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Seattle entrepreneur, investor, and activist Nick Hanauer. (GeekWire Photo / Kevin Lisota)

Nick Hanauer was the first outside investor in Amazon and he has watched the company transform its hometown, Seattle, over the past decade. The venture capitalist and activist has witnessed rising housing costs associated with the tech boom push thousands of people into homelessness and housing insecurity.

“If you turn $500 apartments into $2,500 apartments, none of the people who are at the bottom of the spectrum can afford to live anymore,” Hanauer said, speaking at The Playbook, a new GeekWire event in Seattle presented by Lane Powell. “It’s pretty simple math.”

Related: Lessons in tech, business, sports and life from Adrian and Nick Hanauer

Hanauer offered advice to the city that Amazon selects for HQ2, a $5 billion second headquarters that will house up to 50,000 employees in another North American city.

“It’s awesome that Amazon’s here and we also need to find a way to take care of the people who have been left behind,” he said. “So if I was [the] HQ2 city, I’d want to be sure that I had mechanisms in place to ensure that the growth and the benefits were not overwhelmed by the social problems created by that inevitable growth.”

In particular, Hanauer warned the city to prepare for rising housing costs. Although Amazon isn’t the sole driver of Seattle’s population surge and growing income inequality, it is the poster child for the region’s boom. Seattle has had the nation’s hottest housing market for 20 months straight and it is the fastest growing city in the country.

Seattle cranes
Seattle has more construction cranes in operation than any city in the country. (GeekWire Photo / Kurt Schlosser)

“If you double the price of housing in a place, that’s going to create a problem,” Hanauer said. “It just is going to create a problem. So how do you deal with that? You’d love to have that figured out before you doubled the price of the housing, not after, which is what we’re dealing with.”

There are 20 cities competing for Amazon HQ2, each eager to bring the company and the economic vitality it promises to their community. Amazon plans to announce the winning city by the end of 2018.

Hanauer shared his advice for Amazon HQ2 at GeekWire’s new speaker series, The Playbook. He discussed a wide range of topics with his brother, Adrian Hanauer, who owns the majority of the Seattle Sounders.

Nick and Adrian Hanauer. (GeekWire Photo / Kevin Lisota)

Nick Hanauer is known for his candor and controversial opinions — and the golden ticket he bought with his investment doesn’t shield Amazon from his signature brashness.

“Jeff Bezos is, for sure, the smartest person I’ve ever worked directly with,” Hanauer said. “He is a remarkable entrepreneur. I wouldn’t say I’m a great fan of his moral reasoning, but he’s an extraordinary commercial entrepreneur and just a deeply insightful and strategic thinker … I have definitely pivoted hard away from admiration for people who just make a lot of money and towards people who make the world a better place. And so the way in which I process who I respect and admire has changed dramatically over the last 10 years.”

Hanauer has been building and financing tech companies in the Seattle area for decades, but in recent years he has been devoting most of his time to civic endeavors, like raising the minimum wage, enacting stricter gun control laws, and reducing income inequality. At the event Wednesday, he said that his interest in civic affairs is not entirely altruistic.

“What you learn when you go into the civic space is that business problems are simple problems,” he said. “They’re engineering problems. They’re relatively narrowly defined. The metrics are clear, the constraints are obvious. In the civic world, the problems are infinitely more complex. I just find it more interesting … and I find it just enormously satisfying.”

Hanauer also said some of his motivation is “straight up ego and ambition.”

“It is fun to drive social change,” he said. “It’s like winning a soccer game. You piss a lot of people off, but it is deeply satisfying.”

Despite his progressive politics, Hanauer still describes himself as a “hardcore capitalist” and acknowledges that being home to Amazon is an undeniable economic boon.

“I believe in entrepreneurship and I’m super happy to have lots of companies here that are building great products and hiring lots of people,” he said. Hanauer added, “you just have to be grown up enough to acknowledge that there will be a downside in a city if you bring a whole bunch of people to it very, very quickly and make a few people wealthy while leaving a bunch of other people behind.”

You can watch the entire interview here:

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