Dallas' pool of highly educated residents stacks up favorably for Amazon's HQ2


Amazon could put its proposed HQ2 campus near downtown Dallas by the iconic Margaret Hunt Hill Bridge.

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Amazon has made it clear that a highly educated labor pool will be a top consideration in its search for a second headquarters, and the Dallas-Fort Worth area stacks up favorably in that category, new research suggests.

The Dallas area added roughly 402,000 “highly educated” residents between 2008 and 2016, according to a study released Tuesday by commercial real estate firm JLL (NYSE: JLL).

The study defines highly educated as those holding a bachelor’s, master’s, professional or doctoral degree.

Seattle-based Amazon (Nasdaq: AMZN) has narrowed its list of HQ2 contenders to 20 metro areas, many of which were included among the 25 cities JLL analyzed in its report. The Dallas area is among the 20 Amazon is considering. Amazon’s HQ2 will employ 50,000 people in jobs that mostly pay $100,000 and up, the company has said. Show Full Story

The Dallas area’s gain of 402,000 highly educated people falls well short of the approximately 914,000 highly educated residents added in the same period in the New York City area. But it's comparable to the 427,000 added in and around Washington, D.C.

However, both of those areas have much higher housing and living costs, and the highly educated in those markets command markedly higher salaries.

The Dallas area's gain in highly educated talent is almost twice the 239,000 gain posted in Atlanta and its suburbs. Atlanta is often mentioned among the front-runners for HQ2, and its living and housing costs are similar to those in Dallas.

Dallas outpaced the other prospective HQ2 cities with similar business climates, and living and housing costs, as well. HQ2 contender Boston, for example, added only 277,000 highly educated people between 2008 and 2016 in the city and its suburbs. The Chicago area added 346,000 with a bachelor's degree or higher. Seattle, Amazon's current corporate base, added 270,000 highly educated residents in the eight-year span.

The point of JLL’s study was to compare talent levels in major cities and those cities’ suburbs, not to analyze specifically where Amazon may locate its second headquarters, so the HQ2 extrapolations are my own.

The study’s main takeaway for Dallas was that as more companies set up shop in the suburbs, the highly educated workers expected to fill those companies’ jobs are increasingly choosing to live in the city’s urban core.

That could also bode well for Dallas, since Amazon reportedly favors locating in the heart of a city and not in a suburban setting. Then again, it may not be a major differentiator, given that nationwide, highly educated people are clustering in major cities faster than they are in the suburbs, JLL’s research found.

Major cities’ educated population across the U.S. is up 28.7 percent since 2008 in the urban core, whereas the suburbs surrounding those cities have increased their highly educated populations by 23.6 percent.

I interviewed Walt Bialas, JLL's director of research for Dallas, about these trends and their implications.

Bialas declined to discuss Amazon’s HQ2 search specifically, but he did say the DFW area has the talent and other qualities to lure companies seeking highly educated workers.

“One thing that the Dallas-Fort Worth area has that many other areas like Boston, Washington D.C. and Seattle don’t have is an amazingly good cost of living,” Bialas said. “People can afford to live a pretty good life, especially if you’re a young professional coming to Dallas. People will come here for those opportunities.”

The type of highly educated workers matters, too. Amazon will specifically need software and web developers at HQ2. A study by IT industry association CompTIA shows Dallas has a relatively strong case on the tech talent front.

DFW has 209,600 tech sector jobs, according to CompTIA. That soundly beats Austin, the only other Texas city still in contention for HQ2, which has 113,200 tech jobs. Breaking it down further into software and web developer positions, DFW has 39,183, and Austin has 20,389 positions of those types.

Turning to DFW’s out-of-state competition for HQ2, the nation’s biggest metro, the New York-Newark area, has the most tech workers, with 392,400 in the sector. Some 96,068 of those are software and web developers. The Atlanta metro has 155,600 tech sector workers. Of those, 32,722 are software and web developers.

Washington D.C., has 297,900 tech jobs, including 64,704 software and web developers. Boston has 263,500 tech jobs, including 52,588 software and web developers. The Denver area has 114,500 tech sector workers, including 24,476 software and web developers.

For perspective, the Seattle area, where Amazon is based now, has 178,800 tech workers. Some 63,037 are software and web developers, and many of them work for Amazon already.

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