Amazon

(Photos courtesy Flickr)

As word got out that Amazon may pull out of its’ planned halfquarters in New York, every single city that had a shot is discussing the potential that the virtual big box store will eventually turn its sights to one of the jilted — Dallas included.

Let’s review: In November, after nearly a year of being courted by nearly every city in the country, Amazon flipped the script and decided to divide its second headquarters site between two cities – Long Island City, New York, and Crystal City, Virginia.

But nearly immediately, many New Yorkers began voicing their resistance to the idea, saying they worried that Amazon would push up prices and rents in the neighborhood, and force existing residents out. They also criticized the incentives offered to the retail giant.

As resistance grew, The Washington Post reported Friday that Amazon was potentially thinking of walking back its plans for the New York site. (more…)

By Phil Crone
Executive Officer, Dallas Builders Association

 

 

Unlike prior years, 2019 will not be full steam ahead for our area’s housing market. The predicted return to normalcy after a run of several frenzied years will be hard to characterize with a broad brush (though many will try). While more nuanced and complicated than before, there will be no shortage of opportunities and no reason why we cannot continue to be the envy of the nation.

Looking ahead, here are four things to watch in the year to come and why they matter:

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This morning, Bloomberg News is reporting that anonymous insiders are saying Amazon is close to finalizing its selection for its second headquarters (which are set to be officially announced by the end of the year). The winners of the pay-for-play beauty contest are reportedly Crystal City, Virginia, outside Washington, D.C., and in the New York City borough of Queens on Long Island. Obviously, Amazon remains mum on the deal.

This latest news comes via three separate reports.  The Wall Street Journal reported Amazon was splitting its “gift” in two. The New York Times who outed Long Island City as one of the “winners” while the Washington Post identified Crystal City. The splitting of this baby is seen as Amazon’s attempt to mitigate backlash from what many see as the problems Amazon will bring for a city’s existing residents – “a problem shared is a problem halved” and all that.

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Gig Economy

I adore Joel Kotkin and agree with most everything he writes. In fact, I have written for him, and wish I had time to do more.

By the way, don’t ever let anyone tell you that blogging is fast and easy. It’s not. All writing sucks up an inordinate amount of time. When I visited Joel in California, his wife told me he is always, always at the computer writing. Pretty much the same here now.

Like most of us, I have been struggling to make real estate sense of the crazy reality show our White House has become, balancing that with the extreme weirdness — and intensity — of the coming elections. There are many examples, but Texas governor! A former Dallas County Sheriff who didn’t pay her property taxes on time (“better to offer low rent than pay taxes on time, she says“) is running against a staunch conservative incumbent governor. The Ted Cruz vs. Beto O’Rourke race is just war, and in these two, as many races across the U.S., you could not find more polar opposite candidates.

Middle-of-the-road, centrist politics was buried with John McCain, it seems.

Where will this take our country and what will it do to the housing market, already whiplashed from the new tax law?

Will the new tax law, which limits the mortgage deduction to $750,000 worth of debt and limits your property tax deduction to $10,000 (about a $700,000 home in Dallas) force more to sell their homes and become renters? Dallas is only second to New York City in apartment starts, and 2017 brought in 30,000 units with more than 50,000 under construction. (Dallas rents are actually now beginning to recede.) I am seeing some stunning luxury apartments the likes of which we have never had, that I would move into in a New York minute (stay tuned). Then I see luxury listings lowering prices to sell, while the under $500,000 market remains on steroids. What gives? Where are we going with all this?

Oligarchal socialism, says Joel. It allows “for the current, ever-growing concentration of wealth and power in a few hands — notably tech and financial moguls — while seeking ways to ameliorate the reality of growing poverty, slowing social mobility and indebtedness. This will be achieved not by breaking up or targeting the oligarchs, which they would fight to the bitter end, but through the massive increase in state taxpayer support.”

Bingo.

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Silicon Valley corporations like Facebook and Google are reviving the notion of a “company town.” For decades, Silicon Valley has been single-minded in a pursuit of wealth via technology. The minting of tech millionaires has driven real estate out of reach for many not caught in the thrall of stock options and IPOs. Constructing housing in this environment seems a way to add capacity that benefits all. But there’s a likely far darker outcome.

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Photo courtesy of TOMMASO BODDI/AFP/Getty Images

Tate Lecture Series ticket holders get the first shot to buy tickets to hear Jeff, but I wonder if this has any connection to the news that the Wall Street Journal thinks Amazon is headed our way for sure for sure. I mean, Jeff Bezos could be coming here to just check out Whole Foods Market, as well as speak. Or, he could be checking the educational opportunities our city has to offer because we have SMU and the Bush Center right in our midst. Education, you recall, was one of the most important factors in Amazon’s search for a new headquarters: the company needs a lot of young, sharp brains, to supply tech talent to keep Amazon growing. The company plans to add 50,000 employees wherever it lands, over a 10 to 15 year time period. Those employees would be software developers and business minds. Hmmmm. 

Jump for the news on the Bezos/SMU partnership, and how you may purchase tickets — see you there!
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Is Dallas likely to get Amazon’s HQ2?

Right when you think that we’ve talked it absolutely to death, the Wall Street Journal had to go and breathe life into the corpse of the Amazon HQ2 story. But wait! Do all of these fancy pie charts mean what we think they mean? Is Dallas proper about to get the crown after finding ourselves at first runner up too many times?

According to the numbers (I’m not great at math, so I’m going to trust them a bit here), the big draw for Big D is all business — available labor, low taxes, and relatively affordable cost of living (for now, at least). Big points for meeting Amazon half way with college population and cultural fit (Dallas County is blue, y’all). But when it comes to fiscal health, we got low marks.

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What would it take to get Amazon to locate it’s HQ2 here in Dallas? Jon Anderson says you don’t want to know, and we shouldn’t be so sure we want the e-retailer here anyway.

And according to new stats from ApartmentList, if Seattle’s fallout from HQ1 is any indication, Dallas and Austin renters should expect a bump in cost of living should Amazon HQ2 land in these major Texas metro areas.

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