Dallas has lost much of the housing affordability edge that once helped draw newcomers to North Texas, according to researchers at SMU’s Bush Institute.
If you lived in North Texas 10 or 20 years ago, you may remember people who moved into the area marveling at how much cheaper it was to buy a house or rent an apartment in Dallas-Fort Worth. But new research obtained by NBC 5 Investigates suggests that feeling is fading for people from many parts of the country.
“I would put it to you that essentially Dallas has no housing price edge relative to any place in the middle part of the country now. We still have a diminished edge relative to the northeast,” said Cullum Clark, an economist with the Bush Institute-SMU Economic Growth Initiative.
Clark compared cities analyzing home prices and average incomes and found housing in Dallas is now equal to or more expensive than most major U.S. cities. He said significant housing savings are still common for people arriving from the California coast, but that even New Yorkers don’t see as much of a price advantage in Dallas as they once did.
So, what happened to Dallas as a bargain housing destination? Clark said it comes down to supply and demand, and that new construction couldn’t keep pace with the area’s population boom — at least not enough to prevent a housing shortage, which drove prices up.
“It’s not because we’ve been terrible at building, it’s because the demand to live in North Texas has grown so fast that we could not possibly keep up on the supply side,” Clark said.
Clark also said Dallas is even farther behind in building apartments that low-income families can afford, especially families making less than $52,000 a year.
“When we look at that population of renters, we’re short about 46,000 affordable rental units,” said Ashley Flores, who tracks housing at Dallas’ Child Poverty Action Lab.
When NBC 5 Investigates asked housing analysts how Dallas could close the gap and bring down costs for families at all income levels, experts repeatedly pointed to another Texas city to the south.
“The Austin story is really important right now,” Clark said.
In Austin, city leaders and housing advocates said changes to building rules have helped accelerate construction and lower rent costs. So NBC 5 Investigates headed to the heart of Texas to see firsthand. We met with Austin Housing Commissioner Felicity Maxwell, who walked us through a construction project where two lots that once held single-family homes were being transformed into six smaller dwellings, with three on each lot. The shift was made possible after Austin reduced its minimum lot size to 1,800 square feet.
“This allows folks to come in and actually use this land, put three units and have each one of the units be less expensive, a little bit smaller,” Maxwell said.
Austin has also streamlined its building permit process and changed local zoning rules to allow apartment construction to begin more quickly in areas already zoned for commercial buildings — opening more land for new units.
“So you change the rules. Make it easier to do some things, and then you get some great outcomes like this,” Maxwell said.
Analysts who track housing costs nationwide told NBC 5 Investigates that the approach has helped Austin rapidly lower rents.
“In inflation-adjusted terms, rents are down over 25% in Austin since the summer of 2022. That’s a dramatic improvement in a short amount of time,” said Alex Horowitz of the Pew Housing Policy Initiative.
One market analysis published by MRI Real Estate Software, which tracks rental rates, showed that since 2024, the average rent in Austin declined by about $160 a month — that’s nearly $2,000 a year that goes back into families’ pockets. In DFW, rents have softened some at the same time, according to the analysis, but only by about $40 a month.
“As we’ve seen permitting times come down in Austin, and as we’ve seen it get easier to build in Austin, affordability has started to improve there,” Horowitz said.
For resident Maddie Abdalla, the changes have helped make it possible to stay in Austin after finishing college.
“I definitely have seen rent go down overall,” Abdalla said.
Abdalla said she found an even bigger discount through a city rental assistance program that helps developers start projects faster, in exchange for offering some lower-priced units to renters at certain income levels.
“I get to have savings and start building up savings now. Again, nothing sizable, but it’s just being able to have income to feel safe instead of check by check,” Abdalla said.
Clark said the results showed what can happen when construction rises quickly.
“What it shows is that if you have a sufficiently big house building and apartment building boom, it works. It does, in fact, drive down home prices, and it at least causes rents to stop going up,” Clark said.
The Texas Legislature recently passed a series of bills that will require other big cities, including Dallas, to take steps similar to Austin’s, including reducing minimum lot sizes and opening more commercial land for apartments. Housing advocates hope those changes will help more families find a place they can afford.
“If we want Dallas to be a home for everyone, we really have to think about meeting the housing needs of everyone,” Flores said.
This summer, the Dallas City Council is expected to have a draft of rewritten local zoning rules.
Some neighborhood groups have raised concerns that smaller lots and more apartments would bring too much density, while some DFW-area leaders have complained that the new state laws would limit local control over housing. As the city moves forward with zoning changes, advocates and opponents alike expect more debate over how to balance density and affordability.
Read more on NBC 5 Dallas-Fort Worth
