The 2020 census could show that Texas has 4 of the 10 largest U.S. cities
by Henry Cisneros and Cullum Clark
North Texas has experienced stunning growth, and its economy is weathering the COVID-19 storm better than most cities.
One of the key reasons for the region’s resilience is that it’s an integral part of an increasingly cohesive, powerful economic system: the Texas Triangle, stretching from North Texas to Austin and San Antonio in the southwest, with Houston anchoring the southeast corner.
The fate of Dallas as well as Texas will hinge on the region’s success in seizing the opportunities and answering the challenges posed by an urbanized future, one that will look very different from what Texas has known throughout history.
Urban scholar Richard Florida has furthered the idea that the pivotal geographic units driving the economy today are neither states nor cities, but “mega-regions” comprising interlinked metro areas. Around the world, mega-regions are where the action is.
In a recent report on America’s economic future, consulting firm McKinsey argues that 30 U.S. metro areas are pulling ever further ahead of the rest of the country in terms of innovation and growth. Virtually all, including each of the metros of the Texas Triangle, are in America’s top eight mega-regions. And leading mega-regions now compete with each other for talent, business and even political and cultural influence in the nation.
The Texas Triangle stands out among America’s mega-regions in numerous respects. In demographic and economic terms, it’s younger, less white, more Hispanic, more economically expansive, more lightly taxed, and more permissive in business and land-use regulations than other mega-regions.
The Triangle’s population grew some 50% from 2000 to 2020 — far ahead of most other mega-regions — and now exceeds 19 million. The 2020 U.S. Census will likely confirm that the region’s four largest cities, Houston, San Antonio, Dallas and Austin, are among America’s 10 largest, the first time that a single state has had four of the top 10. Fort Worth is close behind, as America’s 13th largest city.
The Triangle is home to 48 Fortune 500 headquarters. If it were a nation, it would be the world’s 15th largest economy.
Among the drivers of the Triangle’s success is its exceptionally diverse economy. The region’s strong positions in business services, finance and health care alongside its historic dominance in energy have helped shield it from downturns in particular sectors, such as Michigan has experienced with autos and numerous regions are now suffering with tourism.
The Triangle has long offered better housing affordability than most other mega-regions, reflecting its pro-growth attitude toward development. While it faces divides between haves and have-nots like all mega-regions, it’s given lower-income residents more upward mobility than most other mega-regions, based on a measure developed by Harvard economist Raj Chetty.
Underlying these advantages is a pragmatic style of politics in local government that runs counter to the image conveyed by some Texas leaders in Austin. The Triangle has remained committed to greater economic freedom than any other mega-region, according to data from Southern Methodist University’s O’Neil Center for Global Markets and Freedom.
The Triangle’s growth is reshaping the economy and identity of Texas. Its metros make up just 35 of the state’s 254 counties but account for 66% of its population and more than 77% of its economy. Texas now has more of its population in metropolitan areas than most states, refuting outdated stereotypes of Texas as a land of wide-open spaces dominated by ranches and oil derricks.
Demographers project the Triangle’s population will grow to 35 million-plus by 2050, fully 8% of the American people. While the COVID shock may weaken dense, public transit-dependent cities, the lower-density but highly productive cities of the Triangle are well-positioned for a changing urban landscape.
The scale and momentum of the Triangle economy are making Texas into a more powerful force than it’s ever been before. At the same time, the realities of a highly urbanized future demand that state and local leaders update their thinking.
First, Texas must raise its game in education, particularly in large urban school systems. The Triangle performs behind most leading mega-regions in its population share with a bachelor’s degree or higher. While each of the Triangle’s urban districts have made helpful reforms, each faces serious challenges in raising outcomes, particularly for the Hispanic and Black students who now dominate each district. The Triangle has been successful in importing skilled workers from elsewhere, but it must do a better job in growing a skilled, diverse, home-grown workforce.
Second, housing attainability is emerging as a severe challenge for moderate-income people, especially in core cities where construction has slowed in recent years. The problem is most acute in Austin, which approaches West Coast levels of housing market dysfunction, but Dallas is close behind. Almost all the Triangle’s population growth is now in more affordable suburban areas like Collin, Comal, Hays and Fort Bend counties, but even there, housing supply isn’t keeping up with demand. Unaffordable housing forces many people to live too far away from job centers to access available jobs, holding back productivity. The Triangle needs much more housing supply.
Third, the Triangle needs to make major investments in physical infrastructure to keep up with its growth. Above all, this means water supply and transportation infrastructure, since Texas is growing drier, and the roads in its leading cities have become among the most congested in the nation.
And fourth, the Triangle’s cities face challenges in developing more inclusive models of metropolitan growth. Neighborhoods and schools are almost as segregated on racial and economic lines as they were in the 1960s. That said, the region’s high-growth urbanizing suburbs are rapidly growing more diverse, and in some ways are leading the way toward a future of greater integration and opportunity.
To secure the future of the large metros that will power the state’s economy after the COVID crisis and for decades to come, our leaders need to step up on these challenges, adjust their priorities, and adapt to the emergence of a new and different Texas.
Henry Cisneros served as secretary of the U.S. Department of Housing and Urban Development under Bill Clinton and is a former mayor of San Antonio.
Cullum Clark is a director at the Bush Institute-SMU Economic Growth Initiative and an adjunct professor of economics at SMU. They are among the authors of a forthcoming book on the Texas Triangle to be published by the Texas A&M University Press.