Page 21 - N. Richland Hills General Budget

BUDGET OVERVIEW

Economic Overview

The economic climate in North Richland Hills is currently in flux as it is across the country due to
the COVID-19 pandemic. Unemployment is up, consumer confidence is down, interest rates are
down, consumer prices are down, and spending for both consumers and businesses is shifting.
With all of the uncertainty due to COVID the rate of recovery for the economy is unknown.

Development trends show that permits for new construction, remodels, and commercial permits
are slightly down from previous years. Of the estimated 110 commercial permits expected to be
issued by the end of FY 2020 80% of those are remodels or renovations. NRH has had the most
single family starts in Northwest Tarrant County for the past 4 years. Residential growth continues
to be strong in NRH with 1,526 platted and 457 permitted lots as of December 2019. Another
1,069 spots remain to be developed in the City’s 15 growing subdivisions.

Resale property values are up when compared to data from June of 2019. For the 76180 zip code
the median list price of homes is up 3% and 2% for median list price per square foot. For the
76182 zip code the median list price is up 2% and the median list price per square foot is up 8%.
However, for the 76182 zip code the days on market metric has risen by 19 days to a total of 52
days. For the 76180 zip code the days on market has been reduced by 2 days to a total of 44
days. Historic low mortgage rates spur buying while preserving values. The future of this sector
is contingent upon the pandemic and the economy.

In October of 2019 the Texas Comptroller’s ruling went into effect which allowed for the collection
of sales tax from third party sellers doing business in other states. This data showed a three times
increase in NRH’s taxable sales for third party sellers. This is the annual equivalent to a new
Sam’s Club location or roughly 2.5% of the City’s current taxable sales. There was also a sharp
increase in taxable sales for third party sellers in April due to the pandemic and social distancing.

The data for brick and mortar sales shows a very different story than that of third party sellers.
There was a 1.5% annual increase pre-pandemic followed by a sharp decline. There has been a
two month decline at the time of this publication. Online sales tax collections have gone up but
physical locations have seen an overall decline. The only business sectors that have seen positive
growth from the pandemic are grocery stores and home improvement. All other sectors of
business have taken a hit.

In 2020 we saw several companies leave in NRH. Arby’s, Anna’s Fried Chicken, Lazyboy,
Grandy’s, Hobby Lobby, and 24 Hour Fitness all closed their doors. We had several key
businesses join us. Enchiladas Ole, Popeye’s Chicken, Sweetie Pie’s Ribeyes, Kahunas, False
Idol Brewery, Berry Best BBQ, and Pho V all opened this year.

The unknown for the next year will be the pandemic’s effect on NRH and what recovery will look
like. Vast residential development is in the pipeline and they are backed by stable property values.
Further development of online sales and taxable collections will also help the City adapt to the
new retail climate. There will be continued pressure on brick and mortar establishments,
specifically retail and dining.

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