This story originally appeared on Texas Public Radio

In many ways Fredericksburg hasn’t changed. The German founders of the town named the streets crossing Main Street so that the first letters spell out “All welcome.” When you drive in the other direction, the street signs spell out “Come back.” Mike Starks is a Realtor and also serves on the Gillespie County Economic Development Commission.

“We’re only a town of 10,000. Before long you just know everybody in the store. If you have problems with your car, someone’s going to stop and pick you up and take you where you want to go. You go into Dooley’s Five and Dime; the little ladies speak German there,” Starks says.

This, the shops on Main Street, and Fredericksburg’s 30 or so wineries are what the town has built its tourism industry around. And it’s why out-of-towners with money are buying property here in record numbers. And that is how Fredericksburg has changed.

“A lot of homes that would fill the need of a lower income or working-class guy very often are bought up as a second home,” Starks says. “Just your typical little two-bedroom 1940s house close to Main Street. That’s a very attractive thing for somebody to buy who lives in San Antonio or Dallas or Houston, just to use as a weekend house for when they come to town.”

In 2015, nearly half the buyers moving to Fredericksburg paid cash for their houses instead of taking out loans.

Starks says the average price of a house in Fredericksburg grew to nearly $297,000. That’s a 15 percent increase in just one year. Currently, there are only three homes in Fredericksburg selling for under $200,000.

“I’ll have a new police officer or a nurse at the hospital who’s just moved to town, and they’re actually making good money, but when they come in looking for a home to purchase, a lot of times it’s just not possible,” he says.

John Rauschuber, Director of Fine Arts at Fredericksburg High School, says, “Fredericksburg’s such a desirable area to live. They have lots of beautiful homes, and lots of things to do, so we really wanted to relocate here.”

Rauschuber’s wife also teaches at the school. They had owned a house in San Antonio that was a little over 2,600 square feet. He said they paid about $270,000 for it.  When they learned a similar house in Fredericksburg would run $400,000 or more, they bought a home that would fit their budget in Kerrville, which is 20 miles away.

“It was a little bit heartbreaking because we really wanted to live in this community to be near all of our students and our families that we’ve grown to know here while teaching here,” he says.

Rauschuber says a first year teacher in Fredericksburg earns a little over $40,000 a year. If you’re an athletic coach or lead activities like band choir, you can earn an additional stipend. He also says quite a few teachers at the school commute from San Marcos, Boerne, San Antonio, and even Wimberley, an hour-and-a-half away.

But not everyone is willing to commute. And that’s caused a shortage of workers in one of Fredericksburg’s biggest industries – tourism.

Tim Dooley owns Dooley’s 5, 10 and 25 Cents Store on Main Street. The store was first opened by his grandfather.

“The community is pretty much at full employment. Anybody that really, really wants to work can find a job. So from my perspective as an employer, when I see people walk in my door, cold, looking for a job, I begin to wonder, where all have they been and why aren’t they working,” Dooley says.

Tim Lehmberg, with the Gillespie County Economic Development Commission says the worker shortage has reached, “epidemic proportions.”

“Three years ago, we put together a small group that’s now a larger group, and we call ourselves the Local Labor Task Force. We identified what we thought were the five biggest contributors to our labor shortage. And of course the elephant in that room is housing,” he says.

“The downside is I know we have employers in Fredericksburg that are employing workers that they probably wouldn’t if they had a better selection. And sometimes it doesn’t translate to the best service,” Lehmberg says.

So what are they doing to fix the affordable housing issue?

“Some of our larger employers are looking at developing their own housing as a way to recruit and retain good quality employees,” Lehmberg says. “We’ll get through this. But we may lose opportunities, to be quite frank, if we don’t fix it and get some relief.”

Starks, the Realtor, doesn’t see an easy solution either, and he’s tired of delivering bad news to prospective home buyers.

“Who doesn’t want to own their own home where they live?” he asks.

He knows he’s selling an American Dream that not everyone in Fredericksburg can afford.

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