Houstonians do not have to look hard to see that it is boom times for property development. The Texas Workforce Commission reported that the metro area gained a robust 150,000 jobs in the first 11 months of 2022, which is one of the best for metro area job creation. Hewlett Packard opened its new headquarters, there are new tunnels beneath land bridges, and the University of Houston opened an $80 million college of medicine building. There is a long list of recent developments that are nearing completion.
Some real estate investors may be concerned that this kind of record growth is not sustainable, but the same economic drivers that fueled the last few years should continue to do so in the coming years. Here are six reasons why:
- Economy: We mentioned the jobs numbers, but it should be no surprise since the metro area regularly outpaces the national average. Major industries include aerospace, manufacturing, petrol-chemical and Health care. The city’s business-friendly regulations attract national and international businesses and entrepreneurs that help continue the rise.
- Diversity: The population boom is diverse, attracting people from across the globe and from all walks of life. Development is not a one-size-fits-all solution, and developers can cater to various market sectors, including those just emerging.
- Prices going up: Despite the significant growth of developments in recent years, property values continue to climb throughout the metro area. The across-the-board growth means the developers can address the diverse demographics, knowing their investments will increase in value.
- Land: Unlike New York, San Francisco and Seattle, which have geographic challenges that force density, the Houston metro area still has parcels of land available for large-scale projects like mixed-use developments, commercial complexes and residential communities.
- Regulation: Houston’s zoning and planning regulations are lenient, simplifying the approval and permit process. The city also does an excellent job of offering incentives to developers.
- Infrastructure: The abundance of space and lenient regulation has made creating the infrastructure necessary to support business and residential development easier.
Some issues are unavoidable
Houston is open to development and makes it easier, but big projects involve millions in financing, various stakeholders, and legal paperwork. Real Estate attorneys are essential in ensuring that the different moving parts work together. This role only increases if the investors are not Texas-based.