Written by | Charlie Westbrook
Have you been to Northern Virginia or Washington, DC lately? Have you been there on a Friday afternoon after 3:00 and tried to get anywhere around town? Heaven forbid if it was raining! Do you know anyone who is trying to rent a decent apartment or buy a reasonable house? Traffic and unaffordability is stressful.
In this digital age, people have the world at their fingertips. They don’t have to live in the largest cities to get access to that big experience anymore. That has been a boon for Seattle, Austin, and Nashville – and look how they have grown.
It’s also been good for tertiary cities on the move to secondary status like Charlotte, Kansas City, and Richmond. These places admittedly don’t have it “all,” but they do have an expanding job base, affordable apartments/houses, universities, something extra like a river running through it, and a great food scene.
The Internet allows people to live, work, and play in places with a high quality of life. We love it, and so does the all-important demographic group close to real estate developers and corporate America’s hearts: the millennials who would rather be located in a vibrant and fun location than in a stressful and overly expensive environment where only the ‘Masters of the Universe’ thrive.
I recently attended a ULI event where the CEO of CoStar presented his company’s case to the commercial real estate and banking contingencies as to why they chose Richmond as the destination in which to move their research division – a decision that was initially estimated to add 730 new jobs to the City. Competing against the likes of Kansas City, Charlotte, and DC (their headquarter location), CoStar chose to invest in Richmond because of the size of our workforce, the degree of the City’s educated population, and its proximity and convenience of travel to and from its DC headquarters (rather than have to fly, they purchased a fleet of self driving, autonomous Teslas to travel to and fro!).
As Tom mentioned in his last blog post, recent data shows that the City of Richmond’s population increased by 3,542 people last year for a 2016 population estimate of 233,170. By raw numbers, Richmond had the biggest population gain of any city in Virginia and the third biggest gain of any locality in Virginia behind only Loudon and Prince William counties. We must be doing something right!
CoStar CEO Andy Florance said that his priority is to attract the best and brightest to his company. In doing so, he offers a typical starting salary of $60,000. Understanding how expensive a place like DC is, CoStar did a purchase power comparison analysis between DC and Richmond; we came away with a 2.5+ gain in disposable income for his employees over those in DC. On top of that, we have much better apartment and suburban housing options for individuals and families. Our suburban schools are sound choices with good outcomes compared to those in DC. We have a significantly easier commute. We have an interesting and fun Downtown location with vibrant foodie, recreation, and art scenes. Like DC, we are also on the eastern seaboard, with the added benefit of proximity to the beach and to the mountains. And with airport travel options continually growing, we are competitive with any city in the east regarding top tier destinations.
They say in Austin, “Keep Austin Funky.” To the movers and shakers of the City of Richmond, I say let developers continue to help this great city unfold. Keep the Tax Abatement and the Historic Tax Credit programs alive and working to incentivize developers to continue to produce hip and cool places for the young and old to live, work, and play. Apply the Tax Credit program to new ground-up development in order to house this growing employee and tax base that will continue to enrich and deepen our City’s attractiveness.
Innovation and pioneering will continue to be the efforts that provide the largest ROI to the City. Great things are happening here and will continue to happen as long as we believe that we are the stewards of our own prosperity. Continue to allow our great inherent attributes like our history, job growth, the River, and the soul of the City to attract new residents. In doing so, we will continue to be the beneficiaries of the “So, why Richmond?” question. And by the way, CoStar now estimates that those original 730 jobs are likely to be closer to 1,500.