1 00:00:02,160 --> 00:00:10,720 Speaker 1: There's an ugly standoff going on in Seattle. Anxiety is 2 00:00:10,840 --> 00:00:14,200 Speaker 1: in the air, the housing market is nuts. Hundreds of 3 00:00:14,240 --> 00:00:17,080 Speaker 1: people are moving to Seattle each week. They're attracted by 4 00:00:17,120 --> 00:00:20,279 Speaker 1: Amazon and other booming tech jobs here, and the homeless 5 00:00:20,280 --> 00:00:23,240 Speaker 1: population is growing, with tents popping up across the city. 6 00:00:23,880 --> 00:00:28,120 Speaker 1: Housing has become scarce and expensive. Local authorities say they 7 00:00:28,120 --> 00:00:30,720 Speaker 1: don't have the money to deal with the problem, so 8 00:00:30,760 --> 00:00:34,080 Speaker 1: the city has been considering something called a head tax 9 00:00:34,200 --> 00:00:39,800 Speaker 1: on big businesses. Then on May two, Amazon, Seattle's largest employer, 10 00:00:40,000 --> 00:00:44,280 Speaker 1: decided to play hardball. Amazon employees more than forty people 11 00:00:44,280 --> 00:00:47,160 Speaker 1: at its headquarters and said it was halting its expansion 12 00:00:47,159 --> 00:00:49,880 Speaker 1: plans in the city pending the vote on the head tax. 13 00:00:53,560 --> 00:00:58,320 Speaker 1: Amazon's move provoked an outpouring of rage on both sides. 14 00:00:58,720 --> 00:01:04,760 Speaker 1: Construction workers tested the tax outside Amazon's headquarters. Meanwhile, homeowners 15 00:01:04,760 --> 00:01:07,760 Speaker 1: are divided, with tensions running high. It led to a 16 00:01:07,760 --> 00:01:10,800 Speaker 1: showdown at a meeting several city council members hosted later 17 00:01:10,840 --> 00:01:15,560 Speaker 1: that day. I'm a lifelong Democrat, I have never been 18 00:01:15,600 --> 00:01:19,720 Speaker 1: so fed up and disgusted and embarrassed for my city. 19 00:01:20,920 --> 00:01:29,240 Speaker 1: All Right, we do not trust you anymore. You have 20 00:01:29,560 --> 00:01:35,000 Speaker 1: the most regressive tax structure in our city, which is 21 00:01:35,200 --> 00:01:38,600 Speaker 1: in a state with the most regressive tax structure in 22 00:01:38,600 --> 00:01:45,280 Speaker 1: the entire country. So who are you gonna take the 23 00:01:45,319 --> 00:01:48,160 Speaker 1: money from. I'll tell you say, we need five billion. 24 00:01:48,280 --> 00:01:50,880 Speaker 1: That's a pretty conservative estment. Five billions how much Jeff 25 00:01:50,880 --> 00:01:53,640 Speaker 1: Bezos made in ten minutes when Amanon announced they bought 26 00:01:53,640 --> 00:02:04,680 Speaker 1: Whole Foods. We're gonna tax that mother. On Monday, the 27 00:02:04,800 --> 00:02:07,640 Speaker 1: city council had to decide whether or not to move 28 00:02:07,680 --> 00:02:27,080 Speaker 1: ahead with this controversial new tax. Hi, I'm Brad Stone 29 00:02:27,720 --> 00:02:31,160 Speaker 1: and I'm Karen Wise. And this week on Decrypted, we're 30 00:02:31,160 --> 00:02:33,959 Speaker 1: taking a look at Seattle, which just found itself pitted 31 00:02:34,000 --> 00:02:37,440 Speaker 1: against one of the world's largest companies run by the 32 00:02:37,480 --> 00:02:40,600 Speaker 1: world's richest man. The growth of Amazon and other tech 33 00:02:40,639 --> 00:02:43,240 Speaker 1: companies has created a lot of high paying jobs here, 34 00:02:43,720 --> 00:02:46,360 Speaker 1: but it's also contributed to soaring rents and home prices. 35 00:02:46,960 --> 00:02:49,720 Speaker 1: Recent studies linked the lack of affordable housing to an 36 00:02:49,760 --> 00:02:53,440 Speaker 1: increase in the homeless population. As tech clubs around the 37 00:02:53,480 --> 00:02:56,919 Speaker 1: world grapple with these unintended consequences of the tech boom, 38 00:02:57,120 --> 00:03:07,520 Speaker 1: can Seattle, Washington paved the way stay Last week, I 39 00:03:07,560 --> 00:03:09,840 Speaker 1: sat down with someone who's been following this story for 40 00:03:09,880 --> 00:03:12,960 Speaker 1: a long time. Her name is Erica C. Barnett. She's 41 00:03:13,000 --> 00:03:15,200 Speaker 1: a long time city hall reporter and now writes a 42 00:03:15,240 --> 00:03:18,000 Speaker 1: progressive blog see is for Crank. I came out here 43 00:03:18,080 --> 00:03:22,480 Speaker 1: for a job at Seattle Weekly, and um, I came 44 00:03:22,480 --> 00:03:24,040 Speaker 1: out here in the middle of the summer, and it 45 00:03:24,120 --> 00:03:26,240 Speaker 1: was the most beautiful place I'd ever seen in my life. 46 00:03:26,639 --> 00:03:29,040 Speaker 1: Eric has been living in Seattle for close to twenty years. 47 00:03:29,480 --> 00:03:32,079 Speaker 1: I couldn't believe, you know, the mountains and the water 48 00:03:32,320 --> 00:03:36,480 Speaker 1: and just you know, the beautiful hills and the neighborhoods 49 00:03:36,560 --> 00:03:39,880 Speaker 1: and just everything about it was so beautiful. And I agree, 50 00:03:40,040 --> 00:03:43,800 Speaker 1: it is gorgeous, rainy, but gorgeous. That's part of what 51 00:03:43,880 --> 00:03:46,360 Speaker 1: drew me here too. But the city has changed a 52 00:03:46,360 --> 00:03:49,080 Speaker 1: lot since Erica first moved here. I lived in Ballard 53 00:03:49,120 --> 00:03:51,240 Speaker 1: when I moved here, and and I left because it 54 00:03:51,280 --> 00:03:55,160 Speaker 1: was so sleepy. And look at Ballard now, it's completely different. 55 00:03:55,880 --> 00:03:58,480 Speaker 1: Seattle is the fastest growing housing market in the US, 56 00:03:58,560 --> 00:04:01,640 Speaker 1: and home prices have gone up ab in the past year, 57 00:04:01,880 --> 00:04:04,200 Speaker 1: and they did the same in the previous year. The 58 00:04:04,200 --> 00:04:06,720 Speaker 1: median cost of a single family home is almost eight 59 00:04:06,760 --> 00:04:09,880 Speaker 1: hundred and twenty thousand dollars a lot of that growth 60 00:04:09,920 --> 00:04:12,880 Speaker 1: has come from the tech boom. Amazon was founded here 61 00:04:12,880 --> 00:04:17,320 Speaker 1: in Today it's an eight hundred billion dollar company with 62 00:04:17,360 --> 00:04:22,440 Speaker 1: more than five hundred thousand employees worldwide. Microsoft, Expedia, Zillo 63 00:04:22,640 --> 00:04:26,000 Speaker 1: are also based in the area, and Google, Facebook, Uber. 64 00:04:26,160 --> 00:04:28,760 Speaker 1: So many tech companies have opened up large offices in 65 00:04:28,800 --> 00:04:32,040 Speaker 1: Seattle too. I know some people hate it. It feels 66 00:04:32,080 --> 00:04:34,080 Speaker 1: a little more anonymous than it used to, and it 67 00:04:34,160 --> 00:04:36,960 Speaker 1: also um just feels like there are a lot of 68 00:04:37,000 --> 00:04:39,360 Speaker 1: people coming here that only plan to be here for 69 00:04:39,360 --> 00:04:41,560 Speaker 1: a year or two, you know, and that does kind 70 00:04:41,560 --> 00:04:45,120 Speaker 1: of impact the way that your interactions are with people. 71 00:04:49,160 --> 00:04:52,080 Speaker 1: One economist I spoke to said that every new tech 72 00:04:52,160 --> 00:04:55,159 Speaker 1: job creates about four to five new non tech jobs. 73 00:04:55,760 --> 00:04:57,840 Speaker 1: Some of that non tech work is for professionals like 74 00:04:57,920 --> 00:05:00,480 Speaker 1: lawyers and doctors, but the bulk of it is not 75 00:05:00,640 --> 00:05:05,160 Speaker 1: think Uber drivers and plumbers. In boomtowns like Seattle, wages 76 00:05:05,240 --> 00:05:07,880 Speaker 1: generally go up across the board, but cities don't add 77 00:05:08,000 --> 00:05:10,360 Speaker 1: enough housing supply to keep up with the growing demand. 78 00:05:11,000 --> 00:05:14,719 Speaker 1: That makes cities way less affordable. The economist said. Seattle 79 00:05:14,760 --> 00:05:16,960 Speaker 1: is an extreme example of what's happening in other tech 80 00:05:17,000 --> 00:05:20,640 Speaker 1: hubs like the Bay Area and in Austin. Yeah, Karen, 81 00:05:20,680 --> 00:05:23,119 Speaker 1: it really reminds me of the of the same exact 82 00:05:23,200 --> 00:05:26,000 Speaker 1: dynamic that's going on here in San Francisco. You know, 83 00:05:26,080 --> 00:05:29,640 Speaker 1: cities competed so hard to be the home to these 84 00:05:29,640 --> 00:05:33,360 Speaker 1: tech companies, and now they are realizing that there there 85 00:05:33,360 --> 00:05:35,919 Speaker 1: are some drawbacks from having these high growth companies in 86 00:05:35,960 --> 00:05:38,760 Speaker 1: their myths. It's interesting Seattle is actually doing a better 87 00:05:38,839 --> 00:05:41,000 Speaker 1: job than the Bay Area of building new housing, but 88 00:05:41,080 --> 00:05:44,360 Speaker 1: even that isn't keeping up with the growing population here. 89 00:05:44,600 --> 00:05:48,240 Speaker 1: Such an emotional issue for people, you know, and it's 90 00:05:48,240 --> 00:05:51,520 Speaker 1: worth noting that, you know, these are both heavily democratic cities, 91 00:05:51,839 --> 00:05:54,080 Speaker 1: and so you ask most people in Seattle or in 92 00:05:54,120 --> 00:05:57,880 Speaker 1: San Francisco, and they're intellectually in favor of more housing 93 00:05:58,000 --> 00:06:00,800 Speaker 1: or more affordable housing. But then when it comes to 94 00:06:00,839 --> 00:06:05,799 Speaker 1: their neighborhoods, or putting high density apartment buildings with affordable 95 00:06:05,839 --> 00:06:10,000 Speaker 1: housing units below marker rate units in their neighborhoods, or 96 00:06:10,040 --> 00:06:13,160 Speaker 1: even along kind of transport you know, public transportation lines, 97 00:06:13,760 --> 00:06:16,440 Speaker 1: and you know, you get a kind of quiet resistance 98 00:06:16,480 --> 00:06:19,640 Speaker 1: to it. And and even I would say modest things 99 00:06:19,720 --> 00:06:23,760 Speaker 1: like adding a backyard cottage or allowing a single family 100 00:06:23,760 --> 00:06:25,760 Speaker 1: home to be a duplex, not even building, you know, 101 00:06:26,320 --> 00:06:29,960 Speaker 1: low rise, multi family things are very contentious. The city 102 00:06:30,200 --> 00:06:32,560 Speaker 1: in Seattle is currently debating something that would resone just 103 00:06:32,600 --> 00:06:36,039 Speaker 1: six percent of single family neighborhoods to allow that type 104 00:06:36,040 --> 00:06:39,280 Speaker 1: of kind of more basic development, and that I'm sure 105 00:06:39,279 --> 00:06:41,159 Speaker 1: will be very contentious when it actually comes up to 106 00:06:41,160 --> 00:06:46,040 Speaker 1: a vote. When people say that we're becoming San Francisco, 107 00:06:46,080 --> 00:06:48,799 Speaker 1: they're not wrong. I think that is exactly where we're headed. 108 00:06:52,520 --> 00:06:55,920 Speaker 1: Seattle has seen a surge in homelessness. There are so 109 00:06:55,960 --> 00:06:59,559 Speaker 1: many contributing factors. The opioid crisis, a lack of mental 110 00:06:59,560 --> 00:07:02,960 Speaker 1: health re sources, but also rising rent is probably part 111 00:07:02,960 --> 00:07:05,719 Speaker 1: of it. There are as many as four locations in 112 00:07:05,760 --> 00:07:08,640 Speaker 1: the city where people are living in tents or makeshift shelters, 113 00:07:09,040 --> 00:07:10,920 Speaker 1: and at times that has been a source of friction 114 00:07:10,960 --> 00:07:14,560 Speaker 1: with residents. People are torn between having compassion and being 115 00:07:14,600 --> 00:07:17,440 Speaker 1: frustrated with what seems like the city's inability to help. 116 00:07:17,760 --> 00:07:21,040 Speaker 1: Here's Erika again. When you go to other cities, and 117 00:07:21,080 --> 00:07:23,760 Speaker 1: I travel quite a lot, and um, you just don't 118 00:07:23,840 --> 00:07:26,840 Speaker 1: see anything like what's in Seattle. I mean, I was 119 00:07:26,880 --> 00:07:30,320 Speaker 1: in Houston recently, and Houston is a much less expensive city. 120 00:07:30,360 --> 00:07:32,800 Speaker 1: They have very different economic issues than we do. But 121 00:07:32,960 --> 00:07:36,200 Speaker 1: I mean, you just don't see any tents outside, and 122 00:07:36,360 --> 00:07:38,760 Speaker 1: so I think when people are going to other cities 123 00:07:38,800 --> 00:07:42,000 Speaker 1: are comparing Seattle to what Seattle was like even twenty 124 00:07:42,120 --> 00:07:44,720 Speaker 1: or ten years ago. It's shocking and the fact that 125 00:07:44,720 --> 00:07:48,280 Speaker 1: there are tents everywhere is absolutely unacceptable. But Seattle is 126 00:07:48,280 --> 00:07:52,160 Speaker 1: an unusual bind. That's because the Washington State constitution forbids 127 00:07:52,240 --> 00:07:55,200 Speaker 1: income tax. That means the city is unusually dependent on 128 00:07:55,280 --> 00:07:58,680 Speaker 1: property and sales taxes. As a result, people with less 129 00:07:58,720 --> 00:08:01,000 Speaker 1: money spend a bigger share of the income on taxes. 130 00:08:01,520 --> 00:08:03,200 Speaker 1: So the city council came up with the idea of 131 00:08:03,240 --> 00:08:05,880 Speaker 1: a head tax, where businesses making more than twenty million 132 00:08:05,920 --> 00:08:09,680 Speaker 1: dollars in annual revenue would pay up to five per employee. 133 00:08:09,920 --> 00:08:11,720 Speaker 1: The city wants to use the money to build more 134 00:08:11,720 --> 00:08:14,440 Speaker 1: public and low income housing and to boost services for 135 00:08:14,440 --> 00:08:17,280 Speaker 1: the homeless. How does this relate to Amazon. I think 136 00:08:17,280 --> 00:08:21,480 Speaker 1: people see Amazon, rightly or wrongly, as like our golden 137 00:08:21,520 --> 00:08:24,840 Speaker 1: goose kind of our modern Boeing. Amazon would be the 138 00:08:24,880 --> 00:08:27,840 Speaker 1: company most affected by the head tax. Amazon chose to 139 00:08:27,880 --> 00:08:29,640 Speaker 1: grow in the city, not in the suburbs, and it 140 00:08:29,800 --> 00:08:33,359 Speaker 1: just dominates here. The Seattle Times did an amazing analysis 141 00:08:33,440 --> 00:08:36,680 Speaker 1: last year and found that Amazon occupies more office space 142 00:08:36,760 --> 00:08:40,160 Speaker 1: in the city than the next forty employers combined, and 143 00:08:40,200 --> 00:08:43,720 Speaker 1: it's building even more. I think people see Amazon as, 144 00:08:44,080 --> 00:08:47,360 Speaker 1: you know, this economic force that's driving jobs at striving growth, 145 00:08:47,400 --> 00:08:50,920 Speaker 1: that's driving their home prices up, because a lot of 146 00:08:51,040 --> 00:08:53,440 Speaker 1: the kind of split in the city right now is 147 00:08:53,480 --> 00:08:56,400 Speaker 1: between homeowners who are seeing you know, their meet their 148 00:08:56,400 --> 00:08:59,640 Speaker 1: home values go up so and then on the other hand, 149 00:08:59,640 --> 00:09:06,040 Speaker 1: renters who feel like they're being left out. In September, 150 00:09:06,360 --> 00:09:09,600 Speaker 1: Amazon announced plans to build a second headquarters, which kind 151 00:09:09,600 --> 00:09:12,240 Speaker 1: of freaked the city out. Just the whole idea that 152 00:09:12,280 --> 00:09:14,920 Speaker 1: Amazon could decide to move jobs away from Seattle or 153 00:09:14,920 --> 00:09:18,120 Speaker 1: at least grow elsewhere. That might partly explain the shock 154 00:09:18,200 --> 00:09:20,880 Speaker 1: when Amazon announced it was halting construction planning on a 155 00:09:20,920 --> 00:09:23,079 Speaker 1: new office tower until it sees the outcome of the 156 00:09:23,160 --> 00:09:25,960 Speaker 1: vote on the head tax. To the head tax would 157 00:09:26,000 --> 00:09:29,080 Speaker 1: be a new tax on large employers in Seattle to 158 00:09:29,120 --> 00:09:33,040 Speaker 1: help fund wholelessness programs. Amazon does not like it at all, 159 00:09:33,160 --> 00:09:35,960 Speaker 1: so much so that they are halting construction on this 160 00:09:36,160 --> 00:09:39,760 Speaker 1: seventeen story building in downtown Seattle. Let me tell you 161 00:09:39,840 --> 00:09:49,839 Speaker 1: about this head tax. The plan that would applies to Karen. 162 00:09:49,880 --> 00:09:53,360 Speaker 1: The relationship between Amazon and Seattle, it reminds me of 163 00:09:53,400 --> 00:09:57,280 Speaker 1: like a bad romantic relationship. Seattle is having a hard 164 00:09:57,320 --> 00:09:59,400 Speaker 1: time with Amazon, but it doesn't want Amazon to go 165 00:09:59,440 --> 00:10:02,200 Speaker 1: and date any body else. Yes, they're definitely kind of 166 00:10:02,240 --> 00:10:05,400 Speaker 1: codependent in a weird way right now. So Amazon is 167 00:10:05,400 --> 00:10:08,240 Speaker 1: bringing a lot of jobs, a lot of revenue into 168 00:10:08,240 --> 00:10:11,240 Speaker 1: the city, but it's also just creating an obvious burden 169 00:10:11,520 --> 00:10:14,640 Speaker 1: on city services. I mean, it's the head tax a 170 00:10:14,640 --> 00:10:17,200 Speaker 1: good way of addressing that. Yeah, the head tax is 171 00:10:17,280 --> 00:10:20,560 Speaker 1: very interesting because it risks slowing down the job growth 172 00:10:20,600 --> 00:10:22,199 Speaker 1: if you listen to what the company is saying, and 173 00:10:22,280 --> 00:10:25,280 Speaker 1: we may not put as many new jobs here. So 174 00:10:25,320 --> 00:10:27,040 Speaker 1: that's one way to manage the growth is just to 175 00:10:27,240 --> 00:10:30,040 Speaker 1: actually slow it down. And it also tries to solve 176 00:10:30,080 --> 00:10:32,640 Speaker 1: a little bit on the housing supply side because it 177 00:10:32,679 --> 00:10:37,040 Speaker 1: does go to fund new affordable housing, but it doesn't 178 00:10:37,120 --> 00:10:40,160 Speaker 1: touch that huge issue about zoning and where you're gonna 179 00:10:40,200 --> 00:10:42,600 Speaker 1: put new housing, and that is the thing that has 180 00:10:42,679 --> 00:10:47,480 Speaker 1: just really stifled new development in the Bay Area, in 181 00:10:47,600 --> 00:10:51,200 Speaker 1: Seattle and other kind of booming tech cities too. So 182 00:10:51,280 --> 00:10:55,079 Speaker 1: the h Q two search was announced last year, but 183 00:10:55,280 --> 00:10:57,520 Speaker 1: the whole dispute this year on the head tax. It 184 00:10:57,559 --> 00:11:00,360 Speaker 1: just makes me think that Amazon was awfully farcet sited 185 00:11:01,040 --> 00:11:03,800 Speaker 1: uh in trying to find another city. Did they foresee 186 00:11:03,840 --> 00:11:06,560 Speaker 1: all this? Yeah, I mean there's no doubt that the 187 00:11:06,600 --> 00:11:09,960 Speaker 1: pressures on the city have been growing a lot, and 188 00:11:10,040 --> 00:11:12,560 Speaker 1: particularly in the past couple of years. I mean, they 189 00:11:12,800 --> 00:11:15,640 Speaker 1: have to imagine there were own recruiters here trouble about 190 00:11:16,280 --> 00:11:19,000 Speaker 1: concerns about the housing stock here and the and the 191 00:11:19,160 --> 00:11:21,360 Speaker 1: ability even for a high paid engineer to find to 192 00:11:21,400 --> 00:11:24,640 Speaker 1: find something. And they they have said, you know, I 193 00:11:24,679 --> 00:11:26,319 Speaker 1: think the most talent thing I've heard out of them 194 00:11:26,400 --> 00:11:30,160 Speaker 1: is Jeff Wilkie, the executive, at a conference in Seattle 195 00:11:30,280 --> 00:11:33,880 Speaker 1: last fall, said something to the effect of, I love Seattle. 196 00:11:33,960 --> 00:11:36,080 Speaker 1: It's been fabulous for me and my family, but not 197 00:11:36,160 --> 00:11:38,160 Speaker 1: everyone wants to live here, and we are growing at 198 00:11:38,160 --> 00:11:39,680 Speaker 1: a rate where we really need to be able to 199 00:11:39,720 --> 00:11:42,400 Speaker 1: find a place to work for anyone that we can get. 200 00:11:42,920 --> 00:11:47,200 Speaker 1: Not everyone enjoys those rainy winters. So what what should 201 00:11:47,200 --> 00:11:51,400 Speaker 1: Amazon apply in terms of the lessons of its long 202 00:11:51,559 --> 00:11:54,520 Speaker 1: tangled relationship with the city of Seattle. What should it 203 00:11:54,559 --> 00:11:57,800 Speaker 1: apply to the search for another city? To host its 204 00:11:57,800 --> 00:12:01,160 Speaker 1: second headquarters. Amazon was really it for a really long 205 00:12:01,200 --> 00:12:04,280 Speaker 1: time in Seattle, and I suspect probably they have regrets 206 00:12:04,280 --> 00:12:06,600 Speaker 1: about that because they didn't help the city get ahead 207 00:12:06,600 --> 00:12:08,839 Speaker 1: of this problem really, and so when they're talking to 208 00:12:08,920 --> 00:12:11,520 Speaker 1: new places, they're really trying to understand how how is 209 00:12:11,520 --> 00:12:14,640 Speaker 1: this city going to accommodate all of these kind of 210 00:12:14,720 --> 00:12:17,320 Speaker 1: housing needs and the transportation needs, and all of the 211 00:12:17,720 --> 00:12:20,880 Speaker 1: additional burden on the infrastructure that comes with really building 212 00:12:21,280 --> 00:12:25,120 Speaker 1: as we've talked about, not just the headquarters for these employees, 213 00:12:25,120 --> 00:12:28,800 Speaker 1: but then all of the additional auxiliary work rights. And 214 00:12:28,840 --> 00:12:32,280 Speaker 1: cities can also learn from Amazon's experience in Seattle and 215 00:12:32,360 --> 00:12:34,959 Speaker 1: know that if they win HQ two, they're getting a big, 216 00:12:35,000 --> 00:12:37,880 Speaker 1: powerful company. They're getting a lot of jobs, but they're 217 00:12:37,880 --> 00:12:40,160 Speaker 1: also going to be dealing with some political issues that 218 00:12:40,200 --> 00:12:42,880 Speaker 1: are very hard to predict. Yes, I mean, Amazon has 219 00:12:42,920 --> 00:12:45,040 Speaker 1: shown it can play hardball, and so if I were 220 00:12:45,080 --> 00:12:47,240 Speaker 1: a city, I'd be a little nervous at the same time. 221 00:12:48,400 --> 00:12:52,080 Speaker 1: Next up, strong reactions he roughed on all sides. After 222 00:12:52,120 --> 00:12:55,960 Speaker 1: Amazon pauses its expansion plants in Seattle until it knows 223 00:12:56,000 --> 00:13:10,880 Speaker 1: the outcome of the head tax vote. Amazon statement hit 224 00:13:10,920 --> 00:13:15,200 Speaker 1: around midday on May two, Amazon has stopped construction on 225 00:13:15,320 --> 00:13:19,200 Speaker 1: a new office building in Seattle, where its current headquarters are. 226 00:13:19,360 --> 00:13:21,920 Speaker 1: This comes after the city proposed a new tax on 227 00:13:21,960 --> 00:13:25,000 Speaker 1: top business. Since then, things have been moving really fast. 228 00:13:25,280 --> 00:13:28,840 Speaker 1: The tax has become a polarizing issue. The construction workers 229 00:13:28,960 --> 00:13:32,160 Speaker 1: union has come out against it, but services sector unions 230 00:13:32,160 --> 00:13:34,800 Speaker 1: are supporting it. Some residents are happy that the city 231 00:13:34,880 --> 00:13:38,280 Speaker 1: is pushing back on Amazon, which let's remember, is the 232 00:13:38,320 --> 00:13:41,520 Speaker 1: second largest company in the world run by the wealthiest 233 00:13:41,559 --> 00:13:44,480 Speaker 1: man in the world, but other residents don't trust the 234 00:13:44,520 --> 00:13:48,200 Speaker 1: city to spend the new money wisely. Emotions came to 235 00:13:48,240 --> 00:13:51,280 Speaker 1: a head later that night. Hundreds of people packed into 236 00:13:51,320 --> 00:13:53,160 Speaker 1: a Methodist church where what was supposed to be a 237 00:13:53,240 --> 00:13:56,760 Speaker 1: town hall meeting but instead and evolved into just inventing 238 00:13:56,760 --> 00:14:04,360 Speaker 1: a rage m It's refreshing to see ordinary citizens revolting 239 00:14:04,400 --> 00:14:10,839 Speaker 1: against this lousy city council. This clause a religious organization 240 00:14:11,240 --> 00:14:13,400 Speaker 1: that tells us how we're supposed to think, what we're 241 00:14:13,400 --> 00:14:15,319 Speaker 1: supposed to do with our money, what we're supped to 242 00:14:15,320 --> 00:14:19,040 Speaker 1: do with our plastic bags. We cannot be trusted homeowners 243 00:14:19,040 --> 00:14:21,520 Speaker 1: shouto down the council members, saying the money they pay them. 244 00:14:21,560 --> 00:14:25,440 Speaker 1: Property taxes have been spent unwisely. And if you've lived 245 00:14:25,480 --> 00:14:28,520 Speaker 1: here for a few years and you've seen this city 246 00:14:28,560 --> 00:14:34,120 Speaker 1: government take on affordability by bulldozing all the backyards and 247 00:14:34,280 --> 00:14:38,000 Speaker 1: ballard and putting up nine dred thousand dollar condos, you 248 00:14:38,120 --> 00:14:40,760 Speaker 1: might start to think maybe they should just kind of 249 00:14:41,080 --> 00:14:46,240 Speaker 1: deal with water, sewer, garbage, police, fireman, libraries, and parks 250 00:14:46,880 --> 00:14:49,720 Speaker 1: and get out of the rest of this step. Because 251 00:14:49,760 --> 00:14:52,840 Speaker 1: it's you're it's not. But other people told the council 252 00:14:52,880 --> 00:14:56,000 Speaker 1: they couldn't afford taxes to go up even more because 253 00:14:56,040 --> 00:14:58,520 Speaker 1: I know that as a middle class worker in the city, 254 00:14:58,880 --> 00:15:01,200 Speaker 1: I'm a future in the You should be homeless myself, 255 00:15:01,240 --> 00:15:03,600 Speaker 1: because that's the way our city is going. Our middle 256 00:15:03,640 --> 00:15:08,320 Speaker 1: class is not able to afford our houses, our rents 257 00:15:08,520 --> 00:15:10,840 Speaker 1: were not able to afford any of it. All of 258 00:15:10,880 --> 00:15:14,120 Speaker 1: you here wants to live in a in a happy 259 00:15:14,200 --> 00:15:17,360 Speaker 1: life with Erica was there. She saw people struggling with 260 00:15:17,400 --> 00:15:19,680 Speaker 1: how to deal with the city's growth. And I think 261 00:15:19,680 --> 00:15:22,400 Speaker 1: there's a weird sort of brain split where like, we 262 00:15:22,520 --> 00:15:24,520 Speaker 1: like the economic growth and we like the fact that 263 00:15:24,560 --> 00:15:26,880 Speaker 1: home prices are rising, but we don't like the fact 264 00:15:26,920 --> 00:15:29,400 Speaker 1: that those people need places to live. They're living in 265 00:15:29,440 --> 00:15:33,520 Speaker 1: town homes and apartments that you know, or we're maybe 266 00:15:33,520 --> 00:15:36,320 Speaker 1: built where a single family house was bulldozed. A lot 267 00:15:36,320 --> 00:15:39,040 Speaker 1: of residents invented about the way tents and makeshift housing 268 00:15:39,080 --> 00:15:43,160 Speaker 1: was affecting their neighborhoods. They're sick of seeing tents everywhere. 269 00:15:43,400 --> 00:15:46,520 Speaker 1: There is a perception that there are needles everywhere, but 270 00:15:46,600 --> 00:15:49,680 Speaker 1: they're just they're upset about about the issue of homelessness 271 00:15:49,720 --> 00:15:54,520 Speaker 1: and UM the way it's being handled UM Council. I 272 00:15:54,600 --> 00:15:57,840 Speaker 1: recognize that there's a crisis of homelessness in Seattle, and 273 00:15:57,880 --> 00:16:01,560 Speaker 1: I generally support red a new and services to address 274 00:16:01,600 --> 00:16:05,320 Speaker 1: that crisis. But whatever we do, it's going to take time, 275 00:16:06,240 --> 00:16:09,240 Speaker 1: and in the meantime, we're going to continue to have 276 00:16:09,480 --> 00:16:13,200 Speaker 1: encampments all over the city. And the impact that those 277 00:16:13,280 --> 00:16:18,040 Speaker 1: encampments are having on their immediate neighbors is really tangible 278 00:16:18,120 --> 00:16:20,440 Speaker 1: and problematic, and I think it's driving a lot of 279 00:16:20,480 --> 00:16:24,600 Speaker 1: the frustration and hostility and the anger that you see tonight. 280 00:16:25,280 --> 00:16:38,120 Speaker 1: So at times the dialogue totally broke down. I see, Okay, 281 00:16:38,360 --> 00:16:42,880 Speaker 1: So blaming poor people for what's going on is like 282 00:16:42,960 --> 00:16:54,600 Speaker 1: blaming Syrian refugees for Isis. Amazon As isis In any case, 283 00:16:54,680 --> 00:16:57,080 Speaker 1: I wish you would act more like kindergarteners than like 284 00:16:57,200 --> 00:17:12,840 Speaker 1: over entitled rich white people pay. Yeah, you know, I've 285 00:17:12,840 --> 00:17:16,400 Speaker 1: been to about a million of these meetings before, and 286 00:17:16,800 --> 00:17:19,639 Speaker 1: I'm you know, I'm not like a shrinking flower. I 287 00:17:19,680 --> 00:17:23,159 Speaker 1: don't get upset. But it felt I mean, you know, 288 00:17:23,160 --> 00:17:24,560 Speaker 1: people are going to make fun of me for this, 289 00:17:24,680 --> 00:17:27,919 Speaker 1: but it felt scary. Um, it felt like, you know, 290 00:17:28,000 --> 00:17:39,399 Speaker 1: people were going to rush the state. Okay, so today 291 00:17:39,560 --> 00:17:44,320 Speaker 1: is Tuesday. Yesterday, on Monday afternoon, the Seattle City Council 292 00:17:44,400 --> 00:17:48,120 Speaker 1: voted on the controversial head tax. Please call the roll 293 00:17:48,280 --> 00:17:56,920 Speaker 1: on the passage of the amended bill O. Brian Swant, Bagshaw, Gonzalez, 294 00:17:58,000 --> 00:18:05,200 Speaker 1: her Bold, John one waras Mosqueta I President Harold A. 295 00:18:05,720 --> 00:18:09,440 Speaker 1: Nine in favor, none opposed it. Okay, so now we 296 00:18:09,480 --> 00:18:12,840 Speaker 1: have a resolution which basically embodies the spending plans just 297 00:18:12,880 --> 00:18:18,760 Speaker 1: one moment here and so please read that into the record. 298 00:18:18,960 --> 00:18:22,840 Speaker 1: The vote came after a weekend of frantic negotiations. Basically, 299 00:18:22,880 --> 00:18:25,920 Speaker 1: the mayor said she might veto of five per head 300 00:18:25,920 --> 00:18:28,520 Speaker 1: tax if the council passed it. So after all this 301 00:18:28,600 --> 00:18:31,000 Speaker 1: back and forth, they got it down to two seventy 302 00:18:31,040 --> 00:18:34,399 Speaker 1: five dollars per employee, and then the city council passed 303 00:18:34,400 --> 00:18:38,280 Speaker 1: it nine to zero. Right, So for now the standoff 304 00:18:38,400 --> 00:18:42,080 Speaker 1: is over what lesson to other cities like Mountain View, 305 00:18:42,119 --> 00:18:44,960 Speaker 1: which was weighing a similar Google tax. What do they 306 00:18:45,000 --> 00:18:48,480 Speaker 1: take from this episode? It's interesting. I mean I think 307 00:18:48,920 --> 00:18:52,080 Speaker 1: clearly you learn it's hugely divisive and a risky thing 308 00:18:52,160 --> 00:18:54,600 Speaker 1: to do, and it's hard to know now you know, 309 00:18:54,720 --> 00:18:56,920 Speaker 1: how it will affect growth in the city. Will people 310 00:18:56,920 --> 00:19:00,560 Speaker 1: pull back or is there already enough good job and 311 00:19:00,560 --> 00:19:02,440 Speaker 1: and enough of a cluster of tech work here that 312 00:19:02,520 --> 00:19:07,360 Speaker 1: people Amazon and others will continuing hiring here. Everybody's wondering 313 00:19:07,400 --> 00:19:10,919 Speaker 1: how this impacts the search for h Q two, and 314 00:19:10,920 --> 00:19:13,919 Speaker 1: I don't know. Some of the candidate cities sent letters 315 00:19:13,960 --> 00:19:18,160 Speaker 1: to Seattle encouraging the council to resist the pressure from Amazon. 316 00:19:18,640 --> 00:19:22,840 Speaker 1: What does this impact the HQ two search? Yeah, I mean, 317 00:19:22,960 --> 00:19:26,040 Speaker 1: if I were a city, I think that this shows 318 00:19:26,480 --> 00:19:28,560 Speaker 1: shows two things. It shows that a city can put 319 00:19:28,680 --> 00:19:32,359 Speaker 1: some onus on Amazon, or cities have can have the 320 00:19:32,359 --> 00:19:34,720 Speaker 1: political will to do that. But it also shows that 321 00:19:34,760 --> 00:19:37,600 Speaker 1: Amazon plays hardball, and that's it's a reality. I had 322 00:19:37,600 --> 00:19:39,679 Speaker 1: a guest in town this weekend from Germany, and this 323 00:19:39,760 --> 00:19:41,439 Speaker 1: made the news in Germany. So I think it's not 324 00:19:41,480 --> 00:19:44,159 Speaker 1: even just HQ two, but it's all their global expansion plans. 325 00:19:44,200 --> 00:19:46,560 Speaker 1: People are watching this, watching to see what they'll do 326 00:19:46,600 --> 00:19:48,919 Speaker 1: and how to play out. So now Seattle has a 327 00:19:48,960 --> 00:19:52,879 Speaker 1: two seventy five dollar per employee head tax. Does it 328 00:19:53,080 --> 00:19:56,879 Speaker 1: solve Seattle's problems? And when you talk about the congestion 329 00:19:56,960 --> 00:20:00,800 Speaker 1: in the city, the ever increasing price of housing, what 330 00:20:00,880 --> 00:20:03,760 Speaker 1: does this do? Yeah, so this is I think one 331 00:20:03,800 --> 00:20:07,280 Speaker 1: thing that definitely will help is this does build more housing, 332 00:20:07,480 --> 00:20:09,800 Speaker 1: specifically affordable housing. And there was a lot of back 333 00:20:09,840 --> 00:20:13,439 Speaker 1: and forth over how much should go to services versus construction, 334 00:20:13,880 --> 00:20:16,440 Speaker 1: and the end about two thirds of the new revenue 335 00:20:16,440 --> 00:20:19,520 Speaker 1: will go to building new units. But we're talking fewer 336 00:20:19,560 --> 00:20:21,720 Speaker 1: than a thousand units, and I believe that the current 337 00:20:21,760 --> 00:20:24,919 Speaker 1: affordable housing gap is something like fourteen thousand units in 338 00:20:24,920 --> 00:20:28,879 Speaker 1: the county. So it's it's a improvement, but not a 339 00:20:29,000 --> 00:20:31,960 Speaker 1: huge one. And is it possible that this head tax 340 00:20:32,280 --> 00:20:36,639 Speaker 1: slows down Seattle growth? That that is the big question. 341 00:20:36,680 --> 00:20:39,800 Speaker 1: Will it slow down this kind of crazy increase in 342 00:20:40,080 --> 00:20:42,320 Speaker 1: in jobs and high paying jobs that are coming here. 343 00:20:42,800 --> 00:20:44,640 Speaker 1: And I spoke with one of the council members who 344 00:20:44,640 --> 00:20:47,520 Speaker 1: co sponsored the legislation, Michae O'Brien. I spoke with him 345 00:20:47,600 --> 00:20:49,960 Speaker 1: last week and he said, you know, I don't think 346 00:20:50,000 --> 00:20:51,760 Speaker 1: it's going to slow down the growth here. I think 347 00:20:51,760 --> 00:20:54,560 Speaker 1: we've got enough momentum here that will keep Amazon on 348 00:20:54,640 --> 00:20:57,160 Speaker 1: others continuing to come. But if it does slow down 349 00:20:57,240 --> 00:20:59,880 Speaker 1: the growth, maybe that's okay. Maybe that's what we need 350 00:21:00,000 --> 00:21:09,119 Speaker 1: to catch your breath a little bit. And that's it 351 00:21:09,200 --> 00:21:12,720 Speaker 1: for this week's episode of Decrypted. Thanks for listening. Do 352 00:21:12,760 --> 00:21:14,960 Speaker 1: the issues we talked about today apply to the city 353 00:21:15,000 --> 00:21:16,840 Speaker 1: you live in? We want to know how the growth 354 00:21:16,880 --> 00:21:19,639 Speaker 1: of the tech industry has affected you. Send us an email. 355 00:21:20,000 --> 00:21:23,080 Speaker 1: Our address is Decrypted at Bloomberg dot net or I'm 356 00:21:23,080 --> 00:21:26,720 Speaker 1: on Twitter at pay wy Wise and I'm at brad Stowe. 357 00:21:27,080 --> 00:21:29,399 Speaker 1: If you enjoy the show, please spread the word with 358 00:21:29,440 --> 00:21:32,719 Speaker 1: your friends and consider leaving us a rating and a review. 359 00:21:33,040 --> 00:21:36,320 Speaker 1: It really helps us find new listeners. This episode was 360 00:21:36,359 --> 00:21:40,440 Speaker 1: produced by Pia Gattari and tofor Foreheads. Francesca Leave is 361 00:21:40,480 --> 00:21:42,840 Speaker 1: the head of Bloomberg Podcast. We'll see you next week.