Dallas-Fort Worth’s ongoing job gains and recent influx of corporate relocations in the northern suburbs is extraordinary. As a commercial real estate broker, I am often asked what impact the residential housing market has on my business.
The rise in North Texas home prices has been significant in almost all areas of Dallas-Fort Worth, but that has not deterred companies from choosing to relocate to the area. The diversity of labor, quality of life, and growth factors are still extremely strong.
I do think, however, we are starting to see a micro impact of the housing boom for certain jobs, which highlights the importance of placing a company in the right location to optimize the attraction and retention of key labor. A combination of rising housing prices, increased commute times, and the cost of the commute (due to those dreaded tolls and gas) will ultimately impact where certain companies choose to operate within DFW.
The ability for employees to find affordable housing (leased or owned) has a meaningful impact on attracting and retaining talent. Although a one-hour commute is my norm, not everyone wants to do that. Ten years ago, the diversity of housing, from a price standpoint, within a 30-minute commute ring of the North Dallas Tollway and State Highway 121 was much larger than it is today. Commute times are increasing due to increased congestion, and you have to travel farther to find the more affordable housing.
Since 2011, the average home has risen 53%, with no meaningful slowing insight given our continued economic growth. If the majority of your employees can’t afford housing in the $300,000 to $450,000 range (which represents the range of housing averages in Richardson, Carrollton, Addison, Plano, Frisco, and McKinney) the increased commute distance and times to travel to some northern suburbs may be a deterrent.
Furthermore, employees may not want to pay in excess of $300 in tolls every month; this is the line item in my family’s budget as we both work in Dallas and heavily use tollways. Time is money, tolls are money, and in a fiercely competitive labor market, attrition is big money.
Location intelligence is key. DFW still has a rich labor supply and great growth indicators. Companies will continue to relocate here because relative to other cities, we rock. However, just because Plano works well for company A, Irving may work better for company B, and DeSoto works best for company C. There is a science to predicting this, and the location that worked well in 2007 may require a relocation in 2017.
The good news is that we have 4,800 square miles of space in DFW to search for the perfect location. The abundance of land and low barrier to entry for development provide new opportunities for commercial office and employment centers. We are truly blessed to live in this city and state where everything is bigger including the opportunities for growth and development. Wait a second…this Midwestern girl is starting to sound like a Texan y’all.
