Why is There So Much Construction in Dallas?
Dallas is home for many reasons. Many people mistake construction workers for subcontractors. Some believe that the city is seeing economic growth. And others have more basic reasons. Some believe it's the misclassification of workers. These reasons are valid. It's not about adding more homes to the region. It's also about increasing demand for rental properties, schools, and college and university campuses.
Subcontractors are often mis-classified to include construction workers
A new study has shown that nearly 40% of workers in construction are mistakenly classified as subcontractors. Companies can avoid having to verify the immigration status of workers and instead pay illegal workers by mis-classifying them. It enacted the new law after the state's Workforce Commission fined an Illinois roofing contractor $1.6 million for mis-classifying workers as independent contractors. But the Texas legislature has yet to pass any legislation to combat this problem, although the construction industry has seen an increase in misclassification over the past two decades.
A Texas lawmaker has filed a bill similar to Davis' proposal. House Bill 434 would penalize construction firms $100 for each employee who is mis-classified, and $1,000 for the third. The bill's opponents say it will increase the cost of new homes. The legislation, if it is passed, would hurt construction firms. Texas Workforce Commission recommends the changes. Although Davis' proposed law has some shortcomings, it should allow workers to get the benefits they need.
Demand for rental property
Although Dallas was already large, it will continue to grow in popularity and demand for rentals. The city's median household income is $45,215, lower than the national average of $55,322. A strong tenant pool results from Dallas's more than half-million renters. This is why investors are looking to buy homes in Dallas that cater to renters. Before you decide to invest in Dallas rental properties, here are some things you need to know.
Even though home ownership is more expensive, there are still many Dallas residents who want to rent properties. This is due in large part to the influx of young people to the area. During the past year, demand for rental units in Dallas has risen by 14%. Young people who are not ready to own a home have been flocking to Dallas, so renter demand for rental properties in the city has risen in the last year.
Colleges and universities
Recent years have seen significant growth and relocation of Texas college campuses. In Dallas, colleges are building new facilities in the wake of the jobless recovery. One university, the University of Texas at Dallas, is adding a new science building and dining hall and investing $130 million over the next 24 months. These projects will dramatically alter campus' landscape. Campus size will increase by one third.
I expect the Texas Legislature to approve a tuition revenue bond bill allowing colleges and universities to borrow money secured by tuition dollars and pay back the loans with state funds. I expect those bonds to help Texas colleges and universities address the workforce shortage. The money will ultimately go to students seeking better education and higher salaries. As a result, higher education institutions in Texas are experiencing a rapid growth in enrollment.
Economic growth
There are 24 Fortune 500 offices in the DFW metropolitan area, more than New York and Chicago combined. It is significant because it shows that DFW's economy is growing at a faster rate than those of its biggest competitors. The metroplex has also suffered less from the Covid-19 pandemic, which has affected the economy of the three largest cities in the U.S. By 2030, more than a quarter of all construction in Dallas will be for office space.
One reason for so much construction in Dallas is that the city is becoming more prosperous. The climate has been favorable to economic growth through corporate relocations. In addition, the city is less regulated than other metros, which allows business owners to expand more easily. Because of these factors, Dallas and Houston are attracting businesses that will create jobs. Dallas residents will benefit from the new business opportunities.
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