This story was originally published in Builder.

Images of Amazon's campus in Seattle, Washington, in both the downtown and South Lake Union neighborhoods. Photographed from the roof of Amazon's Port 99 building. (JORDAN STEAD / Amazon)
(Jordan Stead / Amazon) Amazon's urban campus in Seattle, Wash.


You can't live without them. Increasingly, it seems, however, a deal is not just a deal.

The experience economy--and all that that fuzzy term means--has changed all that. What used to be a transaction, plain and simple, is no longer, ever, just that. In the experience economy people want a relationship, not a deal.

There's an important take-away here for home builders, and here's how.

One of yesterday's two blockbuster news stories involved word that Amazon has withdrawn plans to make New York City neighborhood Long Island City the home of one of two new headquarters campuses (the other in Arlington, VA).

Now, on the surface of this--from real estate investors' standpoint, and from the perspective of many home bigger home builders who're likely to benefit from the sudden pivot, given the fact that Long Island City's pain will be 17 other cities' gain when it comes to expansion of housing options and demand.

But that's not the only lesson; nor do we think it's the most important one.

Local political activists, unhappy with the corporate favoritism terms and neighborhood-altering-impacts of the new Amazon mega office complex had kicked up resistance to the plan from the moment it was announced. In the end they prevailed. Amazon, felt what it rarely feels, unwanted.

It doesn't like to feel that way. It's statement read:

“For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term... A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.”


A deal specifies terms, deliverables, minimum acceptable value in exchange for minimum agreed-upon value. Typically, a deal is a change of money for goods or services rendered, a handshake, some measure of assurance that the value purchased has been secured by the buyer, and that's it.

Relationships are different. They're about frameworks that go beyond a snapshot in-time trade of this for that. They're about solid platforms and commitments on each participant's part to work to make the partnership better, more adaptive, and more resilient over time rather than strained, and checklist-based.

What does this remind you of?

Terms of the value exchange between New York political and business development officials and Amazon were pegged at enormously high-stakes levels. Now, after the abrupt 180-degree turn, Amazon will continue to add to its "only" 5,000 people in its New York City-based facilities and activities, and disperse about 25,000 or or so others across 17 "tech-hubs," where it already has a presence. New York Times writer J. David Goodman writes:

Amazon will grow across its tech hubs, which include large outposts in cities like Boston, Austin, Tex., and Vancouver, British Columbia, as well as smaller ones in Pittsburgh and Detroit. It will lose the value it has said it finds in having employees in a centralized corporate campus, but will maintain flexibility to grow where and when it wants.

Even in New York, where Amazon already has 5,000 workers, about half at a distribution center on Staten Island, the company still plans to add more jobs, particularly in advertising, fashion and web services.

Three timely issues jump out here, and I'm sure they're not lost on many of the people in our BUILDER audience.

One is trust. Rather, perhaps, what happens when there's a lack of it, as in "distrust" or "mistrust."

It is tempting to write off the company’s misadventure in the Big Apple as an isolated instance, due in part to the sharp rise of anticorporate politics in one particular area. But that would be an error. The simple fact is that Big Tech’s public image has taken a beating nationally, due in part to a growing understanding that the industry’s prominence and influence in the everyday lives of so many of the world’s citizens hasn’t always been a net positive.

That doesn’t mean every other community will oppose Amazon and its peers with the same sort of ardor. It does mean that local leaders will have to take a closer look at the sort of treats they offer to an industry that can easily afford to pay its own way. Amazon, Apple , Microsoft , Facebook and Google parent Alphabet Inc. have more than half a trillion dollars in cash between them and a demonstrated propensity to spend it.

The second--closely related issue--and one that touches a raw nerve for residential builders and developers, has to do with the interaction of for-profit firms and local policy makers and officials, and their constituents. Whether it's tech or any other business sector--as real estate developers are so well aware of--cities, towns, and their voters and community activists have tended to become increasingly polarized. This, in part, has to do with the first issue of trust and the lack of transparency private sector organizations have done their part to support as they pursued the interests of direct stakeholders. But also, younger, less well-to-do, less risk-averse activists are looking to undo longstanding practices and legacy behaviors, especially if they trace in any way to harming people or the planet.

Thing is, residential developers, builders, apartment community makers have been dealing with towns, cities, and regions--and their perception that the real estate business community is a vague, menacing monster--for decades. You, with your experience, and your ability to navigate the "camel through the eye of a needle" issues it sometimes takes to win community and local official support, can serve as an example to other corporate players looking to do the same. You're the experts.

The third point--and the one perhaps closest to home for builders--is that somewhere lost in the dizzying ups and disastrous downs of housing's cycles in the past two decade has emerged a fundamentally new impetus in the new home buyer's journey.

They want a relationship. They want an experience that speaks to a framework that makes sure each side in a transaction can get value along a continuum, not just for one freighted instant where the keys get handed over.

Unconsciously, or explicitly or not, most of your customers are not looking for a deal when they look for a new home. They're looking for the great experience of a lifetime. And there's no-one more suited to engaging with them in that value proposition than you are.

This story was originally published in Builder.