North Texas job growth fuels a new bumper farmland crop: homes
Date: Oct 08, 2018 06:49 AM
'It's hard to turn down': Why developers and not offspring are getting today's D-FW family farms
Karen Robinson-Jacobs, Real Estate Reporter
More than 700 acres near northern Tarrant County that for generations grew hay and fed cattle soon will grow young families, as one of the region's newest master-planned communities sprouts from the soil.
Developed by the team behind Aledo's Morningstar master-planned community, the new Northstar project is in the earliest "dirt moving" phase of what is expected to become 2,200 homes, along with green space, two clubhouses and a school site.
As North Texas' major employment centers spread like bamboo roots to the north and west of central Dallas, so too expands the need for playgrounds and patios, driveways and dining rooms.
And as developers seek fruitful sites to launch new projects, they're finding fertile ground in former farms.
"As many jobs as we're creating over here, we need housing. We need affordable housing," said developer Tim Fleet, as a Caterpillar 345D hydraulic excavator chewed up chunks of mocha-colored soil at the coming-soon Northstar. "We've got millions of acres of farmland."
While most of North Texas was once farmland, tracking some of the largest, newest communities, in some cases more than an hour from downtown Dallas, shows how much the Texas growth juggernaut is chewing into the former turf of corn and hay.
On a recent cloud-flecked day, standing on a rise of soil yet to be leveled, Fleet and his partner in the project Kim Gill had two vistas.
Their 750-acre development is near U.S. 287, north of Avondale Haslet Road, just beyond the northern reaches of Fort Worth. It straddles three counties: Tarrant, Denton and Wise.
At the horizon, to the south and east, you can see the rooftops of developer Hillwood's huge AllianceTexas project in North Fort Worth.
Over decades, the 26,000-acre project has grown to include more than 480 companies, more than 48,000 workers, 44 million square feet of development and more than $8 billion in private investment.
"Ross Perot Jr.'s big employment center is right over there, it's like a 10-minute drive to 30- to 40,000 jobs," said Gill, referring to Hillwood's chairman. "It's 20 [to] 25 minutes to downtown Fort Worth.
"I've been doing this for over 30 years," added Gill, 66. Development "just keeps moving out further and further but so do the jobs. People go where they can buy affordable homes with the right amenity package and a great school district. And then they'll drive to work."
There's no question the region is a jobs magnet.
Between 2010 and early this year, North Texas added more than 750,000 jobs, according to a report from commercial real estate firm JLL that used U.S. Bureau of Labor Statistics data. The region topped Forbes' 2017 list of the best cities for jobs.
Gill and Fleet aim to offer those new workers an accessible and "affordable" welcome.
From his perch at Northstar, casting his eyes due east, Gill pointed to the rooftop of the home of John Wilson, whose grandfather bought 7,000 acres of Texas decades ago, after making a tidy sum running a hardware store in nearby Newark, which then was a "big town."
Family lore has it that the patriarch, R.A. Hudson, paid a nickel an acre.
Wilson said he was born and raised on the land. Growing up, going to school in Fort Worth, he remembered "it was ... miles before I saw any houses. It was farmland on both sides [of the road]. Of course, now everything's coming this way."
Hudson's land was passed along to Wilson's mom and other descendants. Wilson's portion was large by local standards. In 2012, the U.S. Department of Agriculture estimated the average farm size in Tarrant County at about 115 acres.
Wilson, 72, said he hasn't farmed all of the land himself in years. He leased it to another farmer who grows hay and raises the black Angus cattle that spent a recent afternoon lolling by a small pond.
Wilson's children were more interested in cash than crop. That led to talks with a broker, and Gill and Fleet, and earth moving equipment.
"They offered a lot of money," Wilson said with a chuckle. "It's hard to turn down. I don't make enough money on the leasing really even to pay the taxes of it. Times change everything."
Wilson said he held on to 75 acres, so part of the homestead will remain, partitioned off from the newbies by a new fence.
In Northstar, Gill and Fleet see a future of single-family homes, 1,800 to 3,000 square feet, priced from the low $200,000s to $350,000.
Gill sees that price tag as an attention getter.
"The most unique thing [about the project] – in today's environment, because people are so focused on interest rates going up – is the price point," he said. "Let me know where you can buy ... a brand new house in the low $200s in a very desirable school district. That's a big selling point."
Housing analyst Ted Wilson, principal at Dallas-based Residential Strategies, does a quarterly survey of the North Texas housing market, stretching from Sanger and Van Alstyne on the north, down to Waxahachie.
He's seen the hottest spot migrate from western McKinney to Forney and parts of Kaufman County.
To the northwest, "287 especially [near] Alliance Corridor has performed magnificently," he said.
"A lot of it has to do with affordability," he said, noting that builders are gravitating to places where land costs are lower.
Often, that means turning former hinterlands into new parts of the urban center.
"If you're on the outer ring, as development expands you're taking what used to be farmland and turning it into new neighborhoods," Ted Wilson said. "That's not unique to [Northstar]. That's pretty typical of anywhere you go if you're on the fringe of development. That's kind of the nature of the beast."
The agriculture department's 2012 census bears that out.
Among six North Texas counties, only the two with the largest populations and job centers – Dallas and Tarrant – saw drops in both the amount of acreage used in farming and the average farm size between 2007 and 2012, according to the USDA.
North Texas farmland is "disappearing and disappearing fast," said Blake Bennett, a Dallas-based extension economist with Texas A&M, who grew up on a West Texas cotton farm.
"We're going to have to go outside of Dallas and Tarrant County to see a farm eventually. It's an evolving society," he added. "The jobs are in the metroplex, in your large urban settings. So that's where people are going to move to. It's not [a bad thing], according to society. Society sees that it's more important for development than it is for farming."
When the 2017 census comes out Feb. 21, Bennett expects it to show more agri-land churn.
Most of Northstar, about 55 percent by the developer's estimate, is in Wise County. Forty percent falls in Tarrant County, with the remaining 5 percent in Denton County.
In the 2012 census, both Wise and Denton counties were decidedly ag-oriented. About 68 percent of Denton County land was still used for agriculture in 2012, while the percentage in Wise was 84, according to Dallas Morning News calculations.
One benefit of Northstar's proximity to city life is utility service. The development will be served by Fort Worth water and sewer lines, which the developers will install, connecting to infrastructure put down for the nearby Sendera Ranch community.
That means Northstar residents won't need to deal with septic systems and wells, as do some nearby homes, Gill said. He estimates putting in the water and sewer lines for the first 1,284 lots will cost an estimated $35 million, some of which comes back to the developer as residents start paying utility bills.
That figure is part of a project with an overall development price tag of $90 million. That doesn't even count the cost of the land, which both sides declined to disclose.
Northstar will be in the popular Northwest Independent School District, recognized as one of the best school districts in Texas, with an "A" in the state's recent accountability rating.
The development also will include multiple pools, playgrounds, nature trails, and an indoor facility with offices, game rooms and space for planned events.
For improved access, developers plan to build off and on ramps to 287 that will connect to their new road – Northstar Parkway.
The developers broke ground on Northstar last month and expect to have the first 410 developed lots ready for builders by the end of next year. Gill said he's "pretty confident" Northstar will sell up to 250 homes a year. That's based in part on the success of Morningstar, to the west of Fort Worth, which has sold more than 400 homes in two years.
"In Morningstar, we have people from all over the country who have moved in, young families that are taking jobs in Lockheed, the oil and gas business, all the different businesses that are hiring on the Tarrant County side of the metroplex," said Gill, as another load of dirt was scooped up by heavy equipment.
"The demand from the job growth in Dallas-Fort Worth is what's driving the housing market. We're creating thousands of jobs every month."
Twitter: @krobijake