NCPA - National Center for Policy Analysis

Houston Prospers Under Easy Regulations

July 1, 1999

Houston is one of the nation's fastest growing cities and has been creating jobs at a sizzling pace -- nearly 100,000 last year. Its secret, many analysts conclude, lies in sensible restraints on regulations.

For example, many cities try to control the pattern of growth through their control of water line construction. But in Houston's suburbs developers set up municipal utility districts, or MUDs. Once a developer has done that, there are few restrictions on which way he can develop.

MUDs are reportedly a big factor in keeping housing costs low.

The American Chamber of Commerce Researchers Association has developed a scale to annually assess housing costs in America's big cities. The lower the number, the lower the costs.

  • In 1997, Houston's score was 82.3 -- with Dallas earning 96.3.
  • Outside of Texas, Los Angeles scored 124.7 and Boston got 214.8.
  • New York's score was a whopping 455.6.

Houston is also the only major American city without comprehensive zoning. Thus, office space in the city's central business district rents for $13.02 per square foot -- well below the national average.

Also, the North American Free Trade Agreement has been particularly kind to Houston. More Mexican goods are brought up to and shipped out of the Port of Houston than are shipped out of any port in Mexico.

Source: Aaron Steelman, "What Spurs Houston's Growth," Investor's Business Daily, July 1, 1999.


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