USA - TEXAS Trends and Developments Contributed by: Brad Holdbrook, Mary Mendoza, Michael Coleman and James Barnett, Haynes and Boone, LLP
Over the past 12 months, Texas cities like Dal - las, Houston, and Austin have continued to showcase significant urban growth, while also observing dynamics of population and busi - ness dispersal in various neighbourhoods. This multi-faceted urban development scenario reflects broader trends impacting Texas’s major metropolitan areas, influenced by factors such as migration patterns, economic policies, and housing market dynamics. Urban Growth and Migration Patterns In recent years, Texas has seen a significant influx of new residents from coastal states like New York and California, particularly in its larg - est metropolitan areas, driven by a blend of economic opportunities, a friendly business environment, and a (relatively) low cost of liv - ing. This relocation trend was notably influenced by the COVID-19 pandemic, which accelerated the movement of people and businesses from more densely populated and higher-cost areas to places like Texas that offer more space and affordability. The Dallas-Fort Worth metroplex (ie, the North Texas metropolitan area including Dallas, Fort Worth, and surrounding cities) led the state in net in-migration, followed by Austin, which not only attracted a large number of new residents but also saw an increase in migration rates relative to its population size. Smaller Tex - as metropolitan areas also witnessed increased migration, reversing previous trends of net out - flow. This migration pattern is part of a broader national trend observed during the pandemic, where outmigration from large urban areas in the Northeast and elsewhere accelerated, while a few rural counties saw gains in population for the first time in years. The shift in popula - tion diffusion to states like Texas represents a continuation and magnification of pre-pandemic
migration patterns, with populous areas like Dal - las County experiencing historic levels of growth on top of several decades of steady expansion. A closer examination of the nation’s 56 major metropolitan areas between 2019-20 and 2020- 21 reveals a marked shift in demographic trends, with a significant number experiencing either slower growth, greater declines, or a switch from growth to decline. Major metropolitan areas across the country, particularly those in coastal areas and the industrial Midwest, saw population losses, with the largest numeric losses occur - ring in New York, Los Angeles, San Francisco, and Chicago. In contrast, metropolitan areas in the Sun Belt, particularly Texas cities like Dal - las, Houston, and Austin, saw the greatest gains, highlighting the significant role of domestic migration as the primary driver of demographic change during the prime pandemic year. Migration trends observed over this period of time reflect a complex interplay of factors, including the widespread adoption of remote work, which has made it easier for people to relocate to more affordable and desirable loca - tions. The movement from high-cost coastal cities to Texas metropolitan areas has brought considerable talent and investment to the state, fuelling sustained economic growth. A booming economy spurs further in-migration to Texas, perpetuating the cycle of growth both fiscally and demographically. Real estate owners in par - ticular have benefited from Texas’s growth as new residents drive appreciation of residential properties and a confluence of business factors insulate Texas’s commercial real estate sector from the substantial headwinds persisting in other parts of the country.
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