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Houston ranks really low on list of cities competing for Amazon HQ, says study

The nationwide bidding war for Amazon's second headquarters has Houston leaders pitching the city as a diverse and dynamic marketplace, one with big industrial players and an emerging tech sector – the perfect place to plant seeds for new technological breakthroughs.

But a new report says Houston would rank low on Amazon's wish list. The city came in at No. 52 among the major U.S. metro areas vying for the Seattle tech giant's $5 billion campus, according to an analysis by economics research firm Moody's Analytics, which examined the various things Amazon wants in a new hometown.

Houston is just one in the scores of U.S. cities cobbling together rival proposals to lure Amazon's 50,000 new employees and a sprawling 8-million-square-foot development. On the list of places Amazon should go, Austin ranked No. 1, with its rapid job growth, crop of technology companies and the promise of cushy Texas incentive packages. Dallas was No. 37.

But Houston ranked low in two key areas that Amazon wants – transportation and quality of life. Census data compiled by Moody's Analytics showed only 2 percent of the local population takes public transportation to work. Only 1 percent walk to work.

Compare that to Philadelphia, where almost a quarter of the workforce uses the mass transit system, and 7 percent walk.

"Amazon doesn't want to build a place with 50,000 parking spots in it," said Adam Ozimek, a senior economist at Moody's Analytics. "That, possibly more than anything else, is going to rule out Houston. Amazon looks at how people get to work. It's a big ask."

The firm also found Houston has fewer entertainment, recreation and restaurant options per capita than other metros like San Francisco and Denver.

Still, Houston ranked high in diversity. With its 62-percent minority population, and 22-percent foreign born population, it came in at No. 12 in that category. Miami, the most diverse city on the list, has an 85-percent minority population, with 51 percent foreign-born, census data show.

"We know that one of the biggest strengths of Houston is its diversity," said Laura Murrillo, president and CEO of the Houston Hispanic Chamber of Commerce.

A few years ago, when Houston leaders began courting Super Bowl organizers, one big feather in the city's cap was its young minority population. The city has some 90,000 Hispanic-owned businesses, and 70 percent of the Hispanic community is between the ages of 18 and 44, Murrillo said.

"We'll be able to promote it again as a progressive city," Murrillo said.

But it may not be enough. In terms of the city's business environment, one reason Houston fell behind Austin was because its five-year job growth rate slowed during the oil bust. Houston came in at No. 29 in the Moody's Analytics business-environment category, while Austin took the top spot.

And, pound for pound, Austin has more skilled workers with bachelor's degrees in things like computer science. Houston, meanwhile, has a larger industrial workforce and a highly concentrated energy sector.

"I don't think Amazon is going to see too much of one industry," Ozimek said. "But there's not enough of the industry that matters – technology."

As published by the Houston Chronicle