Last year, Tesla Inc. opened a pickup plant in Austin, and Oracle Corp. announced that it would move its headquarters to the capital of Texas. Hewlett-Packard Enterprise Co. has announced its move to the Houston area. Charles Schwab Corp. moved from San Francisco to Westlake, an affluent suburb of Dallas, where Fidelity already has a campus. Vanguard plans to open an office in the region early next year.

And hedge funds are multiplying or expanding all over Dallas. Canyon Partners, which manages $ 24 billion, is expected to have 55 employees in town by the end of the year. Millennium Management by Izzy Englander, who has had offices in Texas since 2016, is backing a new Dallas-based fund Meridiem Capital Partners, which is expected to start trading in the second half of this year with $ 1.5 billion.

Cinctive Capital Management opened an office in Dallas this year with a capacity of approximately 20 people. The fund, which manages around $ 1 billion, is expanding its operations in Texas, believing that there are talented managers in the state who could be overlooked by other companies. Avidity Partners has more than doubled its footprint in the state since its inception in 2019, and its assets have reached $ 4 billion. All these movements are according to people familiar with the plans of each fund.

Lack of income tax is only part of the draw. Housing is relatively affordable. The health care system in Houston and other cities has some of the best hospitals in the country. Along with a warmer climate, plentiful restaurants, activities for families, and plenty of room to walk around, job creation in the state has served as a magnet.

“Job growth has generally been double the national average over the years,” said Pia Orrenius, an economist at the Federal Reserve Bank of Dallas. “And when you compare it to places like California and New York, the cost of living is still significantly lower, even if it’s starting to go up. “

Texas has a long history of using cash grants and local tax incentives to encourage businesses to relocate. Today, a slew of local, growth-oriented businesses are pulling money into an economy that state leaders say would be the ninth in the world if Texas were an independent country.

“COVID has really just accelerated it,” said Andrew Brock, director of JP Morgan Private Bank for central Texas, based in Austin. “People come here to invest. They come here because they believe there are opportunities to deploy capital.

Brock says Austin is benefiting from an influx of family offices and private equity firms looking to develop growing businesses alongside established giants like Dell Technologies Inc. and more recent successes like Yeti Holdings Inc.

Texas was already growing. Over the past decade, Dallas and Houston have added more people than any other metropolitan area, bringing the state’s population to around 29 million. Austin has grown at the fastest pace for urban areas of at least one million people.

The state has won two seats in Congress in the past decade, while California and New York have each lost one. The Golden State lost population in 2020 for the first time. The most popular destination for people on the run: Texas.

“The dynamic of people moving off the coasts and coming to places like Texas is a lasting trend,” said Mark Okada, CEO of Dallas-based Sycamore Tree Capital Partners, which he started last year with Jack Yang. and Trey Parker to invest in alternative credit. He points out that the state has an optimal tax rate, is a few hours flight from both coasts and only an hour behind New York.

Real estate agents are trying to follow. Supply is limited in desirable neighborhoods, and it’s not uncommon for homes to attract dozens of bidders, many from California. In some cases, buyers show up without work but with a lot of money after selling their homes in more expensive places.

The median home price in Texas jumped 14% in March to a record high $ 283,200, boosted by a 29% increase in Austin and double-digit gains in Dallas and Houston, according to the Real Estate Research Center of Texas A&M University.

“It’s the reverse of how people used to settle in California,” said Marie Bailey, who in 2017 moved to the northern suburbs of Dallas from the Los Angeles area and became a real estate agent. She started a Facebook group three years ago for Californians moving to Texas and recently surpassed 33,500 members.

Booms – and busts – have a long history in Texas. The oil and savings and loan industries both died out in the 1980s, leaving behind years of economic ruin. Today, the state’s major cities are less dependent on oil and natural gas. Houston still feels the pain when energy prices fall, but the city can also fall back on major aerospace and medical industries, as well as growing biotech and clean energy clusters.

Growth comes with headaches. Traffic is deteriorating and public transport is limited. The influx of people drives up house prices, forcing the cost of living to raise property taxes. With high real estate levies and state sales tax, the tax burden on middle-class people is higher in Texas than in California, at least according to the Institute on Taxation and Economic Policy. .

In addition, Texas can be its worst enemy when it comes to economic development. The state’s independent power grid failed under pressure from unusually cold temperatures in February, raising doubts over Texas’ views on electricity deregulation and aversion to federal oversight.

And then there are the recent headlines from Austin, where the Republican-dominated state legislature has spent the past few months taking a series of controversial measures, including restricting voting and abortion rights, l expand the ability to carry a weapon without a license, and limit the participation of transgender children in sports. The debates sparked anger in the national media, cheering on far-right conservatives and worrying moderates who fear the state’s mark will continue to become a caricature.

“We’re basically doing things that offend the highly skilled workers that we need to attract,” said Ray Perryman, a former economist at Baylor University in Waco who has followed the Texas economy for 40 years.

Perryman said he was also concerned the state was not investing enough in health care or education. More than half of its school children are Hispanic, but Hispanic families control only about 5% of the state’s wealth, he said. Black children make up over 12% of students, and African American families are also under-represented in wealth accumulation.

“I’m afraid we’re not looking past our noses,” Perryman said.

For now, the rush is on. Alex Wilcox, CEO of a small upscale airline called JSX, moved the company from California to Dallas three years ago to tap a labor pool filled with former American Airlines Group employees. Inc. and Southwest Airlines Co. He went looking for a house in the upscale Park Cities neighborhood, but ended up building a house on empty land.

“It sounds extravagant, but it was actually more economical than buying a seat,” he said. “We spent half for a 5,000 square foot house of what we would have spent for half that size and 60 years in Newport Beach.”