This holiday season has 238 communities across North America eagerly awaiting a huge present: Amazon’s HQ2!
If you believe the Wall Street Journal and other leading sources, DFW should be one of the top picks for Amazon’s 50,000 employees earning an average salary in excess of $100,000 sweepstakes. And, why not? DFW rates highly within most of Amazon’s requirements such as an educated workforce, top notch universities, and a world-class airport. However, while many of the 238 communities tout the cost of housing for those 50,000 employees, Dallas has a very distinct advantage since it has the ability to absorb that in-migration. We’ve been there and done it.
For the past seven years, DFW has added just shy of 700,000 jobs. As a general rule of thumb, new home starts typically occur at a 2 to 1 ratio, which would equate to 350,000 new home starts over that same period of time or approximately 50,000 per year. DFW just recently crept over the 30,000 new annual home starts rate and is closer to 170,000 new total home starts over that same period. We are obviously a little behind on the new housing front, but we can quickly catch up and keep pace with the influx of new Texans.
Amazon is the big prize, however DFW continues to be a prime location for more traditional corporate relocations. Toyota, Liberty Mutual, State Farm, and many other proved that we are ready for the numbers and can absorb the housing need.
Amazon’s targeted workforce is heavily millennials and generation Z’s with a taste for urban living and there continues to be a workforce that prefers the suburban life. So how do we provide that housing in such diverse and big numbers?
Master planned communities are the best option. Our area has seen success with communities such as Stonebridge Ranch in McKinney and Stonebriar in Frisco, because both created the necessary large-scale supply. Although the time to develop lots and build homes is taking longer than anticipated due to labor supply from the recession and fierce competition among the other sectors, the larger the development, the better. Large-scale and master-planned communities can commit to skilled and unskilled labor work forces for a longer period of time. The highly sought-after construction worker has a guaranteed job for several years as the community builds and grows.
Additionally, master-planned communities allow large tracts of land to develop at one time because the developer of the community purchases the land in its entirety, which enables them to sell multiple lots to multiple builders who, in turn, offer multiple price points, satisfying a larger end consumer population. Master-planned communities provide an abundance of amenities that are highly sought after by discriminating buyers such as staffed amenity centers, on-site restaurants, luxury resort style pools, and multiple play areas for kids and pets, to name a few. Small subdivisions in DFW have been the norm, but with more corporate relocations and thousands of new starts, we need to think big.
Though it may seem like a daunting task to welcome more than 50,000 Amazon employees to Dallas-Fort Worth, we have done it before and done it well. Toyota and State Farm proved that we can absorb housing and we are ready for the numbers. That’s a critical factor that Amazon must consider and one that DFW outpaces 237 other communities.
Brian Cramer is Senior Vice President of Newland Communities.
