Learning To Love DFW Cities And Securing Water Rights Are Main Ingredients In MPC Recipes

Water rights have emerged as a major battleground for control of Dallas-Fort Worth's growing master-planned community market.

Some North Texas cities have plenty of water, while others don’t, but either way, it’s a vital need in the development of master-planned communities. Water was chosen as the biggest topic to keep an eye on over the next 12 months by panelists at Bisnow's 2026 DFW Master-Planned Communities event.

“We pride ourselves in Texas on the growth that we have — beautiful projects — but without water, that stops,” Centurion American Development Group Vice President Sean Terry said during the Feb. 17 event at the Southfork Ranch Conference Center in Parker.

The passage of Senate Bill 2038 in 2023 ultimately allowed developers to build outside a city’s extraterritorial jurisdiction and avoid local zoning restrictions. That has led to huge master-planned communities being constructed in cities such as Anna, Celina, Forney and Prosper.

But it's also led cities to use water rights as the line in the sand to regain zoning control on these projects.

Terry said it’s getting harder for projects to get water, so developers have to be willing to work with municipalities and special utility districts to secure it.

Developers can also get creative by drilling wells or finding water in some other way, though that doesn’t always work, Brookfield Residential Vice President of Land Darrel Amen said.

“I feel like every time I turn around, somebody says, ‘Just drill a well,’” Amen said. “Well, it's not that easy, and you could have millions of dollars sunk in before you realize it might not be a feasible solution.”

MA Partners CEO John Marlin said his company had a municipality go back on its assurance that it could provide water. Instead of taking that kind of statement as fact, he encouraged developers to “look behind the curtain” and confirm cities have the water needed for a master-planned community. 

For MA Partners’ bigger projects, Marlin said the company often incorporates a water tower into its plans to get ahead of any supply issues.

The 59-billion-gallon Lake Ralph Hall in Fannin County was supposed to be a major solution to the region’s water issues, but Terry said the reservoir won’t have the impact that was expected when construction started on the project in 2021. 

Lake Ralph Hall is expected to deliver around 54 million gallons of water per day to 29 North Texas communities once it is finished this year, but Terry said that won’t be enough to meet the region’s needs as the growth north of DFW has surpassed expectations. 

Due to that growth, he said some cities are considering regulating potable water use for outdoor watering. 

“We're going to be sitting here in three to five years having that discussion of how all of our builders had to change and put in an extra meter to be able to monitor that,” Terry said.

The panelists stressed the importance of working with municipalities since master-planned communities are often built where water and sewer services typically don’t exist. It often falls to developers to figure out how to get those set up, Main Square Development President Hugo Morales said.

"Permitting is essential," he said. ”As you develop your community, you have to build those relationships with the city around you. They can make you or destroy you.” 

When building those relationships, Morales stressed the importance of bringing answers to officials as they don't always have the budgets or the knowledge to solve problems.

City council members can change so quickly in some North Texas cities that Terry said Centurion American spends a lot of time educating new members about what master-planned communities can bring to the area. The company also tries to keep council members updated on the benefits of the various public financing agreements that are often signed between developers and municipalities.

Those include municipal utility districts, public improvement districts, Chapter 380 agreements and tax increment reinvestment zones.

These creative financing packages are essential to maintaining the growth that cities across North Texas have experienced, Terry said. DFW's population has grown by nearly 36% since 2010, and the region is on pace to overtake Chicago as the nation’s third-largest metro in the next decade.

“We've seen such tremendous growth that the small municipalities that we all get to work with, they just weren't ready for the growth,” Amen said. “We got there before they were expecting us.”

Samco Capital Markets Managing Director Michael Libera said there isn’t a one-size-fits-all approach to public financing agreements, as large master-planned communities often require significant innovation in the capital stack. 

That’s why it’s very difficult to do any sizable project without some sort of special financing agreement, Marlin said. And the projects definitely wouldn’t be as enticing to homebuyers without such agreements.

“Without that, we would not be able to hit the price points that the homebuyers absolutely have to have,” Marlin said.