NCPA - National Center for Policy Analysis

Houston Creates Jobs, Boasts Low Housing Prices

July 18, 2014

The city of Houston, Texas, has had remarkable economic growth over the last two decades, write Joel Kotkin, fellow in urban studies at Chapman University, and Tory Gattis of the Houston Strategies blog, making it an attractive destination for job-seekers and families.

Newcomers are flocking to Houston for its low cost of living and high job growth:

  • Of all major cities, Houston will see the largest growth in new households between 2014 and 2017, according to estimates from technology company Pitney Bowes.
  • Greater Houston's population grew by 35 percent between from 2000 to 2013.
  • By 2050, both Houston and Dallas-Fort Worth will be larger than Chicago.
  • Houston has added more than 600,000 jobs since 2000. Since early 2008, the city has added 263,000 new jobs.
  • New York City, on the other hand, which boasts a much larger population, has added just 103,000 jobs since 2008.

Houston has seen a huge increase in mid-skilled jobs in areas such as manufacturing and logistics, with many positions paying six-figure salaries. Of the 52 major metropolitan areas in the country, Houston has seen the largest growth in mid-skilled jobs, growing at 6.6 percent each year. At the same time, mid-skilled jobs have dropped by more than 10 percent in New York, Los Angeles, Chicago and San Francisco.

While the energy industry has added 67,000 jobs in the Texas city and employs 240,000 people, Houston's growth is the product of policy choices, not merely oil.

  • Without formal zoning laws, land use can meet demand quickly. Developers can get building permits quickly, without approval boards slowing -- or halting -- development.
  • Neighborhoods easily adapt to the lack of zoning rules with voluntary deed restrictions that allow homeowners to opt-in to constraints.
  • Housing prices are low in Houston, thanks to this regime. On a square-footage basis, the same amount of money can buy seven times as much space in Houston as in San Francisco and over four times as much space as in New York.

Kotkin and Gattis warn that transplants from the East and West Coasts may bring their preferences for more highly regulated environments with them.

Source: Joel Kotkin and Tory Gattis, "Success and the City," Wall Street Journal, July 14, 2014. 


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