THE BIG PICTURE
TECH CORRIDORS
of that engineering position.
to own or rent a single-family residence to call their own. Furthermore, remember all those jobs that aerospace engineer’s job created? Many of those new employees will end up either “upgrading” from a multi- family rental residence to a single-family rental or to homeownership, and a number of them will also likely move into the area from elsewhere, attracted by the growing jobs market. In every case, those individ- uals will need places to live, and many will want a traditional setting in which to raise their families. REAL ESTATE APPRECIATION Real estate tends to appreciate when three things happen: the job market grows, local population enlarges and public planning and policy result in community expansion. This is particularly noticeable if a community is attempting a high-tech corridor, which, by definition, extends along a physical stretch of land that usually has been undeveloped prior to the planned corridor. In these cases, a real estate investor with a little bit of patience who is willing to read the “fine print” on commu- nity planning and department of trans- portation files can often spot areas where currently vacant and undeveloped land could soon be worth a great deal either to new employers hoping to build on the high-tech corridor or to the state or city as they install the infrastructure necessary to bring those businesses into the area. While just about every town, city and metropolitan area in the country purports to be “high-tech central” these days, some of these developments have certainly fared better than others. For example, fewer than 10 years ago, Cin- cinnati, Ohio’s Over The Rhine (OTR) neighborhood was struggling as the city implemented “emergency demolitions” and politician after politician made promises and then wasted time and fed- eral funds rather than actually improv- ing the area. Today, however, the OTR development is a model of a successful high-tech transition: It boasts a streetcar
for easy access, and the area has plenty of fully leased residential and commercial space. Property values that have skyrock- eted since the mid-2000s. Austin, Texas, has accomplished similarly impressive feats on a much, much larger scale. The hometown of Dell has managed to ex- pand tech-related employment by more than 40 percent since 2001 and attract a number of West Coast giants like IBM, Hewlett-Packard and Intel. Austin not only attracts the big players in the tech game, but startups as well, to create a dynamic tech community. No state taxes, relatively affordable housing, fantastic municipal support from the local Cham- ber of Commerce and a thriving base of creative local talent serve to keep Austin at the forefront of the tech conversation. Finally, the Phoenix-Tucson Corridor, which is expected to completely fill in the space between Phoenix and Tucson, Ari- zona, within the next 10 to 15 years, stands not only as a successful and still-expand- ing high-tech corridor, but also as a great example of what reading state department of transportation documents in conjunc- tion with local foreclosure trends can tell you about the future of an area. Several years ago, the Arizona Department of Transportation (ADOT) released extensive documentation about how transit options ranging from buses to heavy rail could be extended into a number of small towns off I-10, the highway that now serves as the backbone of the corridor. Shortly thereaf- ter, lenders began foreclosing on delin- quent properties in the area at an accelerat- ed pace, which is usually an indication that they believe positive movement is pending in an area. Now, the corridor is thriving
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INFRASTRUCTURE THAT IS A MAGNET FOR FEDERAL FUNDING AND PR-FRIENDLY High-tech developments need high-tech methods of access, meaning, in most cases, light rail and rapid transit options. To put it bluntly, the federal government (and most state legislatures as well) are very “friendly” to transit-related projects, especially when those projects involve light rail (trams or trolleys that travel along tracks installed on existing roadways) or heavy rail (subways or other trains that can carry high volumes of passengers and have their own dedicated tracks). Because these transit options are environmentally friendly, enable users to avoid driving to work and tend to support community growth in areas where cars are less affordable and accessible, federal and state governments often have dedicated subsidies for these types of projects. Thus, a high-tech hub of any sort is a good magnet for forgivable loans or grants for developers or the city supporting the project. NEW DEVELOPMENTS IN AFFORDABLE HOUSING One of the most notable hallmarks of a high-tech development tends to be associat- ed mixed-use development that is intended to house, entertain and otherwise cater to high-tech employees who wish to live close to their place of work. With more and more Millennials entering this business sector, walkable mixed-use developments that offer residential options, dining, entertainment, child care and retail space are becoming an inherent addition to any high-tech develop- ment. Mixed-use housing tends to be more affordable than traditional single-family residences and, as a result, is more accessible to homeowners. EXPANSION OF BOTH THE RENTAL AND RESIDENTIAL MARKETS While trendy mixed-use developments will attract a number of residents, there will also be high-tech employees who wish
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> Continued on :: PG 110
Aaron Halderman Founder, Notetools.com Co-author, Paper Proots
Kent Davis Founder, Equistream Co-author, Paper Proots
Garland Davis Vice President Equistream
Carole VanSickle Ellis serves as vice president of research and analysis at the Self-Directed Investor Society, helping investors “declare independence from Wall Street.” Contact her at editor@bryanellis.com or visit selfdirected.org.
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16 | think realty magazine may :: june 2017
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