Page 26 - NRH FY20 Approved Budget

BUDGET OVERVIEW

Economic Overview

The economic climate in North Richland Hills has remained steady through the past year.
Businesses had a net gain of 46 in 2018 and are currently at 38 for 2019.This is a solid increase
from the net gain of 30 in 2017. Notable businesses that have opened or will open later this year
are Alamo Drafthouse, Brutal Beerworks, and Sweetie Pies Ribeyes. NRH remains a favorable
climate for business and steady uptick in business growth illustrates that. These new additions to
North Richland Hills add to the already diverse business lineup.

Taxable sales in the city have remained steady but are flattening at this time. The shift from
traditional brick-and-mortar stores to online sales is changing the economic landscape. Over the
next several years there will be additional fallout from this change in retail shopping habits.
Additionally, the effects from the U.S. Supreme Court case South Dakota v. Wayfair verdict will
also come in to play. This case ruling opened the doors for states to require out-of-state sellers to
collect online sales tax. These tax dollars will begin coming into North Richland Hills later this
year. It is unclear at this time how much these sales tax dollars from online sales will be.

Texas has become a very diverse business climate over the last twenty years. This diversity of
industry coupled with economic incentives has created a favorable environment for jobs and has
greatly affected the growth of North Texas. The unemployment rate in Texas has been steadily
falling for the last decade. At this time the rate is 3.8% and dropping each year. This low
unemployment rate shows the favorable economic climate in Texas.

With the large amount of businesses relocating to North Texas there has been a very large
increase in residential home values. The low amount of available home inventory and the increase
in population has caused an accelerated growth in values. Over the last two years there has been
a 20% increase in residential home value. The average MLS sold value was $268,000 in 2017,
and has increased to $320,000 in 2019. At this rate the sales value for existing homes is inching
closer to the average new home construction price of $350,000. As new single family residential
homes have remained steady for 2019 North Richland Hills can expect to see additional growth
in the property tax base. New multifamily starts have increased quite a bit over the last year due
in part to the scarcity of homes in North Texas and the need to house new residents.

Data suggests that by 2024 the population of North Richland Hills will be past 75,000 residents.
This is due in large part from the new single family and multifamily residences that are being
constructed at this time. The continued work of city staff and council has led to the successful
redevelopment of key areas in NRH. The finalization of the Vision2030 plan will have lasting
impacts on the city and the ability to grow for years to come. New construction linked to the Transit
Oriented Development and the new TEXRail service will bring exciting new opportunities to North
Richland Hills.

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