Small Towns, Big Growth: How Princeton Fought For Every Inch Of Its Rapid Expansion

Every town has a story to tell and nowhere is that more true than in the rapidly changing and growing Dallas-Fort Worth area. This story is part of our bimonthly limited series Small Towns, Big Growth, which will profile communities undergoing rapid expansion.

In many ways, Princeton is similar to a lot of its Collin County neighbors. Northbound migration from Dallas’ urban core paired with a rush of companies moving into the region from out of state have caused this once-rural community’s population to grow by more than 150% in the decade leading up to 2020.

But in one very important way, Princeton stands out among the rest. It is the only general law city of its size in Texas, meaning it never passed a home-rule charter and must therefore follow state laws rather than setting rules of its own. City Manager Derek Borg said residents of Princeton have rejected a home-rule charter four times over concerns of annexation despite the fact that a 2017 law made involuntary annexation illegal in Texas.

The consequence of failing to enact a charter is that it forces an extra layer of compromise when Princeton officials meet developers at the negotiating table. Home-rule charter cities have some level of control over the development that happens in their extraterritorial jurisdictions, but Princeton does not, Borg said.

“We have to fight for every inch of expansion,” he said. “Developers have more leverage with Princeton than they do with Melissa or Anna.” 

A lot rides on Princeton’s ability to convince a developer to partner with the city rather than create a municipal utility district outside its perimeter. MUDs use the sale of bonds to fund infrastructure for new developments, but Borg said the city is still required to provide some services. Still, property taxes generated by homes and businesses in a MUD are not paid to the city. Instead, they are used to repay the bonds sold to fund infrastructure in the district.

“We have to come to the table and see what we can do to bring them into corporate limits, because it’s very possible that our police and fire are going to provide services there, and we are mandated by our CCN requirements to provide them water and sewer,” Borg said. “If we aren’t able to negotiate to bring them into the city, then it’s quite possible we’ll never get any property tax out of that forever.”

Annexations are required to be contiguous, which means if a developer forms a MUD outside of city limits, Princeton is prevented from ever annexing land beyond that development, even if residents in that area want to be brought into the city. 

Because of this, Princeton works closely with developers to identify alternative financing mechanisms. In the case of the single-family Eastridge development, the city was able to negotiate a property improvement district. PIDs, unlike MUDs, use city- or county-issued tax to fund infrastructure, but they can also be used to pay for things like sidewalks, landscaping, and parks and recreation, according to the Collin County Association of Realtors.

“We have a great finance team that can really be creative and structure finance plans that are attractive to the developers and allow them to throw in some perks that they might not have been able to put in on the front end in their MUD district,” he said.

Another major project that would not have been possible without a PID is Princeton Crossroads, a 297-acre, mixed-use development straddling U.S. 380. The developer, IC-SB, worked with the city to bring wastewater services to the site, which at completion will include single-family and multifamily homes, retail and restaurants, and entertainment. The project is also home to Princeton’s new municipal center and park.

Investments by the private sector are essential to accommodate the growth in Princeton, which has been exponential in recent years. Since 2012, Princeton has seen a 416% increase in new home starts and a 65% increase in median home prices, according to Weitzman, which oversees leasing at Princeton Crossroads. By 2050, the city’s population is projected to grow to nearly 80,000 residents.

Alvin Johnson, president of McKinney-based nonprofit Hope Housing Foundation, said explosive growth in Princeton is what led him to develop Northgate Apartments, a 400-unit workforce housing project that broke ground in early March. 

“The smaller cities celebrate us rather than tolerate us,” he said. “We’re bringing a lot of growth to their city, a lot of tax base, and they’re welcoming that as new developments come online.” 

With Northgate, Johnson is targeting residents making 80% of area median income or less, which in Princeton is $76K per year. The project will be built with structural insulated panels, a material that mitigates airborne illnesses by keeping units airtight, he said. 

“This particular project will be the largest structurally insulated panel community in the United States once it’s done,” he said.

Aisha Waheed with Gracious Enterprises is another developer looking to bring density into Princeton. Her project, Yorkshire Apartments, would add 24 units and ground-level retail to downtown Princeton, which is another area of focus for the city.

“Looking at the face value of downtown today … there’s not much there,” Waheed said during an Economic Development Corp. meeting in November. “My vision for the retail is to bring business into Princeton [and to] downtown.”

These types of projects will help Princeton grow its local workforce, which Borg said is a priority for the city’s Economic Development Corp. The city’s comprehensive plan, adopted in 2019, indicates 85% of Princeton residents commute elsewhere for work. The city has seen its building permits for single-family homes grow year-over-year, but Borg said a healthy balance of density is needed to keep more residents working in the city.

One of the ways the city seeks to build its employment base is through its 108-acre Princeton Business Park, which is owned by its EDC and includes sites for industrial, flex and office uses. Borg said the park is about 50% occupied.

Looking to the future, Borg said the city is focused on growing its sales tax base by bringing in more commercial businesses. The city still lacks a full-service grocery store, and he said residents want more dining options.

Despite Princeton’s rapid growth, preserving its small-town feel is at the forefront of every conversation Borg has with developers. The lack of a charter forces a higher standard of flexibility, but Borg said he holds true to Princeton’s vision, which, per the comprehensive plan, is "to possess all of the amenities of a modern city with the close-knit feeling of a small town."

“If we're going to offer some sort of financing, we want to make sure the product is elevated, is different from some other developer’s project,” he said. “In that regard, we have the opportunity to guide the project, rather than just accept what's coming in.”