Writer: Ryan Gandolfo
3 min read September 2023 — From a low-key trading post in the 19th century to an international hub of industry and innovation, Houston has developed into the fourth most populous city in the U.S. and No. 3 among metro areas for corporate facility investment.
With 26 Fortune 500 companies headquartered in Space City –– trailing only behind New York and Chicago, the Houston-The Woodlands-Sugar Land area saw investment in 255 new projects in 2022, as reported by Site Selection magazine. Even more noteworthy for businesses, Houston is one of just a few major cities with returned-worker percentages above 50%.
Houston’s claim to fame has long been as the energy capital of the world, trailblazing a path across industry segments from exploration and production to supply and technology. The city is also on a path to becoming the “energy transition capital of the world” given its diverse talent pool, infrastructure and established energy industry financiers, as cited by McKinsey. An estimated $15 billion in energy transition-focused investments flowed into the Houston market in 2021.
However, Houston’s energy is derived from more than just pipelines and refineries, as the city is welcoming new residents at a faster pace than the majority of U.S. cities, attributable to increasing job opportunities, an underrated quality of place and much more. The metro area saw an increase of over 124,000 residents from 2021 to 2022, with a population of 7.34 million. Invest: explores five reasons why Houston is climbing the list of landing spots for businesses and residents alike.
Cultural melting pot
With 145 languages spoken and 90 consulates located in the city, Houston is a dynamic hub for people of all backgrounds. According to U.S. Census estimates, 28.9% of the city is foreign-born, and Asian and mixed-race populations grew the most in the metro area over the past two decades. In particular, Houston is home to a vibrant Asian community with the country’s second-largest Indochinese population –– trailing only Los Angeles. Regarded for its multiculturalism, Houston residents benefit from a truly fusion-centric culinary scene, covering the gamut from Viet-Cajun to Southeast Asian-Latin American to Korean Mexican and more. Travel+Leisure ranked Bayou City as the No. 5 best food spot in the U.S.
Despite being the fourth largest U.S. metro area by population, Houston’s housing is surprisingly affordable. According to the C2ER Cost of Living Index, the city’s housing costs were 17.3% under the national average. When only accounting for the 20 most populated U.S. metros with available C2ER data, the percentage of costs drops to 84.4%. And while inventory continues to be a problem for many cities across the country, Houston’s housing market is on the rise, earning the title for the highest home construction rate in 2023. Houston’s reputation as a city without zoning has drawn developers and is part of the reason the city builds housing faster than many other U.S. cities.
With two premier public and private research universities in town, Houston’s talent pipeline remains steady for a large industry cluster. Starting this fall, the University of Houston joined the Big 12 Conference –– a collegiate promotion that puts the Cougars on the same playing field as the University of Texas in Austin, Texas Christian University, Texas Tech and Baylor. More importantly, the move helps raise UH’s national profile and attract more prospective students to the Houston area for studies and future employment opportunities. Among bachelor’s degree holders in the Houston MSA, nearly half (49.1%) were awarded science, engineering and related degrees.
Houston is home to a robust grouping of sectors from energy and advanced manufacturing to aviation and life sciences. According to the Greater Houston Partnership, nearly one in three manufacturers are based in the city, while its location –– equidistant from the east and west coasts, makes it ideal for national distribution. Its status as a global trade hub is cemented by its No. 1 foreign trading port in terms of tonnage. And while recession fears are lingering across the nation, the Greater Houston area is well positioned to overcome headwinds given its economic sector diversity. According to Waco-based economic analysis firm The Perryman Group, an estimated 318,400 jobs will be added in the Greater Houston area by 2027, as cited by Houston Public Media.
Emerging international sports city
Houston sports teams and events are having a moment. From the buzz generated with the 2022 World Series to its debut as host of the 2023 March Madness Final Four, Houston is garnering attention from the sports world. The economic impact of the sports teams and events is ever-growing, with the NFL’s Houston Texans regional impact estimated at over $1 billion and this past spring’s NCAA Final Four tournament contributing an estimated $270 million. With a perennial playoff team in MLB’s Houston Astros and a pipeline of events from the PGA’s Houston Open in March 2024 and the World Cup in 2026, Houston is expected to continue to expand as a noteworthy sports town.