Cities often grow organically. This is doubly true for Houston. With such lax zoning laws and recent infrastructure developments within the city, Houston is growing in a very particular direction. Today we are speaking with Pete Neubig, Regional Director for Mynd Property Management in Texas, about how Houston is growing and what factors are ultimately determining this growth.
Steve Rozenberg: Hey everyone, this is Steve with Mynd Property Management. I am here in Houston, Texas with my good friend Pete Neubig, who is the Regional Director for Mynd Property Management for Texas.

So Pete, let’s talk a little bit about Houston. You and I both know Houston and the fact that we know it’s growing, but it kind of is growing in a certain direction, right? And that affects rental prices and prices of properties, right?

Energy Corridor is Moving Houston Northwest

Pete Neubig: Yeah. So back in the 50’s and 60’s when the city was really being developed, downtown Houston was the center point of Houston. But what’s happened in the last few decades, especially in the last 20 years, is that you’re starting to see that the city of Houston, the midpoint or the center is now being moved almost northwest. And there’s many factors. So, the big one is that a lot of the oil companies have moved out of downtown and out of those buildings and they moved into what’s called the oil corridor or the-

Steve Rozenberg: Energy corridor.

Pete Neubig: Energy corridor. Thank you. It’s called the energy corridor, which is literally west and a little bit north of town. So what’s happened is, because they employee so many people and then there’s so many businesses that feed off of those businesses, secondary businesses, a lot of businesses are being developed there. So now what happened was that now housing is being developed there and now they just finished Route 99. Right? And so by 99 connecting, now people can get to that area of town even more efficiently.

Steve Rozenberg: Right. And so just so you understand, Houston is made up of, basically the freeway system is made up of loops, concentric circles. So there’s an inner loop, which is the 610, then it goes out, the outer loop is Beltway 8 and then the newest is 99.

And what Pete’s talking about is, the energy corridor goes from downtown Houston westbound to Katy. Now what’s happening is this energy corridor basically loops around the whole Northwest of Houston and that is where we’re seeing a lot of growth surging because it’s now available to get to.

Pete Neubig: Correct. And because there was a lot of available land, builders, instead of buying one plot, they can buy tracks of land and can build communities out there.

And that’s exactly what’s happening. So you’re seeing Katy has exploded, Cypress has exploded and now they’re actually going past Katy and Cypress. Places that used to be called the country are now called suburbs.

Steve Rozenberg: Yeah. Because now they’re accessible and you’re seeing that people are able to get lower prices. You’re seeing families want to move out there. Because Houston is such a transient city, you’re seeing a lot of people come in, they want to rent because maybe they’re relocating with their company, so they’re looking for rentals in these outer areas, which now are accessible and the prices are lower for now. It will go up, obviously.

Pete Neubig: And because everything’s moving west, to get through downtown is a traffic nightmare. So if you lived on the East side, it’s tough to go work for one of these oil companies to get through on the West side. So what’s happening is the East side is dwindling a little bit and the land is going, actually appreciation’s going up, but because there was so much land available that the price per land was actually pretty low, even on the West side.

Steve Rozenberg: Exactly. And one of the things you want to know about Houston is, on the East side it is restricted because of the river, the Gulf and Lake Houston. So it’s physically limited on the East side. That’s why so much growth is going West and now it’s going Northwest. So if you’re looking to buy a property and you want to know what areas are good, if you took it in a pie-type quadrant, you’re looking at Northwest of Houston as really the places where you’re getting great prices, you’re getting great rentals, you’re getting new properties. And again, there’s just better school districts. Everything’s new so you’re getting a much better price point as of right now. Though like I said, that will change over time. But right now that’s what you’re getting.

Pete Neubig: But interesting enough, you and I like East side of town. We like the East side of town because it’s blue collar and because there’s a lot of gas and petroleum refineries there. But different subject for a different time. But that’s ultimately why Houston is actually moving Northwest—the mid point of Houston.

Steve Rozenberg: So there you have it. If you want to know more, you can go to our website at mynd.co. So it’s M-Y-N-D.co. Also you can go to our Facebook group, the MasterMynd Real Estate Investment Club. There you got people like myself, Pete, other investors there. If you want to know more about Houston or any city, you can go in there, you can comment, like, engage and have conversations. So thanks everyone for watching, we’ll talk to you later.

Houston is growing, and it’s growing northwest. This is for a number of reasons, each of which can help any investor determine where the best neighborhoods are to invest in going forward. For one, many oil companies have moved out of the downtown Houston area for cheaper locations in the suburbs—particularly in the Energy Corridor, a business district located in the north and west of Houston. Likewise, the completion of State Highway 99, or the Grand Parkway, has made the northwestern suburbs a far more desirable location for young families and professionals moving to or within the Houston area.

While there are many reasons why Houston is growing the way it is, these factors are not blanket facts. Some neighborhoods in other locations around Houston, such as the Third Ward to the south of the city center, are experiencing growth and investment as well; however, knowing how a city will grow and expand into the future can help any investor make the best decision when choosing a property to buy.

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