The WSJ profiles my newly-adopted hometown of Houston, and why it has been such an economic engine:
A host of newcomers—immigrants and transplants from around the United States—agree. The city’s low cost of living and high rate of job growth have made Houston and its surrounding metro region attractive to young families. According to Pitney Bowes, PBI +2.11% Houston will enjoy the highest growth in new households of any major city between 2014 and 2017. A recent U.S. Council of Mayors study predicted that the American urban order will become increasingly Texan, with Houston and Dallas-Fort Worth both growing larger than Chicago by 2050.
Houston’s economic success over the past 20 years—and, more remarkably, since the Great Recession and the weak national recovery—rivals the performance of any large metropolitan region in the U.S. For nearly a decade and a half, the city has added jobs at a furious pace—more than 600,000 since early 2000, and 263,000 since early 2008.
The much more populous greater New York City area has added 103,000 jobs since 2008, and Los Angeles, Chicago, Phoenix, Atlanta and Philadelphia remain well below their 2008 levels in total jobs. Los Angeles and Chicago, like Detroit, have fewer jobs today than they did at the turn of the millennium.
In my experiences, one of the greatest advantages of this City is the low cost of living compared to other large cities, such as New York or San Francisco.
Many of Houston’s jobs pay well, too. Using Praxis Strategy Group calculations that factor in the cost of living as well as salaries, Houston now has among the highest, if not the highest, standard of living of any large city in the U.S. The average cost-of-living-adjusted salary in Houston is about $75,000, compared with around $50,000 in New York and $46,000 in Los Angeles.
Money goes much, much further here. And, the article stresses how the city’s lack of a zoning code makes development so much easier.
Houston’s growth is more than oil-industry luck; it reflects a unique policy environment. The city and its unincorporated areas have no formal zoning, so land use is flexible and can readily meet demand. Getting building permits is simple and quick, with no arbitrary approval boards making development an interminable process. Neighborhoods can protect themselves with voluntary, opt-in deed restrictions or minimum lot sizes.
The flexible planning regime is also partly responsible for keeping Houston’s housing prices relatively low. On a square-foot basis, according to Knight Frank, a London-based real-estate consultancy, the same amount of money buys almost seven times as much space in Houston as it does in San Francisco and more than four times as much as in New York. Houston has built a new kind of “self-organizing” urban model, notes architect and author Lars Lerup, one that he calls “a creature of the market.”
Housing-market flexibility has also benefited some of the city’s historically neglected areas. The once-depopulating Fifth Ward has seen a surge of new housing—much of it for middle-income African-Americans, attracted by the area’s long-standing black cultural vibe and close access to downtown as well as the Texas Medical Center. Rather than worry about gentrification, many locals support the change in fortunes. “In Houston, we don’t like the idea of keeping an image of poverty for our neighborhood,” explained Rev. Harvey Clemons, chairman of the Fifth Ward Community Redevelopment Corporation. “We welcome renewal.”