Houston Strategies

Post-pandemic housing reality, charter amendment, alt-cities to CA-NYC, housing boom, and more

 A crazy week with a *ton* of new items I'll only be able to partially get through in this post, including some followups to last week's post about California tech companies moving to Texas:

• WSJ: Texas’ Tax Advantage Is All About Individuals, Not Business Taxes
• City Journal: Flight of the Icons - Anti-business policies are driving flagship firms out of California.
• Texas Monthly: Welcome to Texas, Elon Musk. You Don’t Have to Move to Austin - The founder of Tesla and SpaceX says he’s relocating to the Lone Star State. But which of our tech hubs is the best fit for the eccentric billionaire? Surprisingly balanced (even slightly negative) on Austin and very positive on Houston. Excerpt:

• The alt-cities: Why Tech, Finance, and Music chose Austin, Miami, and Nashville. Map plus a couple of excerpts:

"Affordable suburban living

From the 1980s to the mid-1990s, cities suffered from high crime rates and numerous quality of life issues. New York City, San Francisco, Los Angeles, and some other major cities have recreated the environment of that era, with non-scientific pandemic restrictions that devastated local businesses and a penchant for placing the mentally ill directly in family-oriented, residential neighborhoods. These cities have stopped prosecuting many property and quality of life crimes, inevitably leading to bad quality of life and apathetic enforcement of more serious crimes.

The coronavirus has reset consumer expectations back to suburban living with the mental health benefits of living in greenspace. There has been an exodus from major industry centers to their suburbs and to the alt-cities. The alt-cities of Miami, Austin, and Nashville all offer car-friendly, suburban living, relatively cheap housing, and continual housing construction. With the acceleration of sustainable building materials and clean and cheap energy, the urban planning rationale to pack people into urban cores with mass transportation was already beginning to fray, and the coronavirus has sealed its fate.

...

Low taxes and quality government

People are not moving solely for tax purposes. New York and California’s tax rates are only a few points higher than they were twenty years ago. However, once people decide to move, of course tax rate is a factor in choosing a destination. Florida, Texas, and Tennessee seemingly offer everything that California and New York offer: highways, streets, schools, police departments, fire departments, and such. All the government services one would expect are there, and none of the capital gains taxes that entrepreneurs and venture capitalists typically pay.

As comedian and political commentator Bill Maher recently noted, California is reminiscent of a 1970s Italy, with high taxes and terrible government services. In return for high taxes, one would expect to go to Hunter's Point, East Palo Alto, or East San Jose and see excellent schools and services for disadvantaged people. A hyperloop instead of a failed high-speed train. Fire mitigation and stable power to complement long term climate change goals. A boom in middle-class housing rather than a $700K median house price. California and New York are becoming bad versions of Singapore, with a wealthy technocratic elite, an immigrant servant class, and a collapsed middle class."

Labels: affordability, aviation, companies, economic strategy, economy, governance, headquarters, home affordability, migration, pandemic, quality of place, tech

posted by Tory Gattis @ 6:06 PM