1. CITY SYNOPSIS:
HOUSTON
Assignees moving
to Houston may find
the ever-expanding
urban sprawl of the
fourth largest U.S.
city overwhelming.
And with a wide
metropolitan area that
has a population of
more than 2 million
people, it can be easy
to get caught up in the
hustle and bustle –
especially when it
comes to the city’s
infrastructure, which
can cause problems
for commuters.
Nevertheless, the city
of Houston is on the
rise, and continues
to bring expatriates
toTexas for career
opportunities in a
variety of different
industries.
ABOUT HOUSTON
FACTS
> Country: United States
> Population: 2.2 million
> Climate: Humid subtropical
> Industries: Oil and gas, renewable energy,
aerospace, medical
> National languages: English
(secondary: Spanish)
> Nickname: Space City
> Dominant mode of transportation:
Automobile (72-percent)
ECONOMIC TRENDS
The oil and gas industry was responsible for
between 11.7-percent and 13.5-percent of the
economic activity in Texas in 2013, depending
on the analyst.1
The Texas economy has been on the rise for
the last several years. Due mainly in part to the
unconventional oil boom in 2014, the state’s
oil output had reached the highest levels since
1976, which sparked a surge in new home
construction, simultaneously increasing housing
costs in many metro areas.2
The volume of the oil oversupply and the
slow growth in the global economy forced
oil companies and international agencies to
re-evaluate year-end economic forecasts. Now
in 2015, most revisions predict the price of oil
is unlikely to reach $85 a barrel for at least 18
months to two years.3
As a result, oil companies
have started cutting their capital expenditure
plans for 2015.
This will undoubtedly have a negative effect
on the Texas and Houston economies. In fact,
the world’s three biggest oilfield service firms –
Schlumberger, Halliburton, and Baker Hughes –
have announced a combined 22,000 layoffs in
recent months. Those job cuts are worldwide,
but many are falling in Houston, where all three
companies have headquarters.4
INFRASTRUCTURE
IMPROVEMENTS
Houston’s ever-growing population requires
better infrastructure even as state funding
remains limited. However, long-term
infrastructure improvements are in the works.
In November 2015, Texans will vote on whether
the state should dedicate $2.5 billion in sales
tax revenue to help build and maintain roads.
If approved, lawmakers say the plan could
mean an additional $3 billion dedicated to
transportation funding by 2020.5
If passed,
work may begin in 2017, with construction
adding to travel delays for up to five years.
In June 2015, the Texas Department of
Transportation announced 13 roadway projects
were approved for funding to improve the state’s
stressed transportation infrastructure. TxDOT
has approved 75 of 200 proposed projects, and
if all the planned projects are approved, the
updates would include more than 800 miles of
refurbished highway lanes, nearly 500 miles
of new highway lanes, 114 widened bridges,
1
Chris Tomlinson. “Turmoil is coming to Houston area’s economy.”
Houston Chronicle, December 23, 2014.
2
Erin Carlyle. “America’s Most Overvalued and Undervalued Housing
Markets.” Forbes, June 8, 2015.
3
Chris Tomlinson. “Turmoil is coming to Houston area’s economy.”
Houston Chronicle, December 23, 2014.
4
Andrew Schneider. “In Houston, Falling Oil Prices Spark Fears Of Job
Cuts Beyond Energy.” NPR, March 2, 2015.
5
“Houston’s Mayor on Race, Roads, and Gay Rights.” Here and Now,
June 24, 2015.
Baker’sDozen
CustomerSatisfactionRatings
2015 Winner
RELOCATION
2. and 159 miles of new passing lanes on rural highways.6
With these
improvements will come untold delays due to construction and detours.
Additionally, ReBuild Houston, a city initiative to improve the quality
of life and mobility for residents, is gaining traction. To support the
initiative, the city has established a dedicated, pay-as-you-go fund to
maintain the infrastructure and plan upgrades to meet future needs
as the city grows.7
HOUSTON HOUSING
With the depressed oil prices of 2015 causing the energy industry to lose
jobs, the disparity between economic growth and housing costs isn’t likely
to get better in Texas cities any time soon. Houston is currently number
two on Forbes’ 2015 list of America’s Most Overvalued Housing Markets.8
Housing prices in Texas cities are unlikely to go down in the forseeable
future. Houston metro homes are currently overvalued by about
18-percent.9
Meanwhile, Houston’s existing-home market bounced back
up in March 2015, registering a 3.6-percent increase in completed sales
from a year ago and a 30.6-percent spike in pending sales.10
As for apartments, rent growth across the Houston region has been
relatively stagnant in recent months, according to Apartment List. In
May, rents grew only 0.2-percent, below the national average. The median
price for a two-bedroom is $1,260. Apartment List also notes that Houston
received the lowest scores in Texas, lagging behind Austin, San Antonio,
and cities in the Dallas metro area. This may be because the U.S. renter
population is extremely large, and is concerned with factors such as crime
rate and access to recreation. So Houston’s low scores may be hindering
its ability to attract this demographic.11
COST OF LIVING
The energy capital of Texas is home to more than 20 Fortune 500
companies, and apart from oil and gas, sectors like IT, business services,
aerospace, medical, and biotechnology attract workers from around
the world. Whether moving to Houston with children or relocating on
their own, expats can enjoy the relatively low cost of living.12
Cities in the U.S. climbed dramatically in the cost of living ranking due
to the strengthening of the U.S. dollar against other major currencies.
The findings of the 2015 Mercer Cost of Living Survey placed Houston
up 51 places since 2014, but it is still listed among the less expensive
cities in the U.S. surveyed for expatriates.13
The cost of living in Houston is currently 10-percent lower than
the national average. Cost of living is greatly impacted by the price
of housing. Despite being overvalued, housing costs in Houston are
at 22-percent less than the national average.
Houston has a lot to offer in the form of entertainment. Downtown
Houston has many options for casual and fine dining, a theater district
with nine major performing arts centers and six performance halls,
and major league sports teams. It is also home to the NASA Lyndon B.
Johnson Space Center and the Texas Medical Center, the largest medical
center in the world. More than 52,000 Houston residents work in the
Texas Medical Center, making it a large part of the city’s economy.14
See Figure 1 for a list of everyday items and prices in Houston,
Texas. See Figure 2 for a comparison of Houston’s cost of living
compared to Singapore.
6
“Transportation Commission Approves June Proposition 1 Projects.” Texas Department of Transportation, June 25, 2015.
7
www.rebuildhouston.org
8
Erin Carlyle. “America’s Most Overvalued and Undervalued Housing Markets.” Forbes, June 8, 2015.
9
Ibid.
10
Kris Hudson. “Houston Housing Market Holds Up.” The Wall Street Journal, May 2015.
11
Erin Mulvaney. “It’s not necessarily cheap to rent in Houston’s suburbs.” Houston Chronicle, June 15, 2015.
12
Expat Arrivals.
13
“Economic and Political Unrest Challenge Multinationals’ Planning for International Assignments
to Compete Globally.” Mercer, June 2015.
14
www.payscale.com.
15
www.numbeo.com.
16
Ibid.
FIGURE 1: PRICE OF COMMON ITEMS
IN HOUSTON, TEXAS15*
USD EUR GBP SGD
Loaf of bread $2.21 1.97 € £1.40 $2.97
Bottle of wine $11.50 10.27 € £7.31 $15.44
One-way bus ticket $1.25 1.12 € £0.79 $1.68
Pair of sport shoes $77.42 69.16 € £49.20 $103.97
One-bedroom city
apartment (monthly rent)
$1,178 1,052 € £748.59 $1,582
Imported beer
at a restaurant
$5.00 4.46 € £3.18 $6.72
*
Note: current currency conversions reported on June 25, 2015.
FIGURE 2: COST OF LIVING IN HOUSTON
COMPARED TO SINGAPORE16
Consumer price index -6.75%
Rent index -25.69%
Groceries index +11.69%
Restaurants index +30.12%
Consumer price plus rent index -25.69%
Local purchasing power +47.58%
