What would landing Amazon H2Q mean for Toronto's already red-hot housing market?
The city already as a very low vacancy rate and one expert says the headquarters could make the city even more unaffordable.
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Toronto has great universities, good quality of life and an educated, diverse workforce — all qualities that make the 6ix stand out in the race to land Amazon’s second North American headquarters.
But one thing the city definitely does not have is enough affordable housing to absorb the waves of tech workers the headquarters would surely bring. And the possibility of getting the site, now that the Toronto region has officially made the shortlist, has experts and advocates already thinking about what the impact would be on an already saturated market.
"Where are they going to find housing? There's no housing," asked Toronto ACORN member Alejandra Ruiz-Varga, who is concerned getting Amazon would drive up rents.
Javier Vivas, director of economic research for real-estate listings website realtor.com, said any big headquarters move has “the power to really transform the entire housing market.”
While that could be good for a smaller market like Indianapolis, it would make the GTA even less affordable in neighbourhoods near proposed Amazon sites.
“Toronto is just one of those places that is a little bit more sensitive to anything that moves the needle when it comes to housing affordability,” Vivas told Metro over the phone from California.
Vivas thinks Amazon’s final decision will come down to what’s best for the company, but Geordie Dent, executive director of the Federation of Metro Tenants' Associations, thinks Toronto’s housing crisis will cost the city the headquarters.
Toronto Global, a joint bid that includes the GTA, Kitchener-Waterloo and Guelph, is the only Canadian region on the short-list and the headquarters would bring a $5 billion investment and 50,000 jobs to the region.
But Amazon employees would face an extremely low vacancy rate of one per cent in the Toronto region, according to the Canada Mortgage and Housing Corporation. Meanwhile condo rents rose nine per cent in the last part of 2017, according to market research firm Urbanation, to an average of $2,166.
Not to mention still simmering housing prices.
"They're not all millionaires, some of them are software developers who make a good wage, but if a good wage only buys you a shoe-box condo, is that really what you want for your employees?” Dent wonders.
Other cities on the short list such as Pittsburgh, where the average rent for an apartment is $1,440, according to RentCafe.com, or Indianapolis, where it’s only $971 are much more affordable.
Paul Kershaw, a professor at the University of British Columbia and affordable housing advocate, said he suspects Vancouver’s high housing prices played a part in that city not making the short list, and Toronto’s situation isn't "necessarily in its favour.”
But he believes landing Amazon would help drive up wages for young workers, which have been left behind by rising rents and home prices in the GTA.
The city would then need to act quickly to accommodate the extra demand, by using policy levers like an empty homes tax, which are needed to ease the housing crisis for people already living in the region, he said.
Correction: This article has been updated from a previous version that incorrectly stated Amazon's investment was $5 million.