Next week marks the annual National Small Business week that is run by the U.S. Small Business Association. Kicking off May 5th – 11th, the event that has been recognized for more than 50 years will highlight the impact being made to the country’s economy by today’s small business owners, entrepreneurs and other key professionals across all 50 states. Set to be stationed out of Washington D.C. this year, there will be a series of sessions, speakers and award ceremonies that honor those in the SMB community helping to create change.
The organizations in this network are defined as those businesses with 500 or less employees and can span from companies that support local markets, national and even global industries. Regardless of their size, the Small Business Association reports that nearly half of all Americans work for small businesses, a critical component and major contributor to the strength of our nation’s economy. Whether through local, owner operated businesses to those supporting the flow of goods and services across the country and world, there are over 30 million small businesses across the U.S. alone. The influence these organizations have on our national and global markets is a point the Small Business Associate reflects to be critical towards maintaining our economic competitiveness now and in the future.
California has had a historical pull on establishing success through business growth and expansion in the state. Its key position in terms of national economy has continued to attract both well-established and new organizations to the west coast leader who are looking to tap into commercial success opportunities. It is the location where many of the top businesses we think about today were born out of. Tech giants like Apple, Google, Facebook, and HP as well as organizations who have turned to California after business operations get going. An extensive list of widely known names such as Disney, Oracle, Intel, Chevron, Cisco Systems and the like have moved central headquarters to the top city locations in the state.
What was a magnet for businesses looking to tap into booming industry networks in the state’s top ranking cities is now starting to take a back seat to other states doing things differently. “The topic of affordability has always been one that puts California behind other untapped locations that do not exceed the average median income required of today’s populations to sustain an middle to upper class lifestyle when living in the state.” shares entrepreneur Marcus Hiles who has established a thriving property development firm in one of California’s main competition, Texas. Being too centralized is another factor the state is facing, diversity is a big focus in today’s organizations who want to ensure they are tapping into new talent, resources and commercial networks that aren’t already operating in a crowded space.
A new report by rental industry news network, Apartment List was recently released for its 2019 ranking of the country’s most affordable rental markets. Looking at the largest 100 cities in the US, the report aims to target the spectrum of rental rates that span from top market prices to more affordable options. The report based its findings on the average rental price in each city as collected from last quarter of 2018. Taking this information and weighing it against information from the Bureau of Labor Statistics on median annual income, each location’s rent vs income rates were determined.
To understand true affordability in rental markets across the country, guidelines set by the U.S. Department Housing and Urban Development were used that categorize rents costing tenants more than 30% of their annual income as cost-burdening and harder to sustain. Understanding the areas where high salaries are necessary to live and rent along with those that are easier to afford, the 2019 report reflects much from that of last year’s results. With the factors driving rent costs remaining consistent over the last two years, renters are still burdened and benefiting from the same locations of last year.
With news hitting late last year on Amazon’s decision to move forward with New York as one of the locations for its HQ2, investors quickly responded with kicking off development across the city. The project that was set to begin in 2019 was planned in part for the Long Island area and was expected to bring over 20k new jobs to the city. The goal of the project’s plan to move into NY was to not only tap into the city’s well-established infrastructure but also build out more urbanization to areas outside of the main city like Long Island and Queens.
New York wasn’t the final location both residents and investors thought would make the cut. “With other cities considered including Columbus, Chicago, Indianapolis, and Atlanta, many felt the online e-commerce giant would take its influence and power to an up and coming area that could benefit substantially from the project to establish a presence in the national economy. Though, it was more important to Amazon executives and investors that the project timeline was reduced with a location that could sustain and support rapid growth- like New York.” shares Dallas-based property developer and entrepreneur, Marcus Hiles.
In their annual list of the best metro areas in the United States, analyst and online news firm US News has just announced their 2019 findings. Analyzing 125 of the most populous locations in the nation, the firm looked across categories of affordability, desirability, workforce opportunities and overall quality of life. To report their findings, sources of data were collected from public agencies including the US Census Bureau and Department of Labor which were referenced to drill down the factors of a successful local economy including job markets, housing affordability and availability as well as quality of education. To collect another perspective, the firm also utilized public polling to understand where individuals across the country would choose to live to further pinpoint desirability of each city in the running.
Buy or rent in 2019 is the topic being debated by populations looking to make their housing investment in the new year. Just less than two decades ago renting was not a readily available solution for most of the population where as now with a rush of development and new market categories, rental living can offer the same accommodations and fulfill the same requirements as those living in their own home.
These better amenities along with flexible liabilities are two main pulls bringing even former home owners to the rental market and now studies show affordability may be the latest attraction. This contradicts much of historical housing trends that focus in on home ownership as being the best investment. But as analysts look at some of the nation’s most populated counties including Houston, Texas, limited availability, high mortgage rates and stiff competition are pricing many would be buyers out of the market.
Renting today may even mean long term benefits for those seeking residence in popular areas as the going market rate for the same house just 5, even 3 years ago has gone up substantially. This upswing isn’t expected to continue on for good however, as many veterans and analysts in the industry project that housing markets have become inflated and will soon meet their cap – and inevitable downturn. These are just some of the reasons why renting is becoming a more popular option. Other impacts like demographic changes as a new group of consumers become the majority decision makers in the market, home ownership is not always the sound investment it was thought to be with past generations.
As more restraints are being put on today’s developers building out the next generation of housing properties, a new wave of property styles are popping up that focus on efficiency of resource consumption and labor. The ability to reduce cost of investment and turn-around time is what most often stands in between a project idea and its actual completion.
Thirty-year veteran and CEO of Western Rim Properties Marcus Hiles shares, “Almost every property development project is likely to go past budget and intended deadline. This is due to the various factors of unforeseen costs and unpredictable impacts that a location can have on speed of production.” Whether it is regulations from building permits, shipping delays, depleted stock supplies, or labor issues; the undertaking of completing new development projects can often create a negative ripple effect on all involved that costs time and money. These factors combined have pushed the need for an alternative to be introduced into the development space that addresses the ongoing and unpredictable issues created by traditional building methods.
Partnering in the dual HQ2 decision is the city area of DC, which will share the nearly 50,000 new jobs the investment will bring. The split and resulting decreased infrastructure requirements has not only opened up new areas as feasible options but also enables Amazon the chance to create two thriving markets while also tapping into the resources and talent each unique location has to offer.
Looking back to some of the statistics from Amazon’s first HQ location, it would seem each area will need to brace for substantial change. “Whenever new business enters an area, demand for housing is almost always likely to go up along with the rate residents are willing to pay,” shares CEO of Western Rim Properties Marcus Hiles who has over 30 decades of experience in the rental market.
A recent article by Forbes focuses in on this top question on the minds of local residents in NYC — how will this influx of new business impact Long Island’s housing market? The article cites the home prices in Seattle jumped more than 35% after Amazon entered the area. And that’s not the only impact the online giant had on the area’s economy, since 2013 home prices are reported to have risen 73% while rents were up 31%.
However the already over saturated populations in NYC and vast infrastructure that exists or is in development in the area presents a unique opportunity for Amazon. Early on the organization had made many evaluations to understand where the best investment would be location wise. One of those studies focused in on the necessary build up a location would require for the company to move in with tens of thousands of new employees brought with it. Online apartment network HotPads provided its data on the matter which did find many of the locations in the Amazon HQ2 shortlist weren’t fully equipped to handle the new growth right out of the gate and would require considerable ramp up to meet the needs of the new business investment.
This competitive rental landscape speaks true even at the top of the rental market with today’s property developers drastically limited with options for breaking ground on new projects. This is not a new trend and has been the case for several decades, one that has successfully pushed both developers and residents into new locations and city burrows that once were not an option for most. But this ability to breathe new life into an overlooked location is one of the most important factors allowing the city to keep on the uprise as it creates the grounds for vibrant new communities with residents and businesses happy to inhabit them.
With experience in both investing and developing in new or untapped areas himself, CEO and Founder Marcus Hiles of Western Rim Properties has seen the impact it can have on the city’s or even state’s whole community. “By creating housing options that are tailored towards introducing new demographics into an overlooked area, you are not only helping to stabilize the housing demand you are also creating opportunities for existing and new residents.” shares Marcus who has made a successful career out of taking a chance on locations that have potential for growth.
Residents of Houston, Texas know what it’s like to endure one of the country’s most severe storms ever recorded. Hurricane Harvey hit the Midwest state in fall 2017 bringing with it severe devastation that has been estimated to have impacted nearly 50% of all homes in the area.
A lot of things impact rent: building size, amenities, housing availability, proximity to central areas and most of all location. When looking nationally the rent variations from city to city can be extreme – especially when comparing historically high-priced areas with that of relatively new up and coming areas. It comes down to the area’s demand – rent has no cap and will go as high as the market allows.
That demand and subsequent price hike can become inflated if a location, mainly metro and city areas become overpopulated. Texas-based property developer Marcus Hiles shares his experience of market inflation by adding, “Take a place like New York City, the introduction of new housing is much more rare than a place like Austin, Texas. NYC’s available space for new property development is scarce and comes at a premium most average renters can’t afford nor makes for a smart decision for investors and developers.”
A new report by online authority in the rental industry, Zumper highlights this push-pull factor that continues to fluctuate the median rental rates nationally.
According to their data, today’s most expensive rental markets are those you would expect: San Francisco, NYC, San Jose, LA and Boston.
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