Houston Strategies

Job seekers heading to Texas

I wanted to blog on this Fort Worth Star-Telegram Sunday business feature before my trip, but ran out of time. The journalist interviewed me for the story and I have a couple of quotes. It's a long article with a lot of good stuff, so let's get right to the excerpts (highlights mine).

From the Midwest to the Pacific, job seekers are heading to Texas

'If you had to ride out this downturn, there is no better place than Texas. The declines here have been nothing compared to other states.’
...

Even in the midst of a recession, economists, demographers and relocation experts believe the Lone Star State is on the cusp of becoming The New California.

Or maybe it already is.

For people seeking economic opportunity, Texas is becoming what California has been since the Great Depression, says Los Angeles urbanist and author Joel Kotkin. Texas recently "ran the table" in a recent list of "Best Cities for Jobs" prepared by Kotkin for New Geography and Forbes. Austin, Houston, San Antonio, Fort Worth and Dallas were ranked as the top five large metro areas in the country to find a job. If that weren’t enough to get the moving van loaded, McAllen and Odessa top the mid-sized and small city categories, respectively. Among 333 metropolitan areas, Texas has a remarkable 20 in the top 100.

Relocation surveys show that Texas remains a top destination for people leaving other states. Its automobile registrations continue to climb, and the Texas housing market has avoided the double-digit declines other fast-growing states have seen. While the unemployment rate has risen in Texas, it’s nowhere near as high as most of the country, underscoring the state’s economic resiliency even as the downturn deals out its lumps.

Kotkin, a professor at Chapman University in Orange, Calif., who analyzed U.S. Labor Department statistics for his report, says Texas’ dominance at the top of the jobs list is unprecedented.

"Part of it is a function of the economic collapse of Florida, Phoenix and California. The collapse is still important in Texas, but Texas has had more balanced growth and that’s more sustainable," he said in a telephone interview while navigating an L.A. freeway.

"Part is the nature of Texas: People don’t move there for climate and scenery," Kotkin said. "They move to Texas for jobs and affordable housing. People make economic decisions to go to these places. They don’t go for perfect weather where you can surf one day and ski the next."

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As the economy has soured, many people are moving to Texas for a new start.

In 2008 and the first quarter of 2009, 14.3 percent of the people leaving the once Golden State were bound for the Lone Star State, according to Relocation.com, which tracks moving trends. Other states with sizable outflows to Texas included Florida (7.9 percent), Illinois (4.7), Michigan (4.6) and New York (4.3).

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Tory Gattis, who runs a software company and writes Houston Strategies, an urban issues blog, is convinced that Texas will be the "focal point" of the nation’s next historic migration trend. (referencing this post)

"During the Dust Bowl, during the Great Depression, California was the place to go. Texas is the place to go now," Gattis said. "Sure, we are clearly losing some jobs but people are still moving here. I can see it anecdotally in the license plates around town. I see a lot of Michigan plates, California license plates, I see them from all over."

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"Why do people move? Generally, jobs," Gaines said. "Right now, Texas will probably be the only state in the Union that reports more jobs than the year before — by a total of close to 154,000 [in 2008]."Those numbers will be reduced this year. But if you are an entrepreneur or want to start a business, this is the best place to do it because of the pro-business attitude of the state."

Eventually, when distressed housing markets across the country stabilize, Gaines predicts that skittish homeowners will be weighing their options. In those places, "as soon as you can finally sell, you’re going to get the hell out of Dodge," Gaines said.

Jason Saving, a senior economist at the Federal Reserve Bank of Dallas, also believes that Texas has some "fundamental advantages" that are spurring growth, even in a recession.

First is a "very favorable business climate," and second is affordable real estate.

"These things make the state attractive to businesses and residents alike," Saving said. "I think that’s why, if you look at the migration data within the U.S., that you see so many people moving from other states to Texas."

Gattis says Texas’ cost of living is a key to its attractiveness.

"It’s not everything," he said, "but when you have more discretionary income you can buy a better house, a better car, you can spend it at restaurants. That’s income that leads to a better quality of life. "

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"The real estate market here is stronger and more affordable," Mather said as movers were unloading the couple’s belongings. "You can buy a comparable house here for close to half the price what you can get on the West Coast."

Kotkin, the L.A. author, says Texas is benefitting by being in what he calls "the zone of sanity," a swath of the nation’s midsection where housing prices stayed stable.

The twin lures of jobs and affordable housing are important to young professionals planning to raise a family or start a business, he said.

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Texas’ business climate of low taxes and a low regulatory burden draws companies and workers, Saving said.

"There is something inherently entrepreneurial about Texas. It’s the nature of the state from its formation, Texas was built by people who were looking to better themselves, and that has continued ever since," he said.

Kotkin says tight business regulation is hurting California. But not Texas. "Whether you are GOP or Democrat, you can’t imagine Texas becoming anti-business," he said.

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The U.S. Census Bureau recently reported that because of the recession, Americans are moving at some of the lowest rates in 50 years.

But Saving, the Fed economist, believes people "will vote with their feet" and keep heading to Texas.

"Moving is costly, and it’s a hassle. It’s not something people want to do unless they see a better opportunity  . . . and looking long-term, I think it’s clear that Texas is a favorable place to be from an economic point of view."

Best cities for jobs

Texas dominated New Geography and Forbes’ annual list of best big cities for jobs in 2009.

1. Austin-Round Rock

2. Houston-Sugar Land-Baytown

3. San Antonio

4. Fort Worth-Arlington

5. Dallas-Plano-Irving

By the numbers

14.34: Of people leaving California in 2008 and the first quarter of 2009, the percentage that moved to Texas

$2,141: U-Haul rental from Los Angeles to Fort Worth

$557: U-Haul rental from Fort Worth to Los Angeles

17,962,300: Motor vehicles registered in Texas in 2000

21,185,173: Motor vehicles registered in Texas in 2008

Labels: affordability, demographics, economy, growth, home affordability, identity, opportunity urbanism

posted by Tory Gattis @ 5:17 PM