Highland Lakes population explosion heralds community changes

SMALL TOWNS, BIG CHANGES: A series on the impact of development and population growth on the Highland Lakes.

Some numbers of note: About 4,100 people moved to Burnet County over the past three years, representing 7.75 percent of the county’s growing population of 51,000 (as of June 2023). The average household income of these newcomers is around $26,000 more a year than the average household income of a longtime resident. The average home price in Marble Falls has doubled since 2017, while thousands of acres of ranchland have been subdivided into new neighborhoods with questionable access to water. 

That’s just a peek at the downside of rapid growth. 

On the upside, all municipalities in Burnet County are seeing increases in sales tax returns from the Texas Comptroller’s Office, which takes the pressure off of property taxes when it comes to city budgets. For example, in Marble Falls (pop. 7,227), the retail center for Burnet, Llano, and Blanco counties, sales tax revenues rose 64 percent from 2018 to 2023. 

Whether good or bad, all of these examples are signs of a massive economic growth spurt that swung into high gear in the Highland Lakes during the pandemic in 2020. 

Two Burnet County officials in the midst of dealing with dynamic growth agree that it comes with a cost, but whether or not the price is too high is up for debate.

Marble Falls Economic Development Corp. Executive Director Christian Fletcher welomes the changes.

“I see more positives happening in Marble Falls than I see negatives,” said Fletcher, who has lived in the area for almost four decades.

Burnet County Development Services Director Herb Darling, who was born and reared in the county, sees people like himself struggling to keep up with the changes, which he believes threatens the community’s identity.

“When I started this job with Burnet County (28 years ago), cows outnumbered people three to one,” Darling said. “Now, people outnumber cows three to one. I love Burnet County with all my heart, but Burnet County is gone. We’re losing the way of life that we’ve had.”

Darling’s office, which handles development in unincorporated areas, has platted more than 15,000 acres since August 2021. In 2022, the department created 1,450 new addresses and recorded $200 million in new construction. Over a three-year period, the number of wells drilled in Burnet County increased by 84 percent from 234 in 2018 to 432 in 2021.

This past June, Darling was forced to recommend approval of a subdivision near Briggs despite major concerns over long-term water availability. Burnet County commissioners had to OK the plat against their better judgment because the new development met the minimum requirements of state law.

“Land has a carrying capacity, whether it’s cattle or people,” Darling said. “There are only so many resources. There are a million things you can point a finger at, but the main thing is water.”

According to statistics cited by both officials, most of the newcomers are coming from Travis and Williamson counties, which are also seeing exponential growth. The Austin metropolitan statistical area, which includes Bastrop, Caldwell, Hayes, Travis, and Williamson counties, grew from a population of 1.7 million in 2010 to 2.2 million in 2020, a 33 percent increase in 10 years. The 2023 population estimate is 2.35 million, according to the latest figures from the U.S. Census Bureau.

Wherever they are coming from, most of Burnet County’s new residents are arriving with significantly more dollars than locals, while many lower-earning households are leaving.

The average annual household income of these new residents in 2020-21 was roughly $120,000 a year, compared to the average household income of Burnet County households, which was about $94,000, according to IRS figures. In that same timeframe, the county saw an exodus of 1,710 Burnet County households with incomes averaging $66,000.

The current estimated household income in Burnet County has risen since 2021 to about $99,000, a slight boost due to higher-earning residents moving in and lower-earning residents moving out.

Coupled with rising housing costs, income inequality is making it harder for locals to afford to stay in their hometowns, both Fletcher and Darling said.

“Burnet and Llano counties have historically been the two least-affordable counties (in Central Texas) as a ratio of income to house value,” Fletcher said. “It’s always been that way, but it’s gotten a lot worse since the pandemic. People with higher incomes drove demand (for housing), for which we didn’t have supply.”

New residents are willing to pay top dollar for a slice of paradise and are buying homes in master-planned communities such as Gregg Ranch and Thunder Rock on the outskirts of Marble Falls. The average price of a home in Marble Falls has more than doubled in the past six years from $215,000 in 2017 to $443,000 in 2023, but local wages have not kept pace.

“Regular folks can’t afford (the changes),” Darling said. “I think we’ve got a lot of people that work in Marble Falls but can’t afford to live here.”

According to Fletcher, the people who can afford the homes in these new master-planned communities, with houses hovering around $400,000 or more, are making their money elsewhere as remote workers or they’ve already made their money and are looking for a place to settle down. 

He called the trend “exurban migration,” referring to urban residents seeking smaller communities where their dollars go further.

This leads to one of the upsides of medium- to high-income newcomers. 

As the economic heart of the Highland Lakes, Marble Falls reaps the biggest benefits in the form of sales tax revenue. In the city’s 2022 budget, sales tax accounts for $8 million in revenue compared to $2.6 million in the city’s slice of ad valorem taxes. 

“I know that sales tax represents the largest revenue stream for the city, so it’s critically important,” Fletcher said. “If we’re talking about the EDC, we wouldn’t exist without sales tax revenue.

Burnet sales tax collections are also on the rise, but without Walmart, The Home Depot, and other big-box stores, the smaller town (only by 551 people at 6,676) has no way to compete with its sister city in the south. From July 2022 to July 2023, sales tax collections in Burnet increased to $2.12 million from $2 million, a 2.93 percent jump. The city will receive a check for $315,466.85 for its July sales, but its main source of revenue is still property tax collections, which represents $2.9 million in the current budget. 

Sales tax revenues will be needed by both cities for infrastructure improvements necessary to keep up with the demands for water, wastewater treatment, and improved traffic flow.

No numerical values are available for the more ambiguous threat of unprecedented migration from urban to rural: preserving community culture. 

When Darling was asked what it would take for someone to quickly become integrated into a community, he made an important distinction between who is buying homes here and why.

“People look at homes in different ways,” he said. “They may see it as a place to live, or they may see it as a way to make money. I think people could move in overnight and be a part of the community if they want to.”

On this, Fletcher agreed.

“There were communities that were steamrolled by Austin’s growth that don’t have any identity anymore,” he said. “We’re going to fight to maintain some charm and character as much as we can.”

dakota@thepicayune.com