It has been over seven months, but people are still talking about the impact of Hurricane Harvey, and rightly so. It certainly left its mark on Houston, both in its damaging effects, and in the way that it showcased the strength of our city and the bond shared by the people who live here.
While relocation activity into the Houston area experienced a dip in activity in the months that followed, it looks like there might be more movement on the horizon.
When it comes to evangelizing the positive message about Houston, perhaps nobody does a better job than the Greater Houston Partnership (GHP). According to Jason Ford, GHP’s vice president of Regional Economic Development, Houston continues to be a top draw for companies when it comes to corporate relocations and expansions.
“Ultimately, companies choose Houston due to three principle factors: we have a large pool of young and diverse STEM (Science, Technology, Engineering, Mathematics) talent; our global access; and because of our low cost in business, and the low cost of living and lifestyle,” Ford said.
The low cost of living aspect is a critical one when companies consider a new location, particularly if the company will be relocating a large number of employees there.
Likewise, the real estate market, both in terms of strength and affordability, weigh heavily into the equation.
“Houston has historically competed very well as a low cost of living market, in addition to its low cost for doing business,” explained Ford. “Out of the 20 most popular metros, Houston ranks fifteenth in terms of cost. That means that Houston is cheaper than 14 of the largest metros in the country.”
He added, “When companies are evaluating their site location decisions, they are looking at a variety of costs for their employees. Clearly you can buy more housing in Houston for the money, and the low cost of living means that you can afford a more exceptional lifestyle, and a variety of lifestyles that perhaps you couldn’t afford in other markets.”
Surprisingly, even during the months immediately following Hurricane Harvey, the Houston real estate market remained strong and posted gains. By the close of 2017, the market even managed to set new records.
Ford noted that while Houston has seen some increases in housing prices over the last several years, that those increases haven’t been as steep as those seen in many other competing markets. This gives Houston a competitive edge when companies are comparing the housing costs of different cities.
He referred to Houston as a Tier 1 market with Tier 2 costs. He said that Houston is considered Tier 1 in terms of the population and economy, but that it competes very well with smaller Tier 2 markets, like Austin or Nashville, in terms of costs.
Even in light of Hurricane Harvey, Site Selection magazine named the Houston region the No. 2 metro in the nation for new and expanded corporate facilities in 2017.
“Despite hurricane Harvey, Houston finished on top, and we see this as a very positive sign that investors and companies see Houston in the long-term context,” said Ford. “Clearly, a lot of that is tied to the strength around our legacy industries of manufacturing and logistics, and in energy, but we are also seeing a noticeable uptick around technology, innovation, R&D, and life sciences.”
The GHP has seen a measurable increase in the number of high-tech and life sciences companies that are considering Houston. Growth in these two industry sectors is a top priority for GHP in terms of industry diversification.
Ford added that the GHP has seen some strong prospecting activity from companies that are looking at Houston, and he hinted that they are expecting several large announcements very soon.
While companies are actively looking at Houston, he said that it’s not only because of the resiliency that the city exemplified in the aftermath of Hurricane Harvey, but because of the ways that the city and its residents responded to the storm.
At the same time, Ford said that it is important for companies to understand that no matter where they relocate or expand their operations, that they are not immune to weather-related risks.
“In Houston, people know that they have a partner in neighbors helping neighbors, and companies know that they have a supportive community partner to keep their business running as profitably and efficiently as possible,” said Ford.
He added, “The Houston metro has 20 Fortune 500 companies, making it the fourth highest concentration of Fortune 500 companies in the U.S. We also have 41 Fortune 1000 companies, and 26 Fortune 2000 companies. So, Houston really is America’s headquarters city, and we continue to see companies recognize Houston as one of the great global cities in North America.”