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Waco has a small-town feel and has seen development downtown and along Lake Brazos explode, but some residents and small businesses feel prosperity has eluded them and housing is getting less affordable, according to an Austin-based consulting firm hired to examine the city’s positives and negatives.

Los Angeles and Chicago residents are making the move to Waco, but college graduates too often depart the city for Dallas-Fort Worth, Houston, Austin, Denver, Nashville, Charlotte, San Francisco and, perhaps surprisingly, Sioux Falls, South Dakota, TIP Strategies found. The firm presented findings Wednesday to the Waco City Council from months of interviews and research.

Council members generally praised the product, saying it reflects their attitude toward inclusivity and making Waco’s economy work for everyone.

The report recommends five areas of emphasis. Within those it makes specific suggestions such as expanding support to existing industries; developing a strategy to encourage development of new offices and headquarters; creating a strategy to enhance workforce skill; rehabbing downtown buildings and parking lots with a focus on publicly controlled properties; aligning work of the Greater Waco, Cen-Tex Hispanic and Cen-Tex African American chambers of commerce; and creating a more streamlined process to attract and grow development.

“Waco’s greatest strengths are its sense of place, community, and opportunities,” the report says.

But it also says stakeholders could better communicate Waco’s story to residents and those living outside the city.

Tension exists between growth and “preserving Waco as it is today,” according to the report. It says rising housing costs are putting economic pressure on more would-be homebuyers. The report encourages a “desire for equitable growth, ensuring that everyone can access economic opportunity.”

Included in the report is a Texas A&M University 2020 housing affordability study. It assumes a 5% down payment and a 5% interest rate on a 30-year mortgage. The index compares household median income to a typical mortgage payment on a median-priced home. A value of 1 indicates the median income is exactly enough to buy a median home.

The index shows housing statewide is affordable, the Texas A&M graph extending beyond 1, the break-even mark. The same holds true for the Greater Waco metropolitan area. Waco city limits was deemed unaffordable, but barely, its graph practically nudging the threshold.

Housing nationally is unaffordable, according to the Texas A&M study.

Waco has a diverse industry base, with education, health care and manufacturing employing the most people. But growth has been uneven the past five years. The report says professional services gained the most jobs during that period, while manufacturing lost the most, at about 1,800.

The period analyzed for growth by industry is 2016 to 2020. Since then, several companies involved in manufacturing have announced their intention to locate in Greater Waco, have started plant construction or started operations. The list includes Hello Bello, which makes diapers and other products for infants; Mexico-based Envases, which produces aluminum cans; AstenJohnson, which plans a facility near Texas State Technical College to make nonwoven fabrics; Uzin Utz, which produces products for the flooring industry; and Knauf Insulation, which broke ground on a manufacturing facility in McGregor.

Key challenges listed include housing inventory and affordability; retaining college graduates; having a supportive ecosystem for small businesses and entrepreneurs; creating workforce and job opportunity alignment; and coordinating economic development initiatives.

Waco Mayor Dillon Meek mentioned July Fourth and said the plan represents a framework “for bringing the American dream to everyone in Waco.”

Council Member Jim Holmes said its arrival coincides with Waco becoming a popular target for business and industry expansion.

“We can get more selective,” he said. “Here’s what we need. Let’s go after it. All Wacoans can share in that success.”

Council Member Alice Rodriguez wondered aloud if TSTC has become an undervalued asset, one that could address TIP’s finding that a “mismatch” exists between skills and jobs available.

Waco native Tracye McDaniel serves as president of TIP Strategies, which has offices in Boston, Austin and Seattle. Her involvement lends credibility to the report, Council Member Andrea Barefield said. TIP Strategies did well to track down and interview so many “thought leaders” in preparing its report, Barefield said. The firm reportedly interviewed nearly 200 people, including large employers, small employers, students, young professionals, developers and entrepreneurs.

TIP Strategies asked the council to provide formal feedback by July 8. Several council members mentioned previous meetings with TIP representatives. The report includes a timeline that mentions an “opportunity workshop” sometime in August to give the findings public exposure. Implementation is scheduled through October, with TIP Strategies and local economic development stakeholders crafting an action plan with annual goals.

Council Member Kelly Palmer said the report is a “masterpiece,” in reflecting the community and its components.

“I have friends from graduate school living in those places,” Palmer said, referencing communities attracting Waco’s young professionals.

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Mike Copeland is a Waco native who attended Baylor University and joined the Tribune-Herald in 1978. He's been covering local business since 1992.

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