DALLAS – On Tuesday morning in downtown Dallas, it might have been hard to tell the state’s third largest city has suffered some big-name economic losses.
Colorful street art installed for the FIFA World Cup, which has injected good vibes and camaraderie into the sprawling 8.5 million-person region, adorned car-jammed streets. Employees holding coffee cups passed through the glass front doors of Whitacre Tower, long home to AT&T, like any other day.
But AT&T plans to leave downtown Dallas for a mega-campus in nearby Plano, one of many prominent setbacks the city faces. The Dallas Stars, the city’s National Hockey League franchise, will join them. Though the Dallas Mavericks plan to remain in city limits, the team is also leaving the city’s urban core, opting for a spot closer to the city’s northern, more suburban fringe.
Those departures from in and around downtown follow years of relative stagnation in Dallas. Last year, the city’s population fell for the first time since the COVID-19 pandemic — it’s now at 1.3 million people after losing 1,800 residents — while the region and other large Texas cities boomed.
“We’re a bug floating in a sink of water, and for the first time, the water didn’t rise, the water went down a little bit,” Dallas County Judge Clay Jenkins said. “We need to deal with the fact that the sink has a leak.”
As big names depart for Dallas’ suburbs and its population stagnates, the city’s status as the region’s economic engine could be in serious jeopardy — and the suburbs once birthed by Dallas now hold the cards.
Dallas has long sustained an outflow of people to the surrounding suburbs, driven by perceptions of better schools, attainable housing, public safety and family friendliness. Officials and experts say that Dallas hasn’t built enough housing, which could stanch the bleed, and without efforts to seriously beef up the city’s population growth, observers warn that the city could wind up hollowed out.
“If you start having population decline, then you're going to have empty housing,” said Lloyd Potter, the state demographer. “When you have empty housing, the property values start going down. If your tax base starts decreasing, you're going to be hurting pretty bad especially with the kind of infrastructure demands that Dallas has.”
The string of recent losses has fueled an already impassioned debate over whether Dallas should demolish its iconic-but-divisive City Hall downtown in a moonshot bid to spur redevelopment — a bitter fight that has magnified the stresses of the city’s uncertain future as well as its potential reinvention.
Signs abound that Dallas could be on the verge of renewed growth, spurring some optimism amid the losses. The city’s burgeoning financial sector, dubbed “Y’all Street,” is on the rise. Pockets of vibrancy exist throughout the city in places like the Bishop Arts District and Lower Greenville. And the urban core is adding residents as developers transform long empty office towers into new residences.
“I don't think we are going to become that city who bottoms out and has to declare bankruptcy and start over,” Council Member Paula Blackmon said. “Dallas is that can‑do city. We build stuff.”
Civic and business leaders argue the losses are potentially a blip on the way to greater growth. But they acknowledge the city could be more competitive with its neighbors to prevent a growing exodus.
“The city has reinvented itself a number of times over the decades,” said Brad Cheves, who heads the Dallas Regional Chamber. “I think we're at one of those moments right now, and I think that's thrilling. We should embrace it as opposed to being fearful of it.”
Flight to the suburbs
This year’s commercial purge started with AT&T, which in January announced it will relocate from downtown to a sprawling, 2.3-million-square-foot campus in suburban Plano — replete with a 280-foot tower resembling downtown Dallas’ distinctive Reunion Tower. Plano officials lured the company with a $20 million incentive package.
Months later, the Stars, the city’s National Hockey League franchise, said it too would move to Plano, setting up shop on the sprawling site of a flagging suburban mall, which the Stars plan to redevelop into a mixed-use development that includes an arena as well as apartments, shops and restaurants.
The move puts the Stars at the center of the region’s growth, Stars CEO Brad Alberts said in an interview. The team’s base of ticketholders is there, and with the growth of cities further north like Celina, Prosper and Anna, they only expect that ticket base to grow, Alberts said.
"Our fans live up this direction, and we're betting that it's only going to increase over time,” Alberts said.
While Dallas’ population grew by 2% from 2020 to 2025, the Dallas-Fort Worth region grew by a whopping 10%, driven largely by the suburban explosion, according to Census figures. Six cities in the region — Fort Worth, Celina, McKinney, Frisco, Denton and Princeton — added more residents than Dallas in that span.
Companies “want a safe and secure environment, and they want to make sure that their employees are safe and secure,” said John Muns, mayor of Plano, about the suburban attraction. “They want good education for their employees' children and they want a qualified workforce.”
And among the state’s five largest cities, Dallas has added the fewest residents since 2020.
Given the city’s growth woes, Dallas housing advocates want city officials to urgently pass a suite of potential reforms to make it easier for developers to build denser, more affordable kinds of housing including townhomes, duplexes and smaller apartment buildings. That would enable the city to absorb more of the region’s growth, advocates posit, while bringing down the city’s housing costs.
For the past five years, Collin, Tarrant and Denton counties have consistently seen more homes permitted per capita than Dallas County, according to a Texas Tribune analysis of Texas A&M University building permit data. Last year, jurisdictions in Dallas County permitted about 4.7 homes for every 1,000 residents. In Collin County, that figure was 14.7. The amount of undeveloped land on the urban fringe has enabled suburbs and exurbs to quickly put up tens of thousands of single-family homes, though the other counties also build more apartments per capita than Dallas County.
“As a city, if we value having our workforce actually live in our city, we need to make it as easy as possible to build good quality housing close to jobs, transit and schools,” said Dallas City Council Member Chad West.
Weak growth has already compounded Dallas’ budget problems, leaving the city with a potential $51 million hole in its upcoming budget. Without enabling more housing, local governments of all stripes will find themselves in an increasing financial bind, putting the rising cost of government services like public safety and infrastructure on a stagnant tax base. If that base doesn’t grow, homeowners and business owners may find themselves paying higher taxes to pay for crucial services.
“If we don't see some growth, it's a really bad deal for businesses and homeowners,” Jenkins said.
Downtown dreams
Some see growing downtown Dallas as the road to more robust growth for the city. It’s at the heart of the city and it’s easier to build housing there because residents are less likely to fight it as they might in parts of town dominated by single-family homes.
“If we attract young professionals and people as they move and relocate to North Texas, if we're competitive as a place to live, we'll put forth the best chance to retain a robust employment sector,” Scripps said.
Downtown has steadily added residents since 2010, and is now home to about 16,000 residents bolstered by conversions of empty office spaces to apartments, according to a presentation by Downtown Dallas Inc., a nonprofit that oversees the area. Those conversions have produced more than 1,100 apartments since 2020, and another 1,975 are in the works, according to CBRE Group Inc., a commercial real estate services and investment firm.
Some think downtown Dallas needs a big jolt to sustain the progress, eying the iconic City Hall, designed by the legendary brutalist architect I.M. Pei, as a site that could potentially serve as a catalyst for new development — if it were razed.
The City Council voted in June to stop making repairs on the building and explore options to relocate, citing estimates that it would cost hundreds of millions of dollars to make various repairs to the current building as the city faces a budget crunch.
“We must fight for the city of tomorrow rather than worship decaying, outdated government buildings from bygone eras,” Dallas Mayor Eric Johnson, who declined an interview through a spokesperson, said in June.
That opens up the opportunity to help bring life to a long-dormant section of downtown, proponents argue. The area around City Hall is pock-marked by half-empty parking lots and vacant land as well as some low-lying commercial buildings and warehouses.
“City Hall is iconic,” Cheves, the Dallas Regional Chamber head, said. “It's not historic.”
Others aren’t convinced such a move is necessary, and that razing what they see as an architectural gem without a clear plan for what happens to the site after would pose a huge risk.
“It's our seat of government,” Blackmon said. “You don't dispose of your seat of government like it is a disposable building.”
It’s possible to reinvigorate downtown Dallas without tearing down City Hall, said Zaida Basora, an architect and co-leader of the Save Dallas City Hall Coalition. A proposal put together by architectural students at the University of Texas at Arlington shows that new high-rises, hotels and arenas could theoretically fit into the section of downtown occupied by City Hall without demolishing the building.
“There’s room for everybody,” Basora said.
Dallas' name still carries weight
The Dallas name still has power, business groups said. It’s what created the city’s burgeoning financial sector, luring the Texas Stock Exchange and a raft of the country’s biggest financial firms to the city including Goldman Sachs, whose home in Uptown Dallas will become the financial giant’s largest presence outside New York City. Morgan Stanley is weighing a $1.3 billion office tower that would bring 4,800 jobs to Dallas proper.
Boosters see areas where Dallas outshines the suburbs, including in its presence of the arts and neighborhood character that can’t be found in the suburbs.
“We have a diversity of communities and neighborhoods in Dallas that they don't have in other communities,” said Linda McMahon, executive director of Dallas Economic Development Corporation.
There are also signs that the city’s population is ticking up this year. Population estimates from the North Central Texas Council of Governments, the agency in charge of transportation planning for the region, project the city’s population has surpassed 1.4 million as of Jan. 1.
The convention center is getting a major renovation. Signs of vitality, too, abound. Kay Bailey Hutchison Convention Center is undergoing a $3.8 billion overhaul. A half mile away, the Dallas Farmers Market boasts more than 1,800 apartments and 200 townhomes as well as restaurants and shops.
The city’s newest deck park, the name for a greenspace built over a freeway, opened in May in southern Dallas over a portion of Interstate 35. Since then, the 2.8-acre Halperin Park has hosted a Fourth of July celebration along with musical performances and classes.
The park came about as a way to restitch a community divided when the highway was first constructed and bring renewed vibrancy to the community, said April Allen, who led the effort to build the park and now oversees it. The hope is that the park is also a proving ground for development in southern Dallas, which has long gone underdeveloped.
Allen said she’s bullish on Dallas.
“I don't think the future of our city is going to be decided by whoever's leaving,” Allen said. “It's really going to be shaped by the people that are here, the places that we're investing in, and the momentum that we're creating.”
Officials and the city’s boosters admit that the city needs to be proactive to sustain the momentum Allen speaks of and to offset the big-name economic departures and population drop. Waiting-and-seeing is what can kill cities.
”We don’t want to wait 10 or 15 years to where we’re circling the drain to deal with it,” Jenkins said.
Disclosure: AT&T, Goldman Sachs, Linda McMahon and Texas A&M University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in The Texas Tribune's journalism. Find a complete list of them here.
This article first appeared on The Texas Tribune.
