Earth to Dallas: If You Want the City Core To Grow, Treat the Small Business Landlords Better

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North Texas Growth DMN Graphic

I hate these short weeks: I still think it’s Wednesday. Sunday (I think) Brandon Formby wrote a story that appeared almost to be lifted from the Marcos Ronquillo campaign: the spectacular growth of our northern neighbors — Denton and Collin Counties — dwarfs Dallas’ piddly growth and is not necessarily good for Dallas County. Why? Because it will leave Dallas County with the very rich or the very poor.

The continuing population boom in Dallas’ northern suburbs isn’t necessarily a good thing for the entire region, especially the urban core.

Collin and Denton Counties continue to draw highly educated, middle-class newcomers from across the country. Meanwhile, Dallas continues to grapple with serving a poorer population. And the city must do so without the benefit of increased tax revenue that comes with exploding new developments and neighborhoods its northern neighbors enjoy.

This is the week we all come to grips with our property taxes and what we will shell out next year to pay for the privilege of living in Dallas County. Some of us will pay for schools we don’t even use. Meantime, newcomers to the area who look over the offerings — Downtown, Uptown, Oak Lawn, Kessler & Oak Cliff Etc., Lakewood & East Dallas Etc., Park Cities, Preston Hollow, Bluffview, Midway Hollow and North Dallas look at the homes, prices, schools. amenities, and compare them with what they can get up north. Which may be closer to their jobs anyhow, since that seems to be where all the employment is. So they move here and settle in Frisco, McKinney, Allen and a magical place called Lucas.

Between 2010 and 2014, the Dallas-Fort Worth area grew by 528,000 people to about 7 million people. Much of that growth came in northern suburbs such as Frisco and McKinney, which were among the state’s fastest growing cities with populations over 50,000. They saw respective growth rates of 24 and 19.6 percent.

Meanwhile, Dallas’ population grew 6.9 percent. Those same norther counties that draw domestic migration from Dallas also drew more people moving in from elsewhere in the country than Dallas did.

I have been discussing this with Dallas developers, real estate investors and landlords. While we are blabbing about building a tollroad by the Trinity, and tearing down another major highway, no one is touching on the real day to day nitty-gritty reasons why it’s such a pain to accomplish anything in Dallas. There are people who make a business out of buying, bluntly, crappy properties and making them better. The City, I’ve been told, makes their life about as hard as it can.

Dallas just does not encourage affordable re-development. They treat every landlord like they are slum landlords and all rules, regulations and inspections are geared to Section 8 Housing-type properties. Rules and inspectors are incredibly subjective.

Yes, it would be better to infill areas in Dallas with new, middle-class housing since the roads and (what little we have) public transportation is already here. But then when the small developer or landlord comes in and tries to make a silk purse out of a sow’s ear, they are blockaded. BY THE CITY. Or the NIMBY neighbors. Or the City Council. So they go north, where there is more land, cheaper prices, and far friendlier officials.

Oh yes, and better schools.

Even transportation expert Michael Morris, Central Texas Council of Government’s transportation director, says it’s better to re-new what’s in the city because then you don’t have to go build new, expensive roads and transit out yonder:

Michael Morris told the Young Constructors Council of the TEXO construction association last week that instead of an ever-extending transit network, the solution is dense infill developments where highway capacity and rail service already exist.

“The more development you can get to locate to areas that already have adequate transportation, the less you have to then build in the green-field areas,” Morris said in a subsequent interview.

They are trying in Richardson, where residential and office developments are going up along Dallas Area Rapid Transit’s Red Line, and in Irving/ Las Colinas, where apartment complexes are growing faster than my grass. I swear every time I go to D/FW, which is about once a month, there is a new complex sprouting out there. And so much is going on in Oak Cliff/Bishop Arts it gives me hope.

Still, the biggest problem Dallas faces is that the middle class has fled, median incomes are falling, and poverty is on the rise. Land costs are such that new construction is almost out of middle-class reach.  New apartments? Gorgeous, stunning, loaded and at least $2000 a month in a city where you could once get a very decent pad for $800 a month. What happened at the corner of Preston and Northwest Highway last year behind the venerable “Pink Wall” is a poster-child example of the struggle: developer (Transwestern) comes in to redevelop older, aging properties. They contract to pay through the nose for the land, but to make the numbers work for their investors, they need density and height. The neighbors say no to height and density. It will create traffic. The reason the Corrigan family was able to build three-story luxury condos west of this area (towards Hillcrest) years ago was their basis in the land was far less than Transwestern’s.

And then we are told that Millenials are flocking to the city, that we have raised a whole generation of urbanites who are shunning the ‘burbs. Want no part of them.

Now comes word — well, it came in January — that Millenials really do want to live in the suburbs and move out of the city, but they are stuck in urban areas and cannot get out because they cannot afford to move or get that mortgage:

It’s now the case that after young people live in a prosperous city for a few years, they’re finding it increasingly hard to get the economic foothold that would allow them to leave. Median wages have fallen for this generation almost across the board, which means young people have had a hard time saving money and building the good credit needed to secure a mortgage and buy a house elsewhere. This inability to flee from cities might be masking the fact that many Millennials still yearn for a house in the suburbs.

Net migration

It’s harder to get a mortgage now, remember, than it was before the Greatest Recession Since the Depression, when these kids were in school. They are saddled with college and grad school debt. They don’t buy cheap cars. They are delaying having children. But that doesn’t mean they wouldn’t like to get the fam out of Dodge if they could. I have written volumes about Light Farms and Phillips Creek Ranch. Last week, I took a peek at Windsong in Prosper where kids will be able to walk to a school within the community on a 30-mile series of manicured trails on foot, bike, scooter, all protected and Leave It To Beaver-style. Far out, yes, but a better life once you get there: this is what the northern developers are delivering.

Millenials want to live in burbs

Where do Millennials want to live? By the National Association of Homebuilders, MAY be a little skewed…

What can Dallas do to counter that? We can start with better public schools, or charter school alternatives, but I do tire of beating the dead horse. However, I will say we are seeing this happen before our very eyes in Lakewood where pro-active parents have taken over the schools and property values are rising handsomely.

Which of course makes it more expensive to buy. As for tearing down a highway, why don’t we start with simple baby steps — like making it easier on those who do try to improve what’s already here?

Morris’ comments about the sustainability of suburban sprawl came during a panel discussion about the fate of Interstate 345, which forms downtown Dallas’ eastern border. A group of urban planners and civic leaders called A New Dallas say the elevated I-345 is suppressing land values.

They also say it’s preventing what could be a renaissance of high-density, mixed-use development connecting downtown to Deep Ellum and East Dallas.

I see plenty of areas ripe for re-development, but where oh where are the owners? Maybe in crime watch meetings: for every multi-family unit you own, you must attend four crime watch meetings a year, one per quarter. Or standing by for the roach inspections.

I would appreciate your thoughts and comments on this, as we are collecting stories.

 

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Candy Evans, founder and publisher of CandysDirt.com, is one of the nation’s leading real estate reporters.

3 Comments

  1. JE on May 28, 2015 at 6:47 pm

    Great story, Candace. Agree with everything but I do think there should be reasonable restrictions on landlords. I live in Oak Cliff and I think irresponsible, absentee landlords are the #1 contributors of blight. I’m lucky to live in a nice neighborhood with mostly owner-occupied SF homes, but guess which neighbor has 5 cars with one of them parked in the front yard? Yep, the renter. And the landlord is nowhere to be found.

    That said, the good landlords are welcome here. I think Oak Cliff is the perfect place for millennials in Dallas.

    • Candy Evans on May 28, 2015 at 7:15 pm

      Absentee landlords ARE a problem.

  2. RWard on May 29, 2015 at 10:12 am

    Sure, Dallas has its problems but % growth paints a incomplete picture as those communities that show the greatest % gain are calculated using a much smaller base….. its an easy conclusion to draw and exaggerate

    What we do know is the city core is finally growing, we also know that over time the % of city core and suburbs shifts as the entire pie gets bigger….Geographically Dallas is and has been landlocked for a long time

    Dont panic we are pretty well off

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