Dallas-Fort Worth is becoming the capitol of America’s heartland

Dallas Morning News
Originally Posted: September 19, 2021

By: Joel Kotkin and Cullum Clark, director of the Bush Institute-SMU Economic Growth Initiative and an economics professor at Southern Methodist University. This column is an adaptation of an article in City Journal.

Located on the Southern Plains, far from America’s coasts and great river systems, the Dallas-Fort Worth metropolitan area epitomizes the new trends in American urbanism.

Over the past decade, North Texas has grown by some 1.3 million people to reach a population of just under 7.7 million, making it the nation’s fourth-largest metro area, based on new figures from the 2020 census.

Dallas-Fort Worth is now home to 24 Fortune 500 company headquarters, trailing only New York and Chicago. Among America’s top 20 metros, D-FW boasts the fourth-highest rate of net inbound migration, and demographers project North Texas will reach 10 million people sometime in the 2030s, surpassing Chicago to become America’s third-largest metro area.

Rather than building on natural advantages, North Texas owes its tremendous growth to railroads, interstate highways and airports, plus an unusual degree of economic freedom and affordability.

In the second half of the 20th century, business leaders built a first-tier transportation network, centered on DFW International Airport but also including a premier national hub for ground logistics and a toll-road system that could support rapid outward growth. Thanks to DFW Airport, the world’s 12th-largest in passenger numbers, travelers can reach every major city in the United States within four hours, plus 66 nonstop destinations outside the U.S.

Today, Dallas is pulling away economically from the nation’s long-established urban centers because of a distinctive policy orientation: growth-friendly, with lighter-touch business regulation and lower taxes than longtime urban centers in the Northeast, the Midwest or California.

Only four of the 53 U.S. metros with more than 1 million people outperform D-FW on an SMU Bridwell Institute for Economic Freedom index. The index measures tax levels, government spending and labor rules. Likewise, only five of these metros have more growth-friendly land-use rules than D-FW, based on a data set compiled by researchers at the University of Pennsylvania’s Wharton School.

D-FW’s location and cost advantages have become powerful magnets for businesses. Already home to the headquarters of well-established companies like Texas Instruments, American Airlines, Southwest Airlines, Kimberly-Clark and D.R. Horton, North Texas in recent years has rapidly acquired headquarters for such elite companies as California-based Jacobs Engineering, Fluor, Toyota Motor North America, McKesson, Tenet Healthcare, CBRE and Charles Schwab.

Bob Pragada, chief operating officer of Jacobs, which moved to Dallas in 2017, said high living costs, particularly for housing, made the Los Angeles area increasingly prohibitive for his 55,000-employee firm. READ MORE