North Texas is growing at an unrivaled pace.
Dallas-Fort Worth was the fastest-growing metro area in the U.S. by population from 2010 to 2020, followed by Houston, according to U.S. Census data, and has been projected to surpass Chicago in the next decade or so as the nation’s third most populated metro. A new report released Thursday shows that D-FW trails only Nashville in a scorecard of metro areas where property executives expect to prosper.
So what is the region and state’s special sauce, and what could get in the way of North Texas’s rapid development? Former Dallas Mayor Ron Kirk and Michael Levy, CEO of Dallas-based real estate investor Crow Holdings, sat down Thursday to discuss the region’s success and future at the Urban Land Institute’s annual fall meeting in Dallas this week with more than 5,300 attendees.
When asked what could undermine the “Texas miracle,” Kirk didn’t shy away from taking the conversation in a political direction.
“I think we’re succeeding in spite of ourselves,” said Kirk, who’s now a strategic adviser in Gibson, Dunn & Crutcher’s Dallas and Washington, D.C., offices. “To say there is a disconnect between our local governments and our state leaders would be a gross understatement.”
Kirk said Texas’ Republican state leadership has an antipathy toward urban areas, even when that’s where people from around the country are moving.
“They are depriving us from resources, cutting us off of services, focusing more on things like where the six transgender kids are going to the bathroom, restricting rights,” said the Democrat, who also served as U.S. trade representative in the Obama administration. “We have benefited largely from people moving here from other parts of the country considered a little bluer than here. I do think employees matter.”
As state politicians focus on hot-button cultural topics such as abortion and transgender children, Kirk said he expects them to invest less in education, and that could make the region less desirable.
“I answer more questions now from clients trying to learn about guns than I do any other issue,” Kirk said. “It may not manifest itself now, but I think long term, we’ve got to get back to the sort of business-friendly, conservative, smart fiscal policy but investing in those underlying issues that are going to make us competitive.”
Levy, a longtime finance and investment manager who was previously an executive at Morgan Stanley, said he thinks most people fall somewhere in the middle on political issues. He doesn’t expect a culture clash to stop people from moving to Texas.
“There isn’t a state in the union that isn’t having this going on inside its border,” Levy said.
Still, Levy said a lack of workforce development and education for kids in disadvantaged areas could undermine the region’s growth in the long term.
“It isn’t about getting everybody jobs,” he said. Instead, it’s about “showing them there’s another life out there, that your story might be your story, but there are other people here with your story.”
Noting the power failures during the 2021 winter storm, Levy said the state needs to make sure residents can get access to basic infrastructure.
“Water, power, transportation, amenities, schools — those meat-and-potato issues are critical if we’re going to grow at this scale,” Levy said. “Does anybody like to live with crumbling infrastructure, does anybody like to live with high power costs, does anybody like to live in drought conditions? Those things will kill us.
“But the state’s done a pretty darn good job in the scheme of things of investing in and delivering on all those meat-and-potato issues.”
Texas as a magnet
Moderator Cullum Clark, director of the George W. Bush Institute-SMU Economic Growth Initiative, asked Kirk why Dallas and other Texas cities have seen such an explosion of growth.
“There’s just one glaring answer — I mean, we are the largest real estate play in the country, if you think about it,” Kirk said. “Nobody’s moving here to be near the mountains or the ocean.”
Kirk, who served as mayor from 1995 to 2002, said while it is important for the city to have a great urban core, great workforce, and great schools and housing, the big driver to the region’s growth has been DFW International Airport. The airport is one of the busiest in the country, with direct connections to the biggest business centers.
“Thank God the federal government forced the most successful shotgun marriage in the history of shotgun marriages when it forced Dallas and Fort Worth to come together to build DFW Airport,” Kirk said. “I can’t imagine we would have experienced the incredible growth that we have had as a region over the last 40, 50 years.”
Levy said the region’s lower taxes and cost of living have driven population growth, in addition to the state’s culture of hospitality, self reliance and independence.
“I think the self-reliant, independent nature has also led to a pro-business orientation that’s in the fabric of the city,” Levy said. “That culture is attractive to lots of people and certainly attractive to business, and I think that’s a critical component.”
Clark asked Kirk how to think of the gap between the city of Dallas and surrounding suburbs, adding that people will talk about companies coming to Dallas when they are actually settling in suburbs like Frisco, Plano and Irving.
“You can get hung up on that, and you can realize that we all benefit writ large now,” Kirk said. “The reality is a lot of corporate executives live in the city of Dallas, they live in the Park Cities. Their employees want to experience amenities that they’re not going to get in the suburbs.”
Levy sees the downturn of the urban core as an issue across the U.S., and said Dallas-Fort Worth has many desirable suburbs where people want to live. He said crime and homelessness may sway people away from downtown.
“There’s so much opportunities in the other areas,” Levy said. “[Capital] just moves, and people move. They look at their quality of life.”
Levy said it takes public-private partnerships to build in historically underinvested communities, but Kirk pushed back on that notion.
“You only hear that when you’re talking about the urban center; you don’t hear that when you talk about building in Prosper and all of the suburbs,” Kirk said. “If you just look at [the urban center] as a new market with incredible resources and land that have been neglected, you bring I think the same private equitable business decisions that you do to the suburbs.”
