New To Town 2015
We don't know much about Seattle's tech newcomers beyond three basic facts: They're here, they're reshaping the city in ways we didn't exactly prepare for, and they're going to keep coming.
I'm not talking about the hundreds of Iraqi refugees Sydney has written about here, or the thousands of international students who are changing the face of our city's colleges. I'm talking about the ones everybody seems obsessed with—the tens of thousands of mysterious tech workers we're busy speculating about, including who they are, how many there are, where they came from, how much money they're collectively making (and spending), how many more are on the way, and what kind of effect they're going to have on the rest of us.
If there was one person I hoped could shed some data-rich light on the new white-collar tsunami, it was the city's official demographer, Diana Canzoneri. "Those are all questions we'd also like the answers to," she said. "Sorry I can't be more help."
But we can certainly see the newcomers' impact: Shiny new apartment buildings are springing up around Seattle to receive them—starting at their epicenter in South Lake Union and radiating outward into Belltown, downtown, Capitol Hill, and Ballard—as well as the bars and cafes and doggy-day-care businesses to serve them. You already know what else is springing up around the city as a consequence: rents. Real-estate analysts from both Zumper and the Urban Land Institute ranked Seattle as the eighth most expensive city for renting in 2014. US Census data put us at the 10th most expensive city, but says our median rent jumped by almost 11 percent between 2010 and 2013—the highest of any major city in the country. Other analysts, like the research firm Reis, Inc., say our rent increases aren't quite as dramatic as San Francisco's, but are still roughly double the national average.
A few months ago, local economist Matthew Gardner analyzed recent Amazon real-estate purchases and estimated they would bring between 10,000 and 20,000 new workers to the city. That was in May. But in late fall, the company submitted plans for additional towers in South Lake Union, sending analysts back to their calculators. "You could argue that 10,000 is likely conservative," Gardner said a few weeks ago. "Ultimately, they might actually have 40,000 people here."
Scott Bailey, a regional economist for the Washington Employment Security Department, ran some numbers and found that in 2013 there were 112,127 full-time jobs in the tech industry in King County. Twenty-one percent of those jobs—23,547—were held by people with no work history in the state between 2007 and 2010. That means 23,547 newcomers who, Bailey said, have "extremely well-paid jobs." Nearly half of the total tech employees were paid more than $60 an hour, though only 37 percent of the newcomers fell into that category. Percentage-wise, the newcomers tended to fall in the $20 to $60 an hour range. (The state median wage for all jobs is $22 per hour.) "But all in all," he said, "very well paid."
Amazon spokesperson Teal Pennebaker says the company currently employs "around 20,000 people in Seattle," 15 percent of whom live in the same zip code as Amazon's headquarters and 20 percent of whom walk to work. If Gardner's estimates are correct, we're only halfway to Amazon's high-water mark—and the full effects of the economic immigration.
Not bad for a company that still barely turns a profit.
And for every job Amazon adds, Gardner says, 2.9 other jobs are created in the local economy. "Economically speaking," he said, "growth is good and can be good as long as it is responsible growth." You're probably sick of hearing about affordable housing and transportation, but Gardner argues—along with just about every other observer in the city—that it's the single biggest issue determining whether Seattle will succeed or fail to manage this surge. If people can move around quickly, the economic effect of the new money will be diffused around the city instead of concentrating price-of-living spikes in a few neighborhoods (and displacing the people who can't afford them). And, unlike Denver or Houston, we can't just build more roads when ours get clogged. Our geography won't allow it. We have to think cleverly and strategically about how to get people around the city. But so far, Seattle—this national hotbed of innovation—has failed.
"Mobility," Gardner said, "is the crucial situation because it drives or hinders affordability." For the record, Gardner is on retainer for the business-minded lobbyists of the Downtown Seattle Association and says the incentives the city has given developers to build affordable housing haven't worked. (He also opposes the linkage fees championed by city council member Mike O'Brien as a self-defeating tax, arguing that they will discourage development, thereby reducing supply, thereby making that supply more expensive.) "We wanted growth and we didn't address the needs for growth," he said. "Now we're saying to Mr. Developer, 'We have a big problem and you're going to pay for it.'"
Transportation, he says, is the key—which puts the burden on the city, instead of developers, to solve the problem. In the meantime, some developers get to profit off the problem. The conditions that concentrate cost-of-living spikes in a few predictable neighborhoods (such as lack of transportation) make investment in those neighborhoods a safer bet—for those with enough capital to get in the game. Diffusion of those cost-of-living spikes into many different neighborhoods would make investment in a given property a more unpredictable bet, since increased mobility would introduce more flux into the market.
To put it another way: A crisis for some is an opportunity for others.
But who are these people flooding into the city? "On an aggregated basis, nobody knows," Gardner said. "They really are a black box." A few journalists have mounted anthropological, pith-helmeted expeditions into their ranks without revealing much beyond the bland and anecdotal. In a January 18 story by Fred Moody in the Seattle Times, he discovered that the newcomers have book clubs, are interested in social-justice issues, and maybe—taken as individuals—aren't all that bad.
I'm not promising to do any better. For my part, it was tough to find Amazon workers who'd go on the record at all. An acquaintance of almost 20 years who works at Amazon said he asked around on my behalf but was told that talking to the press was against "company policy" and got scolded by a coworker for trying to help me out. "It's like a cult up in here," another Amazon acquaintance said about its apparent omertà. (I asked Pennebaker, the Amazon spokesperson, if "company policy" did, in fact, prohibit employees from talking to the press. She gave me a vague sort of answer—then quickly added that we were off the record and that part of the conversation was not to be quoted. I took that as a yes. For that reason, I'm not including any employees' last names in this story.)
But the few who live in the shiny new buildings—even their bricks look shiny—and were willing to talk said the buildings are lavish, as if competing in some kind of amenities arms race: rooftop barbecues, whole fleets of suites for TV parties and 20-person dinners, arcades, fitness centers that make your average hotel gym look like a broom closet, bamboo floors, big windows, dog runs, and regular social events with free food and booze to help all these newcomers get to know each other. One new 380-unit development planned for Westlake Avenue will include a private bowling alley. (The development company, Holland Partner Group, was one of several developers, property managers, and architects who declined to comment for this story.)
The newcomers' rents keep going up, too. Fifteen months ago, a Microsoft employee named Ian moved to Seattle and into the 206—a "luxury" apartment building in Belltown—but wound up switching to a First Hill condo to save money.
"Rents are out of control," he said. "Like DC rents." After utilities, he was paying close to $1,650 for an apartment that was less than 600 square feet.
Web designer Darren, who lives at the Lyric on Capitol Hill, says leases there see a "dramatic increase" every time they're renewed. But he loves his building, largely because of its like-minded community. Part of his rent goes into a social fund that pays for monthly get-togethers, gift-wrapping parties at Christmastime (staff will wrap your presents while you drink), and outings to Mariners games in a limo. "It's like being back in college with dorm activities," he said, "but obviously on a different scale. It's a very nice building. Everything is held up to a certain standard."
Darren says most of his—and his partner's—friends live in the building, and that "mainly everyone works for Amazon or Microsoft." Which might also explain why the newcomers seem so mysterious: If your neighbors are your coworkers, you're all new to town, and your employers and apartment buildings engineer social events as an amenity, it stands to reason that your chances of getting fully integrated into your new city decrease unless you put some work into it.
Nora, who is from Seattle and started working for Amazon straight out of college a few months ago, sees that phenomenon in her building, which is called AVA Ballard. She says the building "does not have much going for it in terms of diversity. They're mostly young, wealthy white people. Mostly young couples without kids." And she says her workplace is overwhelmingly masculine. (According to US Census data collected between 2011 and 2013, our local "computing, engineering, and science" labor force was 78.6 percent male.)
"That socioeconomic filter does make a lot of people more comfortable, being with other people who are like them," she said. "Not to say that anybody here would be scared if there was a black person, but there's a certain feel to it. A certain atmosphere." She says she felt "a lot of guilt" about moving into the building, especially after reading about new reduced fares for buses. "I remember seeing the salary cutoff and thinking, 'That's what I'm going to pay in rent every year.' It's amazing. But I guess I justified it by saying if there's one thing I want to splurge on, it's where I live."
Ian, the Microsoft employee, says he's gotten to know lots of locals but that he's atypical among his newcomer colleagues. "I'm a little bit of a chimera, personally," he said. "My hobbies are connected to animal stuff—I'm the volunteer steward of the Belltown dog park—plus writing and slam poetry, so I have social circles outside that white-collar group. But my friends from my graduating class at Wharton [at the University of Pennsylvania] just hang out with their classmates and people from work." (Pennebaker, the Amazon spokesperson, emphasized that the company's employees "volunteer at organizations across the city and volunteer on boards in the community.")
Ian also says locals share some of the blame for the lack of social cross-pollination. "A lot of my friends feel like they can't make friends," he said. "The 'Seattle Freeze'—it seems like it kind of exists. Here's a great example: I grew up on the East Coast. If you introduce yourself and say, 'Hi, I'm Ian,' it would be very rude not to respond, 'Hi, I'm Brendan.' But in Seattle, people don't think twice about saying, 'Hi, nice to meet you,' and then terminating the conversation. And I'm not even talking about a stranger—but, like, a friend of a friend. They'll sit down two seats over at the bar, they'll shake your hand, and they won't tell you their name. That means people aren't integrating."
Ian and his friends are trying to do their part with an informal organization they call Here to Play, which organizes events—weekends in cabins, trips to Portland—and encourages everyone they invite to invite a ton of other people. The result is dozens of strangers, locals and newcomers, getting to know each other.
But he says he feels a tension between locals and newcomers—and that economic displacement probably has something to do with it, as rents go up and scruffy neighborhood dives get sold and swanked up. "I guess if you can't afford a $12 cocktail, it's hard to interact with people who can," he said. "I would actually like to know how many options there are to drink a $2 beer. I'm not trying to pour money down a funnel!"
Gardner predicts that rents in the city will continue to increase as more Amazon employees—and the employees of ancillary businesses—continue to show up, but the recent frenzy in building might mean that we'll have enough housing supply to reduce how steeply they're going to increase. (These predictions are always dicey, of course. A Seattle Times article from mid-2012 quoted a variety of local housing analysts who said things like: "It's unlikely that the rental market will be able to sustain its current momentum through the end of next year.")
But, he says, Seattle will definitely continue its chaotic overhaul while the city tries to figure out how to make the most of—and minimize the harm of—the cyclone of money that continues to swirl and grow out of South Lake Union. "I'm just wide-eyed at the development that Amazon as a single entity is creating," he said. "Its presence is very dramatic—as it already is, but it will be even more so. And with growth—exponential growth, especially if it's not responsible—one will naturally suffer teething pains because of it."