Amazon.com Inc. logos are arranged for a photograph in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Amazon's 3 Washington Finalists Are Not the Same

(Bloomberg View) -- Now that Amazon.com Inc. has released its list of 20 finalists for its second headquarters, there is lots of talk about the Washington area, as the District of Columbia; Northern Virginia; and Montgomery County, Maryland, all made the cut. Speaking as someone who has lived in Fairfax County, Virginia, almost 30 years running, we shouldn’t treat those three locations as the same. If Amazon does opt for this region, its particular choice will reflect some important truths about the future of the country.

Let’s say Amazon chooses Montgomery County, perhaps somewhere in Silver Spring or the former White Flint Mall location in Rockville. Both of those places are a quick Metro ride into Washington and are well served by public transit. Amazon could tell prospective employees that they could live in the “cool” parts of the District and still have a reasonable work commute. The older and perhaps wealthier employees could live in Bethesda or Potomac and enjoy very good public schools for their children.

Still, the millennials would be getting their way. It would be a sign that major companies, especially those with highly educated workers, see the need to offer their employees more than a purely suburban existence. In the longer run, that favors locales such as Hoboken, New Jersey, and the immediate suburbs of Boston and Philadelphia. It’s also a sign that the sprawl of the Sun Belt will face upper limits in terms of attracting technology companies.

If Amazon chooses Northern Virginia, such as Fairfax County or Loudoun County out by Washington Dulles International Airport, that’s a sign that the suburbs really are enough, and that affordable housing and good school systems are paramount. Consider that a victory for parents. On the map those locations may not look much farther out from Washington than Montgomery County, but gauged by the feasibility of the commute, the choices are worlds apart.

I think it less likely that Amazon opts for the District of Columbia proper. For one thing, the District doesn’t have enough good public schools. Many Amazon employees would choose to live in and commute from the suburbs, so then why not just locate there? Refusing D.C. would be a sign that many of America’s damaged cities won’t undergo enough gentrification to attract major businesses.

President Donald Trump may be another reason Amazon won’t locate in the District. The federal government is a major player in much of what happens in the District. D.C. cannot easily offer Amazon moving, tax and infrastructure benefits without some kind of federal budgetary sign-off, if only implicitly. Does Amazon founder Jeff Bezos really want his big plans to depend on the whims of a somewhat unpredictable and sometimes hostile chief executive? Putting Amazon into either Maryland or Virginia is a statement that future policy change in America is going to come at the state rather than federal level, a pretty good bet.

In any of these Washington area locations, Amazon is taking an implicit stance on the nature of talent and education. It’s well known that the D.C. area has high education levels, including in science and technology fields. At the same time, it has not bred a lot of rapidly scaling, dynamic startups comparable to, say, Silicon Valley or Austin, Texas. The work ethic and competition here are strong, but the orientation is too much toward the government as customer and arbiter. If Amazon settles in or near Washington, the company is betting that educated human beings are flexible and can reorient their priorities and ethos to a changing business environment. If there is any argument against Amazon picking the D.C. area, it’s this one.

Overall, I think Montgomery County is the most likely choice out of all the Amazon finalists, and that reflects the power of millennials and their desire for urban living. I would not rule out a slightly unorthodox alternative: an Amazon headquarters straddling Maryland and Virginia, noting that Amazon Web Services already has a significant presence in Northern Virginia.

Why plumb for both locations? Well, combined with Washington state, that would give the company six U.S. senators fighting for its interests, at a time when tech companies are coming under increasing fire. That decision too would be a statement of where our republic is headed, with just about everything being politicized.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tyler Cowen is a Bloomberg View columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include “The Complacent Class: The Self-Defeating Quest for the American Dream.”

  1. To be clear, my conflicts of interest in this decision are huge. Amazon’s choice could affect the value of my home, the future and fiscal future of my university, my daily commute, the politics of my state, and just about every feature of my daily life.

To contact the author of this story: Tyler Cowen at tcowen2@bloomberg.net.

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