HOUSTON, TEXAS, is one of the fastest growing metropolitan areas in the entire United States. With its continually developing industrial bases in energy, manufacturing, aeronautics, and transportation, including being home to the headquarters of more than 25 Fortune 500 companies, the city attracts more than 100,000 new residents annually.
What makes Houston so different from Seattle or other American cities struggling with sluggish economic growth and a stagnant housing market? The answer is simple: it has embraced the bedrock economic benefits of market-driven growth and innovation spurred through less onerous government regulation and lower taxes.
It’s Economics 101. Somewhere Milton Friedman is smiling.
What’s Houston’s secret formula? First, the city has some of the most relaxed zoning laws in the entire country. Zoning, as you will remember, is the ubiquitous government practice of telling people where they can and cannot build certain structures.
For housing, as in every other sector of the economy, less regulation… well, you get the picture.
Add to this mix relatively low taxes (including Texas’ lack of a state income tax), strategic targeted public infrastructure investments, and a steady stream of entrepreneurial professionals, and you get one of the fastest growing, most affordable, and most desirable metropolitan areas in the United States.
As so often happens, market-driven solutions have done a better job at achieving growth-oriented policy goals in Houston than any central planner or government bureau could.
This smarter approach to regulation and lower taxes means more growth and opportunity for everyone in American society, especially the most vulnerable or disadvantaged. Lower home prices in Houston mean more low-income and minority families can afford to achieve the American dream. Just compare: in New York and Los Angeles, less than 40 percent of Latino families own their own homes. But in Houston, that number is 52 percent and growing.
American cities across the country should follow Houston’s common-sense example to combat the housing crisis—not through more growth-killing rules and regulations, but by embracing basic economics.
