When Amazon pulled out of its deal on Thursday to construct half of its new headquarters in New York, the move was celebrated by the city’s resurgent left. For months, left-wing activists and politicians in the chosen borough of Queens had protested Amazon’s decision, which they argued would result in a rise in living and housing costs, and strain an already overburdened infrastructure.
Other U.S. cities may still hope to land the Amazon deal, but in tech hubs around the world, the months-long animosity of Queens residents was probably shared. Tech companies bring in small armies of workers but these are rarely recruited from the neighborhoods in question and the new arrivals drive up prices for locals. There is also often opposition to the companies on ideological grounds or simply the fact that a global corporation is taking over key parts of beloved neighborhoods. While city leaders may love the new additions, residents don’t. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
Not anticipating the resistance, a number of U.S. companies have been forced to abandon expansion plans in some of the world’s most popular cities in recent months or are under growing pressure to do so, including in Berlin, Melbourne and Dublin.
After two years of fierce protests, Google accepted defeat in Berlin in October and abandoned its plans to open a start-up incubator in the district of Kreuzberg, known as a haven for artists and underground culture. Google had underestimated the persistence of left-wing groups opposed to the company for ideological reasons and local anger over rising property prices, which jumped 71 percent in the district between 2016 and 2017 alone. Across Berlin, property prices rose more than 20 percent, making the German capital the city with the world’s fastest-growing living costs, according to Knight Fox consultancy.
Although global tech giants cannot be blamed for this rise in Berlin, local anger has in many cases been mostly directed against these high profile companies (in fact, the increase may in part be the result of the rise of local start-ups, widely considered a good thing economically, and an increase in tourists using Airbnb and other platforms).
To some, the anger has appeared disproportionate and unjustified. Pro-business groups in Berlin immediately cited Google’s withdrawal as a warning that residents’ animosity toward U.S. tech companies was preventing the emergence of a top start-up industry. Berlin has indeed struggled to sustain early start-up successes in recent years and lags behind London or U.S. hubs. Berlin is one of the world’s only capital cities that brings its respective country’s GDP down rather than up, and long claimed the official slogan: “Poor but sexy.”
But Berliners’ reluctance to allow large corporations take over their most highly valued districts struck a chord in other places where space is becoming tighter, even as interest among investors is reaching record highs.
The same underlying sentiment led to protests in Melbourne in the fall, when hundreds took to the streets to rally against plans by Apple to set up one of six flagship stores in the city’s storied Federation Square.
“This space is an incredibly Melbourne space,” Tania Davidge, the president of a local activist group was quoted as saying in October. Her group, Citizens for Melbourne, had collected 100,000 signatures of residents urging the city to reverse its approval of the plans. In Melbourne, anger at Apple’s plans was driven more by a general feeling of uneasiness over a corporation’s partial claim on a key cultural hub of the city — and less by concerns over living costs as a direct result of the company’s expansion.
Apple still plans to open the store next year, but its opponents signaled they would not back down. A crowdfunding campaign is now hoping to secure enough funds to buy a building set to be torn down on the store’s future site.
The same month Australians were taking to the streets in Melbourne last year, protesters in Dublin were urging their government to provide more affordable housing in the city. As the Irish capital has become a hub for foreign tech companies, including Facebook and Google, living costs in the city have surged, as well. Dublin flats are now far more expensive than they were before the 2008 financial crisis.
In Dublin, the city’s growing housing crisis has not only added pressure on Irish politicians to expand affordable housing initiatives but also on large corporations with Dublin headquarters to do their part.
“Given that so many of these deep-pocketed companies come here with generous state inducements, perhaps it is time such beneficial arrangements include innovative, city-enhancing infrastructure projects or thoughtful public-private partnerships,” the Irish Times’s Karlin Lillington argued two years ago.
Since then, however, the crisis has only grown — and many private companies have dodged what critics view as their responsibility. Protesters briefly occupied Airbnb’s Dublin offices last October to protest what they say is a business model that has worsened the city’s housing crisis, even as the site insists it has only had a marginal impact.
Amid the ongoing blame game, the start-ups that helped power Dublin’s rise are being squeezed out of the city as they struggle to find workers who can afford living there. And Dublin residents without lucrative tech contracts have looked on as their city has steadily climbed in the global cost of living rankings, recently even surpassing London, according to the Economist magazine.
What’s being considered a success story to economists doesn’t feel like one to a growing number of people living and working there — and they are making their voices heard.
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