drove, it took him an hour.

        He choose to take transit because he preferred to spend more money in transit than on a car because he could read the paper and “relax”. Of course, his 9 hour day was effectively 12 hours with the commute time, when it could only have been 11.

        God only knows how much time and money that trip would take now given the congestion on the roads and “reliability” of Metro.


        • I have voluntarily lengthened my commute to ride on a train. I spent a year living just outside Philly without a car, mostly as an experiment. I worked in another suburb, also just outside Philly. The trip involved taking a regional rail into center city, then another out. The pricing worked because I could buy a monthly unlimited pass. It most certainly took longer, but it was time I could read or sleep, which is pretty much what I would have been doing at home. Then I moved to Maryland and worked in downtown Baltimore. Baltimore, it turns out, has a single subway line. Who knew? It works just fine, if it is where you want to go. In my case it was. I drove to the end of the line, parked in a free lot, and took the subway into downtown. It took only somewhat longer than driving, given the vagaries of rush hour traffic, and it completely solved the parking problem. And yes, it meant that half the trip could be devoted to sleeping or reading.

          I wouldn’t do that Philly commute today, because of family obligations. I probably would commute into Baltimore the same way, if I worked downtown.

          As for your former co-worker, the problem was that any commute from one side of a metropolis to the other side is going to be insane. This is why companies like to locate downtown: it is equally inconvenient from all directions. I will happily go to either downtown DC or the northern suburbs from where I live. The south side? I have to be highly motivated.


          • Many of transit systems, and especially the bigger ones, outside the United States are designed so you can get from periphery to periphery without going through downtown every time. Transit system in the United States, not so much.


          • “any commute from one side of a metropolis to the other side is going to be insane.”

            Indeed. However, even the “into city center” can be a problem. My prior employer was near DC in a MD suburb. I lived much farther out, frankly, so I could we could afford a house. It took me an hour to get to work. My employer participated in a mass transit subsidized program to get drivers into mass transit. People asked me if I wanted to join. But why would I when it’d take me an hour to get to a metro parking lot, just to get on the train to go farther into town? A one hour drive vs a one hour drive and 30-60 min train ride? I’ll take the one hour drive…driving a stick over the alternative.


      • I was pleasantly surprised when the Denver suburban counties voted for a permanent sales tax to fund the light rail system. It’s turning out to be insufficient — mostly because the Burlington Northern priced their right-of-way far beyond what anyone thought — but was enough to bring in some matching funds and get large chunks of the system built.


      • Granted, Lee, but the denser and more upzoned the city is the easier it is to make mass transit economical (though granted getting right of ways for rail or the like is harder/costlier).


    • Seattle has absorbed its people, and could absorb more, but (a) that doesn’t mean the politics allow for it and (b) it creates ill-will and discord in the process even if they do, which is what Roberts was kind of getting at. So while it’s possible, it isn’t really possible in a desirable way.


      • Yes but Roberts tone really smacked of anti-density sentiment to my own subjective read. His extolling single family neighborhoods, his coy allusions to inequality and affordability, his earnest suggestion that the company should take its jobs to some under privileged city? I’ve read that fan dance before. I’m probably being over sensitive but I rolled my eyes and said “Gosh if ONLY there was a way to fit more people into that gigantic parcel of land Seattle covers! Building more densely? Nope, tech jobs are cancer.”


  7. Denver is becoming more expensive, but there is plenty of room for expansion to the east.

    I still say that this sentence shows a fundamental misunderstanding of the factors that make Denver attractive, and how the metro area will grow in the future.


    • I suspect the growth will not occur in the east. Just saying there is room for it to in order to mitigate the Seattle problem. And expensive /inexpensive isn’t the prime variable, but it’s obviously one I am interested in. Amazon, for all I know, has criteria that’s gonna lead it to pick Boston (ugh).


          • I don’t think he’s saying it’s impossible so much as it’s undesirable.

            That’s not where the well-paid Amazon people are going to want to leave, but I don’t see why it wouldn’t be a release valve for the city’s support staff, so to speak, and easing tensions and real estate costs.


          • You stop living in Colorado Proper about 20 miles east of the airport. At that point you start living in Kansas. You can’t see any mountains. You aren’t protected from inclement weather. You get tornadoes. Tornadoes!

            Seriously, you’d be better off in Leadville.


              • I think I’m still missing something.

                What people think of as Colorado, even folks like me who live here, is the western part starting a few dozen miles east of the front range. Further east is like a whole nother country, and it really might as well be.


                • It’s a whole nother country… but with direct freeway access to Denver.I consider it somewhat like Snohomish County, Washington. Everett has almost none of the advantages of Seattle (it’s flatter, it’s colder, it’s windier), but it has access to Seattle and its population has exploded.


                    • They’re going to try to keep everything as close to the mountains as possible, but there are limits to how much you can do with up-and-down over the longer term. Seattle and Austin being two examples that come to my mind. Seattle is just stuck. Austin is trying to figure out how they can do more east-west. Denver already has the Interstates that Austin wishes it had.

                      Back home, there was of course The City. Then the first place to grow aside from that where I grew up, near The Bay, which was attractive because of the water. Eventually, though, there wasn’t enough land there to go around and commute times became too long so growth started to the west and north. Then the inland southwest. Then the northwest. Then most recently the south-central. The only patches of land that don’t get swallowed up eventually have chemical treatment plants or no way to build high-volume transportation to.

                      So I guess where I’m coming from here is that I almost always begin with that end in mind.


                      • OK, that makes a lot of sense. I thought you were saying they were going to go east next, and really it’s going to be A LOT of people before that happens.

                        I wouldn’t be surprised to see people commuting from Pueblo to Denver, eventually, TBH.

                        Our interstates are pretty damn sweet.


                        • My wife nearly does–from pueblo west to the north side of springs. An hour a day, but she’s probably making 20 grand more a year (at least) than she would make in pueblo.


                            • Yeah, at my last job, I had a co-worker who commuted from Pueblo.

                              My friend who recently moved from San Francisco (and outlying areas) told me that her commute was 2 hours.

                              Moving to Colorado Springs and driving “only” an hour to get to work probably sounds like heaven to a handful of folks in some of those nuttier cities out there. (And I can buy a house? For only $300,000? And it’s got 2000 square feet?)


                              • I’ll add that our interstate is pretty damn crowded (at least from Pueblo to the north side of Denver). I think the stat is that CO has about a couple million more drivers in the last 10-20 years, and most of those are on the front range.


                                • When I moved here a few months under 30 years ago, Colorado’s population was 3.3M. Today it’s about 5.5M. The very large majority of the growth went into the strip from Colorado Springs on the south to Fort Collins on the north, in a 35-mile-wide stripe centered on I-25. I cut it off at the Springs, Pueblo’s population has barely budged over that period.

                                  I-25 from E-470 to Fort Collins, which I drive regularly to see my granddaughters, is a nightmare. It’s worse than the four-lane parts over Monument Hill. I’ve taken to telling my wife to put her earbuds in and shut up because I can’t stay “in the groove” with the traffic flow if there’s conversation or lyrics. Think California freeways, but the drivers aren’t as good.


                                  • Yeah, Pueblo’s population has remained the same, although I wonder if the county has grown some, but the interstate traffic between Pueblo and Springs is worse than it was. More commuters, I would guess.

                                    And +1 on the drivers. Man, CO drivers are a special kind of stupid (and I’m saying this as a native who’s lived in other places).


                      • …but there are limits to how much you can do with up-and-down over the longer term.

                        The I-25 corridor from Denver north to Fort Collins has lots of room and is, for various reasons, much more attractive than following I-70 east onto the prairie. The area inside the C/E-470 loop has a surprising amount of semi-blighted space that can be used more productively. Denver and the west-side suburbs are all densifying.


              • I would add going east from the mountains you enter what was at one time called the Great American Desert. It may not be an actual desert, but it is pretty close. Going east has added water costs/issues.


                • This is an excellent point, too little appreciated even by the people who live here. Once you start east from Denver, it’s a long ways — 150 miles, maybe? — before there are any surface water or aquifers thick enough to be worth mentioning. Even when you get there, the surface water rights are grossly over-committed, and the state has been tightening up on non-sustainable aquifer draw downs. Aurora, the big east side suburb, has been successful at scavenging water from distant sources — all either north, south, or west of the city.


                  • It’s the whole list of things. Summarizing my own, and others’, comments.

                    The weather gets worse rapidly once you are far enough east of the foothills. Denver sets record high and low temperatures every year now. It’s because the official recording station is at DIA, not Stapleton, and the ten miles farther east makes that much difference.

                    The scenery gets worse (unless you’re a high plains junkie like me). Scenery is weird. I can show you places in my west-side suburb where a house on the west side of the street, with a view over a guaranteed open space, is worth $150K more than the same house on the east side of the street where the view is blocked by houses and trees.

                    Annexing to the east doesn’t add water rights, but increases water demand. Within the last decade, my suburb has acceded to unusual demands by some long-time elderly landowners in order to acquire their irrigation ditch company shares and the water rights that come with those shares.

                    Add to that state law requires that if a city annexes they have to run water and sewer quickly. My suburb annexed a strip south of the former Rocky Flats plutonium processing plant in order to control what was done with the land, and no one complained about the cost of extending the water and sewer lines that were empty for more than a decade.

                    A developer attempting it without city annexation is required, these days, to demonstrate a 25-year water supply, which has become very difficult. Highlands Ranch, an unincorporated “census-designated place” with a population over 100K now, will never happen again. Highlands Ranch is one of the weirdest things ever. Think about it: 100K people whose local government (other than law enforcement) is done by what is essentially a gussied-up homeowners association.

                    The transportation infrastructure really does assume no areas of dense population more than about 20 miles east of I-25. I-70 and I-76 east of the current metro area were never intended to connect suburbs.


                    • Really, the water issue seems like the long-term brake on growth to the Springs-Denver-Ft.Collins corridor. It’s obvious enough to me that not only do people want to be near the Front Range because the mountains are pretty, but because they elevate the water table to a point where you need to drill all the way down into the deep Oglalla to have a wet well. And High Kansas (nee: Eastern Colorado) is clearly a desert.

                      ‘Course, in California we’re well used to thinking about water. I’m living in the last part of Los Angeles County that has any flat land to develop, and the “natural limits” of this territory are being defined not by elevation but hydrology. We’re running up against the limits of what we can water even in wet years. Folks from places back east where a “drought” means it only rains two inches a week are going to have a hard time relating to this.

                      Anyway, I think y’all are going to need some more lanes on I-25. And in the long run, maybe a high-speed rail corridor running down the median.


                      • Tangentially related, I keep thinking Colorado at some point is going to bail on all the water-use agreements it has with California and start diverting all that stuff for home use before it ever leaves the state.

                        Not, like, tomorrow, but in a climate dystopia? Heck yeah.


                        • Then the California Air Force makes a low-level sneak attack and plants a couple of big penatrator bombs at the base of each of the dams. Colorado counterattacks the HVDC lines carrying gigawatts worth of Wyoming wind power to Southern California. Then… Nah, @j_a would hate it…


                          • The fact that your terrorists are lame doesn’t mean that your CO regular troops can’t also be lame. But at least as a military action, blowing the HVDC lines (*) makes a little (key operative word) more sense.

                            (*) For goodness same, show you are professionals and blow only the angle and the tension pylons, not like the lame terrorists blowing all pylons. What a waste of C4. Waste not, want not. Sad.


                          • Yeah, it would. And we have mountains to fight from and some pre-built fortresses to hide in (Cheyenne Mtn anyone) and I’m not sure they’d win, even with the superior numbers). At least we’d make a Spartan stand about it and maybe negotiate some better terms….

                            Speaking of demotic prose, I’m now starting to sound an awful lot like a Harry Turtledove novel.


                      • Anyway, I think y’all are going to need some more lanes on I-25. And in the long run, maybe a high-speed rail corridor running down the median.

                        Finishing I-25 to at least three lanes each way from Fort Collins on the north to Colorado Springs on the south is high on CDOT’s list. I drove the remaining two-lane stretches both north and south over the last month, and they suck. Rebuilding the elevated portion of I-70 got priority because it’s past its design lifetime and they’re repairing repairs.

                        With you on the rail. Relatedly, Hyperloop One picked a three route plan hubbed at DIA with one leg south to Pueblo, one north as far as Cheyenne, and one along the I-70 corridor as far as Vail, as one of their finalists. The company has already put up money to cover the costs for CDOT to work with them on more details.


          • I think this might be a “compared to what?” situation.

            Compared to what was there in 1991? Oh, heck no.

            Compared to the Bo-Wash Corridor? Yeah… I can see how it would look like lots of open space.


              • The urbanized area of the county I live in in the Denver metro area is more densely populated than the urbanized area of the NJ county in the NYC metro area I lived in (straight across Lower New York Harbor from the city). Urbanized area is an important qualifier since ~50% of the land area of this Colorado county is mountains, national forest, state parks, or open space that can’t be developed.

                It’s not just a calculated value, my Colorado suburb felt a lot denser than my NJ suburb. The big difference, though, was how much closer the Colorado suburb was to areas that were essentially empty.


                      • “The shore” is a narrow strip right along the coast (at least when we lived there, seasonal rentals disappeared by the time you were much more than a mile inland). The vast majority of the area (and people) are NYC suburbs. On the order of 10% of the entire population commutes into NYC every weekday, and another chunk into the office parks farther north in NJ. The west end of the county provides a lot of bedrooms for Princeton, and I’m told that there are some Philadelphia commuters starting to show up there. It’s classic suburbia, with a modest tourist attraction tacked onto the far east edge.


          • Nope, not crazy. What you really remember is that when you top the big hill on highway 36 (the Turnpike) going NE from Denver and suburbs headed to Boulder, there’s three-four miles of completely open space before you hit Boulder. It’s a combination of Open Space Colorado (half of Colorado State Lottery money is used to purchase land that will never be developed) and Boulder open space (Boulder started buying up a “moat” around the city back in the 1930s or 1940s of land that couldn’t be developed).

            OTOH, when Boulder did its fundamental zoning way back when, they misjudged how to split between residential and commercial/industrial. As a result, they have far more jobs than they have housing for, and the Turnpike and Diagonal are nightmares headed in to Boulder during the morning rush hour, and headed out during the evening rush hour. If the weather turns bad (snow, slush) for the evening rush hour, it may take three hours to get out of Boulder and the three miles up the hill on the Turnpike. Local microclimate dictates that the weather tends to turn bad at rush hour. When I worked in Boulder, in the winter I kept my gas tank full and audio books in the car.


              • My zip code area is a bit over 5,000 people per square mile — seven square miles, something over 35,000 people, meets most definitions of urban rather than suburban outside of the densest coastal cities. In June/July, I can show you hay bales within a half-mile of my house. If you’re willing to stay up late during the full moon, you can sit on the deck and listen to the coyotes howl. (For the record, four of five NYC boroughs have coyotes, they’ve just learned to be quiet. Marvelously adaptive beasts.)


                      • We had a cougar in the I-25 greenway – a very narrow strip between I-25 and some very urban parts of Colorado Springs – for years; she was smart enough to avoid people and dogs for the most part, and never attacked anyone, so they never tried to capture her.

                        We get bears downtown quite regularly here including most recently in the kitchen of one of our right-in-the-smack-middle-of-downtown pizzerias, and a while before that, in a tree on my workplace’s quad during homecoming (we’re a mile north of downtown’s epicenter, or so).

                        Fun times!

                        We stil have a pronghorn herd at the airport, too, though the ones along the main drag on that side of town have mostly dispersed, died, or been moved in the last 15 years or so as it got built up.


                        • Yeah, Springs tends to get more bears as you guys are right on the mountains, and I’ve seen the antelope at the airport. It’s a bit weird for us to have bears as my house is about twenty miles from the mountains as the crow flies (and I think I remember the bear in the pizza parlor–remember, Pueblo shares your news stations). But the bears come down the river into our area and through the reservoir. Many years ago, they caught a bear in the pepsi distributor’s warehouse which was right next to the steel mill.
                          Occasionally, weird things happen. I can think of two times we had moose in Pueblo West. And the recent bear was unusual.


                          • Heh. I forget about the news stations ’cause I always just hear about these things through the… well not rumor mill, because they’re true and there’s evidence I can look into later. But, like, I forget that people know about anything local to me for any reason other than first-hand gossip :D.


  8. I think a city like Sacramento is the kind of second-tier city that could attract Amazon HQ2. Mainly because Sacramento is already getting people priced out of the Bay Area who want to stay in California. The city is decently sized, near universities (Davis, University of the Pacific, Sacramento State), etc.


    • Last job hunt, Clancy was deciding between opportunities in Sacramento and the one she took (as well as a couple others in the Great Lakes). Anyway, we were surprised at how well Sacramento did in CoL estimates (108% of the national average). But other estimates I’ve seen since are far less favorable (122% of the national average). I’m not sure if it’s just that estimates vary wildly or if there has been a rapid escalation.


      • I don’t remember when the last job hunt was but I wouldn’t be surprised if there was a rapid escalation considering how insane the Bay Area housing market it. But there has always been a fairly long trend of Bay Area people deciding to move to the Sacramento-Metro area to settle down.

        This happened well before the current boom/housing unaffordability crisis. And Sacramento is still very affordable compare to the Bay Area. They also have a pretty good light rail network and there are some tech companies already in the area. Intel has a presence in greater Sacramento-Metro.

        But Sacramento is basically a smaller scale version of a Bay Area City. There are good restaurants, bars, and breweries but much fewer than the number you find in the Bay Area. Some of these restaurants are also a bit trapped in time and still working with food trends that were hot and popular 20 years ago.

        But there is a really good Dim Sum place in Sacramento and a good Ramen chain which moved from Japan.


      • Oi! Nashville’s got a fucking chance, not that you’ll hear that from them.
        I don’t think they’ve even publically said they’ve a bid.
        They’re runner-up to Pittsburgh, on “close enough” basis. (Unlike Philly, which is State Wants Money, and Philly’s Where It’s At)


      • Pure speculation, they’ll want a history of attracting at least a couple thousand more-or-less high end tech people into the local economy annually, for at least a few years. Raleigh probably clears that hurdle. Birmingham and Des Moines, probably not. Don’t know about Nashville. A friend who works for one of the Alphabet outfits here in Denver says there was an uptick in Amazon “feelers” among their tech staff starting a few months ago — she thinks Amazon was sizing up the potential local talent pool.

        A random thought occurred to me this morning when I was looking up something else. Assuming they want into a growth situation, whether a state is likely to get another US House seat after 2020 (or at least not lose one) might be a flag. The probable losers in the analyses I’ve looked at are all in the extended Rust Belt, plus Alabama. Most likely gainers seem to be North Carolina, Florida, Texas, Colorado, Arizona, and Oregon.


  9. I want to talk about the knowledge worker comment. Is it true that the tech/knowledge economy is the only that is growing or is it that cities only want to attract knowledge workers and want to shred their images as being blue-collar.

    This strikes me as a lot of people still working by the Richard Florida playbook and thinking by building downtown loft style apartments and performing art centers, they can get workers who want to live in places like NYC, LA, SF, Portland, Seattle, etc. Maybe true for some cities but not true for all.


  10. Related to the Knowledge Worker issue:


    The trends seem to be more and more health care workers, income inequality by geography and education, the death of retail, and automation not doing as much damage as expected. The income inequality section:

    Today, rich, college-educated Americans living in or near the largest cities are thriving. Poorer, less educated Americans living in rural areas are falling further behind. Meanwhile the middle class, once composed of non-college-educated men working in manufacturing and construction, is being hollowed out by globalization and technology.

    The next 10 years may exacerbate inequality by earnings and geography. Jobs for people with bachelor’s degrees are projected to grow twice as fast as jobs for people with just high school degrees.


  11. I believe the main Illinois Democratic Governor contestants have campaigned against providing any incentives for Amazon to move to Illinois. I have not followed this closely, just heard clips on the radio, but one of them specifically made the claim that Amazon was likely only to bring lower-paid jobs to Chicago. It was surprising given Illinois’ history of playing this game; though I suspect the Mayor might have his own ideas.


      • No soda tax left behind!

        I don’t like these types of bidding wars, but I don’t see how elected officials can’t play. What’s interesting to me in that link is the insinuation that the Republican Governor will be active in supporting the bid. Scanning down I can see why: Amazon seeks a “stable and business-friendly environment.” The Governor is going to argue that his bag of “business-friendly” reforms are needed to prevent businesses from leaving and landing new businesses. So I guess the billionaire Democrats trying to get their party’s nomination had some incentive to come out against “race to the bottom” economic development.


        • What’s interesting to me in these debates is that there is a vast gulf between what experts and policy wonks say is good policy/action and what politicians end up doing.

          The policy wonk position and the economics positions seems to be that cities should never end up bidding on sports teams, big events like the World Cup or Olympics, or doing things like the Big Dig.

          The policy wonk and economist position is that these are losing propositions to cities and that letting things be natural is better but politicians and government officials feel compelled to bid on these things.

          Here is what I wonder:

          How much is this bidding is because of corruption, kick backs, campaign contributions, or the hope of post-government cushy jobs for said companies?

          How much of it is because politicians think what they are supposed to do is give jobs and growth to cities? Based on the Atlantic article, jobs for people without college educations are likely to get suckier and suckier. Perhaps politicians just feel compelled to get the best lowest-wage jobs that they can get for their citizens by any means necessary?

          If the Amazon jobs are really low wage, then people might not move for them and the jobs will go to people who are already residents.

          It reminds me of the Teachout v. Cuomo primary. Teachout crushed Cuomo among middle-class and above good government liberals in the more expensive parts of NYC. Cuomo still cruised to reelection by winning among POC and low-income voters in NYC and other places.

          So perhaps a lot of people really only care about jobs and growth, corruption be damned. I think a lot of middle-class good government liberals don’t understand this because they generally don’t have government jobs (except at the prestigious level) and they don’t understand that the benefits of good government liberalism are often opaque and diffuse.


          • The policy wonk position and the economics positions seems to be that cities should never end up bidding on sports teams, big events like the World Cup or Olympics, or doing things like the Big Dig.

            Sports, certainly. One of the abiding mysteries of our age is that cities are allowing themselves to be extorted of soccer stadiums. Why? I can see the political logic with actual major sports, but MLS enthusiasts notwithstanding I don’t see a politician worried about being tarred with losing the local soccer team. So why are politicians agreeing to terrible deals for soccer stadiums?

            My guess is that there is enough money in soccer to bribe local politicians. Either that or the politicians are so accustomed to making terrible deals with sports teams that they do it reflexively. I gots to form that jai alai league and get me a piece of that sweet, sweet action!

            As for the Big Dig, I don’t think the policy wonks oppose major transportation infrastructure projects in general. The Big Dig in particular seems to have been a spectacular boondoggle. Also, a lot of policy wonks favor mass transit, not spending money so cars can travel more easily.

            So perhaps a lot of people really only care about jobs and growth, corruption be damned. I think a lot of middle-class good government liberals don’t understand this because they generally don’t have government jobs (except at the prestigious level) and they don’t understand that the benefits of good government liberalism are often opaque and diffuse.

            You have just described 19th century urban politics.


            • And maybe a bit today as well.

              The Big Dig might more have been a project that just got out of hand. I am thinking more of the one in Seattle to replace or do something with the old Alaska Viaduct. Here, the mayor was against the underground tunnel and other politicians were able to campaign against him and get him primaried because of his opposition. The tunnel dig in Seattle proved to be a massive clusterfuck of epic proportions.


          • I think politicians seek these types of deals as signature accomplishments for their next campaign. I think things like basic good governance is often difficult to detect or can be obscured by events. If the trains run on time, the Mayor does not get any credit if that’s usually been the case. If an unforeseen snow event shuts down the city, the Mayor is a crook.

            I suspect these deals are widely popular, regardless of class. The complaints against them involve diffused costs that nobody directly experiences. It might be interesting to see some polling.

            I should emphasize I don’t know that the jobs might be lower wage, it just stuck out that a candidate was suggested this since I’ve never heard that assumption before.


            • LinkedIn has an office in Omaha to handle all the customer service stuff. So there is evidence that the less prestigious jobs and lower wage jobs get sent to second-tier cities.

              And I’ve seen wage statements for developing nations, they get paid shockingly low amounts.

              Now Chicago is not Omaha but is it San Francisco or NYC is an interesting question.


  12. I’m still very skeptical of the premise that some cities are ‘geographically constrained’ and others are not.

    Political boundaries are entirely human constructs.

    The only US city where ‘geographic constraints’ is somewhat fair is Honolulu, and even at that Oahu has a countryside.


    • I’m pretty sure the island of Manhattan is constrained by more than human constructs. Brooklyn is also constrained by water and its boarder with Queens and there is no reason to create Brooklyn-Queens. But I suppose that San Francisco-Oakland-Berkeley and surrounding places could merge into one mega city. The question is why would they?


      • It is interesting that you cite the possibility of three cities — SF/Oak/Berk — combining as one but treat a singular city — New York City — as multiple ones that cannot be combined.


      • Saul Degraw: The question is why would they?

        Kazzy covered it, but why then did New York and Brooklyn merge in the first place?

        (Actually I really don’t know, I’d have to look it up)

        (FTR, Manhattan & Brooklyn should be separate cities, Bronx and Queens counties of New York State, and Staten Island should be Richmond County, New Jersey.)


        • The brief wikipedia answer is that the New York State Government decided in the 1850s or so that it would be more efficient to consolidate all the land around Manhattan into one city. Brooklyn resisted the longest because it was largely white, Protestant, and Republican compared to the more multi-cultural and Democratic Manhattan. Eventually Brooklyn narrowly went for consolidation because of concerns over money and future water supplies but only narrowly. The annexation vote was done consolidation of 64,744 votes for consolidation, 64,467 votes against.

          Is NYC the only city in United States that is spread among more than one county? That was probably done to soothe feelings of losing control. San Francisco is the only “City-County” in California. the City of Los Angeles is big but much smaller than the County of Los Angeles (3.9 million residents in Los Angeles the city, 10 plus million in Los Angeles the County) per wikipedia. Accordingly the county superior court system is an unwieldy chaotic mess.

          Manhattan (Manhattan County) and Brooklyn (Kings County) are separate counties which gives them some different government. They have different courts, different elected DAs, and Borough Presidents. What makes Brooklyn get their own city and not Queens? Or the Bronx and Staten Island for that matter? Every borough of NY is also a county. So NYC has 5 district attorneys. Staten Island is the only NYC borough with a population under 1 million. In fact, it has less than 500,000.


        • New York expanded from just Manhattan and part of the Bronx into the current five boroughs in 1898 for complicated reasons. One is that that Chicago was catching up fast and New York did not want to become the second largest city in the United States. Adding Brooklyn’s 900,000 residents would prevent that. Another reason was that up-state Republicans thought that adding Republican voting areas in Brooklyn and Queens could end Democratic dominance in New York. They were wrong. The third reason was that the five boroughs were already economically united, so politically uniting them would make sense. It would give New York room to house more people to.


      • Brooklyn and Queens are already part of the same city. Both are boroughs of New York and have been since 1898.

        There are lots of theoretical reasons why San Francisco-Oakland-Berkely could unite. One is that Oakland and Berkeley are unofficial boroughs of San Francisco and you might as well formalize the arraignment. Since San Francisco and Oakland are the two biggest urban areas in the Bay, they can deal with the housing crunch together. Berkeley is nearly just as urbanized. Oakland could benefit from getting tax revenue from San Francisco’s businesses.


    • You don’t even need to change the political boundaries. People can live in one city and work in a neighboring city. Or a business could just set up an office in a neighboring city. Microsoft and Nintendo do just fine in Redmond.

      The suburb is also less likely to elect literal socialists to city government.


  13. I want to push back on Seattle having no room to build. It has less than half the population density of San Francisco. Except for a fairly small downtown commercial core, the city is covered in single-family homes and low-rise apartment buildings. There’s plenty of room to build up. The real problem is transit, but higher density would make subway expansion more feasible.


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