Fort Worth’s Mayor on Cutting Taxes, Out-Growing Austin

Fort Worth is on a roll, and it wants everyone to know it.

The perpetual second-fiddle in the Dallas-Fort Worth metroplex has some $2.3 billion worth of new developments in the pipeline, the Wall Street Journal recently reported. The city added more people last year than any other American metro, making it the epicenter for growth in the fastest-growing region in the country.

Mayor Mattie Parker stands at the helm of that speeding ship. Growth has been the rule for Texas metros in recent years — the question now facing Parker and her colleagues is how best to steward that growth so it doesn’t turn into a bubble. As Forth Worth grows from a regional presence to a national player, and national investment moves in, Parker will play a key role in some of Texas’ most significant real estate investments.

Parker spoke with The Real Deal about how she plans to promote “smart development,” slash property taxes and engage in some friendly competition with other Texas Triangle cities. The conversation has been edited for clarity.

Fort Worth gained 19,170 people last year, making it the fastest-growing city by volume. All those people need a place to live. What is Fort Worth doing to make sure there’s enough housing for everyone who wants to move there? And what is the role of the private sector in getting there?

Fort Worth has been one of the fastest growing cities for over a decade now. We’ve seen that momentum continue in our city, and we choose to approach it as a positive. This is our moment, and to your point, affordable housing and access to housing have to be at the center of good public policy. You can’t get there without partnership from the private sector.

In Fort Worth, we’re really lucky that we have an active real estate council, made up of all the private sector partners you would think of, that helped inform our policies around access to housing at the city level.

We have to focus on streamlining the permitting system so that it works alongside private sector partners to build quickly, but at high quality, and having infrastructure that comes along with housing. That’s one thing that as a community, we have the right policies in place.

In fast growing places, especially sprawling cities like Fort Worth, which is about 350 square miles, we have to ensure that we have the road infrastructure and water infrastructure necessary to handle the type of housing that we need.

Could you talk a bit more about permitting reform? In Austin, red tape has led to higher home prices. But in Houston, we’ve seen some developers actually ask the city for tighter zoning rules to increase predictability.

In Fort Worth, inside Loop 820 is the more established part of the city. Outside of 820, a lot of growth and sprawl is happening in the west toward Parker County. Then up north, in the Alliance corridor, and then north on 35.

The needs are different, so the question is, how do you knit those communities together? What type of density can you encourage in the inner city through different types of housing projects — not just traditional single family, A5 zoning, but also multifamily? Townhomes, duplexes, all those types of things that really encourage higher density in the inner city. Mixed-income housing is also something we encourage heavily through our policies.

When it comes specifically to permitting, we’ve done a tremendous amount of work, and it’s a priority that this council has set for our city manager. We invested millions of dollars in our development services department in the last budget cycle. You need a management structure that works so that when decisions are made, you’ve got one department head leading that effort.

As for streamlining, we moved employees that were traditionally in the Water Department, Transportation and Public Works, parks and even fire to come under the umbrella of Development Services to push for smart growth strategies that have some of the best business practices from a regulatory standpoint in the country.

On the fifth floor of our new City Hall will be the development services department. We consider it a one-stop shop that will be enviable for any city across the country, where you can walk in, whatever size your development is, and get your questions answered.

It’s also technology systems that we’ve implemented and upgraded in the last several years, and making sure our development services director has the managerial power to make the right decisions and move the process through as quickly as possible. We want to facilitate business, growth and economic development in our community, and not stifle it with an unnecessary regulatory framework. At the same time, we also want to be one of the safest cities in the country from an infrastructure standpoint.

Another area where real estate and policy have intersected in Texas is on the issue of property tax relief. The legislature has been unable to reach a deal. Homestead exemptions have been a real sticking point, but Fort Worth just voted to raise its own homestead exemptions for disabled homeowners and seniors. How did that come together?

It’s just the start. We’ve been focused on compressing our tax rate as much as possible over the last 10 years, reducing that tax rate as revenues continue to climb and home values were rising. You’ll see us do the same thing again in the next budget cycle. So how much can we lower that property tax rate for our residents and businesses but at the same time, have a smart growth strategy to keep up with the infrastructure needed and one of the fastest growing cities in the country?

At this point in the next budget cycle, the legislature will hopefully by then have figured out what their property tax reduction strategy will be for the state of Texas, and that complements the efforts we’re making here locally, but we felt it was really important to take care of those that are most vulnerable first, which are the over-65 and disabled people.

We’ve tried to communicate more with the public to make them understand that one-third of their property tax bill funds streets, water, public safety, police officers, the fire department: all the things that really matter to make the community ideal. In Texas, property taxes are stifling the state, so we want to be a part of the solution.

Gov. Greg Abbott has said his goal is to bring the school maintenance and operations property tax rate to zero. Do you support that?

If you can get there, go for it, but I have not read in depth what that strategy would be. We’re a two-legged stool in the state of Texas: we don’t have an income tax, and that’s not going to change anytime soon. So with sales taxes and property taxes, that’s how you fund major governmental services. If they’re proposing the state would be the funder, I think there’d be a lot of support for that. But there’s a lot of detail that needs to come in to understand what it looks like, especially in years when you don’t have a $32.7 billion dollar revenue surplus.

How do you view the relationship between Fort Worth and the rest of the “Texas Triangle” cities of Dallas, Houston, Austin and San Antonio?

It’s the healthy kind of competition you’d want to see in a state succeeding so greatly right now. We all sort of know our place in the Texas economy, but it’s not uncommon for individual Texas cities to compete for businesses either. Sometimes a company says, “I’m coming to Texas,” it just depends where.

North Texas alone is 8 million plus people now — we’ll pass the Chicago metro area in the next several years as the third-largest metro region. Austin was so fast growing and the sexy city in Texas for a while, so we’re able to focus on some of the problem areas: What are the things that Austin would do differently if they could go back in time? And what can we learn from them and do the same?

All in all, for Fort Worth’s economy. We’re incredibly diversified — we have some wonderful bedrock, foundational employers like American Airlines, Lockheed Martin and Bell Textron. Obviously, there’s a heavy emphasis on defense and aviation. But we also have healthy spaces in finance, biotech, advanced logistics and manufacturing. So we’re paying close attention to make sure we have a diversified economy that can withstand the ebbs and flows of any economic downturn and still be a thriving place to build your business.

As we expand into the 350 square miles I spoke of earlier, we’re about to see the tap developed. We have a lot of growth opportunities. So who do we want to be when we grow up?

Texas A&M is building a massive, three-building research campus in southeast Fort Worth. What does that project mean to the city?

We broke ground last week on the new, $350 million downtown urban research campus. To give you context, Fort Worth is the only large American city that doesn’t have a tier one research university anchored in the city. Having A&M present really changes that. Having the A&M brand and prestige here in our community is incredibly exciting, and I think the sky’s the limit.

They’re really focused on integrating corporate partnerships into the work that they’re doing here, and then providing a talent pool of graduates in Fort Worth to stay in Fort Worth and become a part of the higher education ecosystem that we already have here.

In the convention center district downtown, which is completely revitalizing, phase one as the convention center is getting off the ground this summer. You’ve got the Texas A&M campus, the Omni Hotel expansion, so we will bookend downtown with all the success we’ve had in the urban core.

The types of large scale public improvements you talk about will require tax revenue. With office values declining across the country, there’s been a lot of worry about cities like San Francisco, New York and Chicago entering an “urban doom loop.” As tax revenues collected from commercial real estate plummet, they’ll have trouble funding city services, the theory goes. Have you seen that same trend in Fort Worth?

We haven’t. I would first point to our central business district, where the vacancy rate in our high-rise buildings is around 13 percent. They have maintained that rate coming out of COVID, which is an enviable rate if you look at other major US cities.

People are back in the office and working downtown. And furthermore, we’ve got two or three big office projects in the area around the central business district, coming from developers and money from outside the city of Fort Worth.

We can also learn lessons from other big cities — our skyline does look different. I learned recently that like Facebook, for instance, just subleased a major high rise in Austin. We don’t have those same problems. Things are slower in terms of commercial growth, but that will actually go to our benefit, because we can be really intentional in what we attract here in this new economy that we’re entering.

Other large cities are not taking care of quality of life for their residents. Public safety, taking care of homeless populations, being a clean, beautiful place to live. There’s a reason why people aren’t going to work in downtown San Francisco or downtown New York and people are leaving: it’s quality of life.

That’s where Austin has been able to keep up and still be successful. People still love living in Austin. It’s a great city, right? Fort Worth needs to pay close attention to that — every decision we make, even if it’s focused on economic development, we have to focus on how it benefits the lifestyles of those that live here. You have to focus on the basics to have a successful city, and we do that every day.