Toyota moving to Texas

[irvinehomeowner]

RE value isn't just tied to employers, it's the first 3 rules of RE... location, location, location.

People like to live here because of the weather and lack of congestion like the older East Coast cities.

If half the employers were to leave Irvine, I doubt RE values would drop, new companies would come in and people would look for new jobs.

Look at Hawaii, not many job centers there but RE over there is expensive because people *like* to live there.

I'm not sure how effective it would be to stop Prop 13 either. Look at how much Mello Roos and taxes people are paying on new builds or move-ups, it's not really stopping people from buying. While it could make people want to sell, where would they go? People stay put because they like where they live, rising property tax versus no more mortgage isn't that much of an incentive.

It cost more to do business in CA, it cost more to live in CA... that's not going to change and if you don't like it... move to Johns Creek*.

*I'm shilling for Panda/Baby Irvine

 

[qwerty]

If half the employers were to leave Irvine, I doubt RE values would drop, new companies would come in and people would look for new jobs.


tell that to Detroit.  my point was assuming no companies would come in as replacements since CA is too expensive. i was referring to the long term impact of companies continuing to leave over the long term. 

 

[irvinehomeowner]

tell that to Detroit.  my point was assuming no companies would come in as replacements since CA is too expensive. i was referring to the long term impact of companies continuing to leave over the long term. 

Detroit is not the same as SoCal.

 

[qwerty]

tell that to Detroit.  my point was assuming no companies would come in as replacements since CA is too expensive. i was referring to the long term impact of companies continuing to leave over the long term. 

Detroit is not the same as SoCal.

but the impact is the same, companies leaving in droves without replacement does bad things to the area.  now i dont think companies will leave socal in large quantities, but if they did, detroit is the blueprint.  i dont think there are enough vacation buyers to prop up the entire Socal real estate market.

 

[irvinehomeowner]

But your premise is flawed.

SoCal is not Detroit in that there will always be replacements because of the superior location and availability of quality workers.

Detroit can't be the blueprint because the location itself does not have the same advantages.

 

[paperboyNC]

But your premise is flawed.

SoCal is not Detroit in that there will always be replacements because of the superior location and availability of quality workers.

Detroit can't be the blueprint because the location itself does not have the same advantages.

The Detroit metropolitan area didn't die - just the city itself. Everyone with money moved to the suburbs and there was enough land in the suburbs that the city hasn't been gentrified.

 

[notTHEoc]

According to this WSJ article (http://online.wsj.com/news/article_email/SB10001424052702303939404579529672654374090-lMyQjAxMTA0MDIwODEyNDgyWj), Denver, Charlotte and Atlanta were in the mix. So maybe John's Creek was under consideration.

Some other interesting tidbits from the article:
A challenge for Toyota will be avoiding a brain drain. Nissan retained just 32% of its workforce when it relocated from the Los Angeles area to Franklin, Tenn., outside of Nashville. Many more employees returned to California after a few years, said Larry Dominique, who was the chief of U.S. product planning for Nissan at the time and now is president of Automotive Lease Guide, a unit of TrueCar Inc.

The auto maker also has a small manufacturing operation in Long Beach, Calif. Toyota said its design studio and several other smaller functions would remain in California, keeping its total workforce there at 2,300.

I love that Texas taxpayers are paying $40M to make it happen.

So much for "limited government."

Steal jobs from one state, put them in another. Zero-sum corp welfare check.
At least $40mil to build a bridge or wind farm is a net +ive. Creates jobs, adds infrastructure.

 

[qwerty]

But your premise is flawed.

SoCal is not Detroit in that there will always be replacements because of the superior location and availability of quality workers.

Detroit can't be the blueprint because the location itself does not have the same advantages.

maybe i didnt make it clear. IF - companies left a in mass quantities. i said i didnt think it would happen in Socal, but IF companies left and new ones didnt step in.

 

[morekaos]

The song remains the same.  Nissan moved for the very same reasons and it was not all about the real estate....

http://www.nytimes.com/2005/11/10/business/10cnd-nissan.html?_r=0

Nissan's decision to move its North American headquarters to Tennessee, where there is no state income tax and it cost 44 percent less to do business than in California, comes as the company and other automakers are cutting costs in a tough North American business climate. High gasoline prices, stiff competition and consumer fatigue have combined to slash auto sales in the United States.

That was 9 years ago and the only thing that has changed is....things got worse.

 

[irvinehomeowner]

@qwerty:

You agree with me that half the businesses won't leave Irvine (or that replacements will happen) but then you say to tell that to Detroit. My point is you can't even bring up Detroit as an example because it's not the same as Irvine in the most important ways.

Again, your premise won't happen. I can guarantee it... even in the long term. Before that does, gubment intervention will save Irvine, just like when the bubble popped.

If the stock market crash of '08, the death of banks and the credit crunch can't kill Irvine RE prices, nothing can.

I bet even a zombacolypse won't affect us (have you seen Warm Bodies where the zombies regain their humanity and one becomes a realtor, I bet he was selling homes in Irvine).

 

[Irvinecommuter]

The song remains the same.  Nissan moved for the very same reasons and it was not all about the real estate....

http://www.nytimes.com/2005/11/10/business/10cnd-nissan.html?_r=0

Nissan's decision to move its North American headquarters to Tennessee, where there is no state income tax and it cost 44 percent less to do business than in California, comes as the company and other automakers are cutting costs in a tough North American business climate. High gasoline prices, stiff competition and consumer fatigue have combined to slash auto sales in the United States.

That was 9 years ago and the only thing that has changed is....things got worse.

People said this when the aerospace industry and the military moved out.  But yet, California still has the biggest economy by far for US. 

California should not start a race to the bottom like Texas.  Just like the US shouldn't compete with with China and Vietnam for cheap labor. 

 

[irvinehomeowner]

Put it this way, you can get more than an acre in TX for way less than a no-backyard/no driveway/neighbor shade lot in Irvine... but people still choose and pay for CA.

I imagine what's going to be left of the CA jobscape is high paying jobs in finance, technology, service etc. All those blue collar jobs that don't have the margins to afford CA's business expenses will go out of state.

So with all these high salaried employees... where do you think CA RE prices are going to go for premium areas?

 

[Irvinecommuter]

Put it this way, you can get more than an acre in TX for way less than a no-backyard/no driveway/neighbor shade lot in Irvine... but people still choose and pay for CA.

I imagine what's going to be left of the CA jobscape is high paying jobs in finance, technology, service etc. All those blue collar jobs that don't have the margins to afford CA's business expenses will go out of state.

So with all these high salaried employees... where do you think CA RE prices are going to go for premium areas?

Also...geographic and social benefits of California cannot be overstated.  There is a good reason why Indian and Chinese FCBs came to California, not Texas.

 

[morekaos]

The problem is you will get "Escape from New York"  in reverse.  The beach cities will wall in and defend while the rest of the state turns into the central valley.  High unemployment, high crime and the largest welfare state on earth.  Can Elysium support the masses?

 

[morekaos]

You are right that this has been a long term trend. I don't want to move to Texas but I sure would like to see some of their policies implemented here.  In the end it is a battle of political ideologies and I think in the end Texas model is better for all involved.

http://thehill.com/blogs/congress-blog/economy-a-budget/307111-economic-growth-texas-california-and-revisions

The BEA revised California?s real GDP growth downward from 2009 to 2011 in each of three years by a cumulative 2.6 percent, the third-largest negative revision in the nation.

In other words, California?s economy shrank an additional 2.6 percent before it grew 3.5 percent.

So, in the past five years California?s real GDP contracted 0.3 percent, one of ten states where economic activity was less in 2012 than it was in 2008.

By contrast, the BEA revised Texas? growth upward by 0.5 percent from 2009 to 2011.

Texas? newly revised real GDP growth from 2009 to 2012 was 13 percent.

From 2009 to 2012, California?s share of the U.S. economy shrank from 13.1 percent to 12.9 percent while Texas? portion of the American economy increased from 8.2 percent to 9 percent.

Some critics might contend that Texas? economic boom is wholly due to the revitalization of the Lone Star State?s oil and gas fields through fracking. However, if the entire mining sector is removed from the calculations, Texas? economy would have still grown at a faster pace than California?s from 2009 to 2012. Further, California has about two-thirds of the nation?s proven shale oil reserves in the vast Monterey Shale formation?that the Golden State makes the political choice not to allow the extraction of this underground wealth can?t be held against Texas.

There?s another interesting data nugget to be mined out of BEA?s revisions. Looking at the year-by-year real GDP revisions for California, we see that California?s output was revised downward 0.4 percent in 2009, 1.4 percent in 2010, and 0.8 percent in 2011. What most people have already forgotten is that California enacted a $24 billion, two-year tax increase in 2009, the largest state-level tax hike in U.S. history. This tax increase boosted income taxes, sales taxes, and vehicle taxes and was in full effect in 2010, then phased out in 2011. The greatest downward revision in California?s economy was in 2010, the year when the whole weight of the tax increase was being felt. The BEA now estimates that California?s 2010 output grew at an anemic 0.3 percent, down from the previously estimated 1.7 percent. The overall U.S. economy grew at a revised 2.4 percent that year, eight times California?s pace. Texas? economy expanded 4.1 percent, 71% more rapidly than the national economy.

In 2012, California?s temporary tax increase fully expired. Not coincidentally, California?s economic performance that year, 3.5 percent growth, outpaced the 2.5 percent growth of the U.S. economy. This was first time in several years that California?s economy grew faster than the U.S. economy?a regular occurrence for Texas.

Slow growth has a direct bearing on prosperity and poverty. According to the U.S. Census Bureau, from 2009 to 2011, California?s supplemental poverty measure was 23.5 percent, the highest in the nation with 42 percent more people living in poverty as a share of the population than in Texas.

It will be highly instructive in the coming quarters to see if California can continue to exceed the national growth rate, especially after California voters approved a big tax increase last November which made California?s income tax the highest in the nation.

Texas, on the other hand, looks set to enact a modest tax cut.

The public policy contrast between the two largest states couldn?t be clearer.

 

[notTHEoc]

I don't want to move to Texas but I sure would like to see some of their policies implemented here.  In the end it is a battle of political ideologies and I think in the end Texas model is better for all involved.

What happens if all states try to adopt the Texas "model?" It stops working. No states to steal jobs from anymore so no net new job creation. But all workers would have fewer benefits, fewer protections, and lower wages (kind of like a BRIC country). GDP would be lower. Peeps can't afford to buy as much stuff so corp profits go down too. But corporations would get taxpayer paid welfare.

 

[morekaos]

Not so.  Texas is not supporting its economy by simply poaching it.  It is attracting them and GROWING them organically.  Growth increases their standard of living.  This is not a zero sum game as you postulate.  The pie slices up healthier  the bigger you make the pie. Just the one observation of exploiting the vast energy deposits we sit on could fuel massive economic prosperity for ALL Californians but alas, our current system will never allow that to happen.  Other states don't see it that way which is why they grow and we shrink.

 

[notTHEoc]

Not so.  Texas is not supporting its economy by simply poaching it.  It is attracting them and GROWING them organically.  Growth increases their standard of living.  This is not a zero sum game as you postulate.  The pie slices up healthier  the bigger you make the pie. Just the one observation of exploiting the vast energy deposits we sit on could fuel massive economic prosperity for ALL Californians but alas, our current system will never allow that to happen.  Other states don't see it that way which is why they grow and we shrink.

Paying Toyota $40mil to move 1k jobs from CA to TX is zero-sum. What happens if all states follow this strategy? Will it still work? Growing one pie short-term at the expense of another is nothing to be in awe over.

Organic growth would be if you took $40mil, invested it in infrastructure (airports, public transport, roads, etc.), schools, worker training, etc. that made the state long-term more competitive and attractive for growth. This is NOT the TX model.

Perry is loud and proud of his poaching strategy. No reason to see it as something grander than that.

 

[OpenSky]

 

[usctrojancpa]

Sounds like traffic will decrease a bit.