What Dallas needs? ‘Grease, not infrastructure,’ young grads say

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Second of two columns.

When Stephanie Johanson graduated from college and left the East Coast, she planned to live in Dallas briefly and then head to an ad agency in New York City. That was seven years ago.

The 29-year-old brand manager now raves about Uptown, her M-Street neighborhood and running at White Rock Lake. She’s most impressed by how Dallas keeps investing in emerging areas, such as Trinity Groves and the Bishop Arts District.

And she’s skeptical about a recent report that young college grads were snubbing the region.

“It’s almost like I don’t believe the data,” said Johanson, who works at the Richards Group, a top advertising agency.

The report by an economist at City Observatory in Portland, Ore., found that the Dallas-Fort Worth area lagged most metros in drawing young college grads. The Dallas area is usually a leader in job creation and other metrics. But from 2000 to 2012, other metros had much stronger growth of the so-called young and restless — 25- to 34-year-olds with college degrees.

Johanson has friends who moved here from California, Arizona and other states. Her New York friends also give Dallas high marks. Because the city is so affordable, she said, you can get more of the urban life that millennials prefer.

“In Dallas, it’s much easier for young 20-somethings to live where it’s happening — around all these fun, walkable places,” Johanson said. “You can get to a Sunday brunch in about five minutes.”

Recent progress has been remarkable around the downtown area. Office buildings, apartments, restaurants and bars keep popping up. Mass transit is getting better. Klyde Warren Park and the Katy Trail are great natural amenities.

Still, Dallas doesn’t have the cool factor of Austin, Denver, Portland, Seattle and even Los Angeles. Part of that stems from outdated perceptions, and part of it’s real.

“What’s missing is cultural,” said Clarisa Lindenmeyer of Tech Wildcatters, a company that helps startup businesses. “It’s not the infrastructure, it’s the grease.”

She’s talking about the need for more connections and collaboration, formal and informal. That would keep stoking a startup culture and maybe redefine the city’s image.

D-FW is best known for its Fortune 500 companies. Investors also are traditional types, backing energy and real estate more than new technology. That reinforces a view of Dallas as a corporate bastion, more conservative than forward-leaning.

As with light rail and downtown living, Dallas has made real progress with startups. Venture funding has grown, some companies have been hits, and Tech Wildcatters has many competitors now trying to accelerate new ventures.

The Dallas Entrepreneur Center, known as the DEC, said that 5,000 people participated in events and programs in its first year. Fifty startups rented space downtown. There’s an investor summit this week, and it’s touting the fact that visitors don’t have to rent a car.

They can take DART rail from the airport to downtown and walk to the opening party and their hotel. Other events are nearby, too.

“Whether the last time you were in Dallas was two months ago or 10 years ago, you will be visiting a new Dallas,” Trey Bowles, the DEC’s co-founder, is telling angel investors.

He wants them to see a city that’s walkable, active and safe, and a hub for startups. That’s all part of the mix that draws young talent, and Dallas has it.

“People are so surprised about Dallas,” said Bowles, who built companies in other cities and chose to settle here. “The challenge is to get them to experience it.”

He said some local startups declined venture funds that required them to leave the city. Several startups recently finished an accelerator program and decided to stay in Dallas or open offices here. A 2012 study on fast-growing companies showed that Dallas was a leader in attracting founders, an indication that the city wins over people.

Johanson’s path is a common one. She came to Dallas to join a particular company. Among other things, the Richards Group doesn’t assign titles, so employees won’t feel limited or boxed in. She planned to stay two years and isn’t looking back now.

Javier Moreno, 31, had lived and worked around New York City after going to college at Penn State. He moved here almost three months ago as part of Toyota’s relocation of its North American headquarters.

Moreno lives in a new Uptown apartment building, and he has a great view of people walking along McKinney Avenue.

“I didn’t expect to find so much energy and diversity,” said Moreno, manager of external affairs and communication. “This is really a vibrant place.”

He has a 30-minute drive to Toyota in Plano, and it’s usually a smooth commute. He’d like to take DART rail when there’s a faster connection from the rail stop to the western edge of Plano.

But he’s happy and sounds like many young grads who come here: Dallas is better than they realized.

It just needs to keep improving.

Follow Mitchell Schnurman on Twitter at @mitchschnurman.

 

This post was written by Mitchell Schnurman and shared with permission from The Dallas Morning News.

Economist predicts Dallas-Fort Worth economies will grow faster than U.S. through 2019

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Texas economist Ray Perryman is forecasting stronger economic growth for the Dallas-Fort Worth area and the state — faster than U.S. growth — over the next five years thanks largely to the energy boom and big corporate relocations.

He told a group today at the Dallas Regional Chamber’s annual Economic Outlook Summit in Dallas that the Texas economy will grow at a 4.3 percent compounded annual rate through 2019. He expects the Dallas-Fort Worth area to grow even faster in that time frame — 4.4 percent.

Much of Texas’ growth — and national growth — has been related to energy. The state has tripled its oil product since 2010 to more than 3 million barrels of oil, said Perryman, head of The Perryman Group in Waco. Low crude oil prices may dampen oil exploration, but pumping will continue and longer term, demand will only increase for oil as emerging countries increase their consumption, he said.

The Dallas-Fort Worth economy is doing well across many segments, such as technology, health care and corporate relocations.

Newcomers to the area are driving the demand for housing.

Texas has led the nation’s housing recovery, especially in Houston and D-FW, David Brown, a regional director of Metrostudy in Dallas, said at the summit.

A short supply of houses in the area — less than three months — is driving up prices. The Dallas area has 10 percent fewer homes listed for sale today than a year ago, Brown said. D-FW prices rose about 12 percent last year and are on pace to be up 7 percent to 8 percent this year, which is still double historical appreciation rates, he said.

“We’re going to continue to see a very competitive housing market” as big companies such as Toyota move operations and people here, Brown said. “The challenges we face now are all on the supply side, and despite rising prices our housing remains extremely attractive for people moving here from somewhere else.”

About half of all housing demand is for apartments, Brown said. And even though D-FW apartment construction is booming, he doesn’t think the market is becoming overbuilt. Last year, 15,222 apartment units were absorbed into the market.

The national economy

After a “very, very difficult recovery,” the nation is now seeing consistent job and economic growth, Perryman said. He forecast U.S. gross domestic product growth of about 3.4 percent a year through 2019.

“We feel pretty good about the U.S. economy,” but there are some risks, such as the nation’s monetary policy, Perryman said. The Federal Reserve is walking “a tight rope” on when to start raising interest rates, which have been near zero since 2008, he said.

“If they raise rates too fast, it could hurt us and if they raise rates too slow, it could hurt us,” Perryman said. “If they do it right, we could have a pretty good recovery here; if not, we could have some issues.”

Scott Nyquist, a director at McKinsey & Co., said many of the consulting firm’s clients are frustrated about the global economy in the short term as slower growth is expected in Europe and China, but are optimistic about the longer term potential.

“It’s hard to be anything but excited about Dallas,” which has a youthful population and the nation’s third biggest high-tech hub, Nyquist said at the summit.

A study by the McKinsey Global Institute found that the Dallas area is well positioned in four drivers of the national economy over the next decade: energy, big data, infrastructure improvements and trade.

As the national economy improves and job opportunities improve in other places, the Dallas area must focus on quality of life and environmental issues, Nyquist said. Also, the area’s share of residents with a bachelor’s degree and STEM (science, technology, engineering and math) degrees is lower than the national average, he said.

Still, McKinsey expects the D-FW area’s economy to grow 50 percent faster than the U.S. economy over the next 20 years.

 

This post was written by Sheryl Jean and shared with permission from The Dallas Morning News.