Houston dominates America’s growth corridors and makes the case for the world’s highest standard of living
Monday, February 25, 2013
The Manhattan Institute has just released a new report by Joel Kotkin on “America’s Growth Corridors“, which outlines four key corridors that are still growing strongly in an otherwise anemic U.S. economy: the great plains, the Gulf coast, the inter-mountain west, and the manufacturing belt of the southeast. Houston figures into the report quite prominently as the largest city among the four growth corridors. If you don’t want to read the whole pdf, I recommend searching on “Houston” to find the key elements. Here are some of my favorite Houston excerpts:
In Houston, for example, the massive Texas Medical Center is now the largest concentration of medical facilities in the world. [It] now ranks as the country’s 12th-largest business district in terms of square feet, ahead of downtown Los Angeles, with plans to expand so that it will rival Philadelphia’s (the seventh-largest) in size by 2014.
Houston, the clear center of the Third Coast economy, has emerged as one of the country’s megacities. Over the past decade, Houston has had one of the largest increases in employment of any major metropolitan area—up 15 percent between 2000 and 2011.
Houston, Dallas, Baton Rouge, and Tampa have seen stronger rates of growth in the numbers of educated people moving into their areas, more so than such cities as New York, Los Angeles, Chicago, and San Francisco.
Houston and Dallas already have a higher rate of international immigration than such traditional magnets as Chicago, Washington, and Philadelphia. A recent Rice University study found that Houston now surpassed New York as the country’s most racially and ethnically diverse area.
Today, Third Coast ports Brownsville, Tampa, and Houston have some of the highest rates of foreign immigration in the nation. Traditionally, this migration has come largely from Mexico and Latin America, but newcomers are increasingly arriving from Asia as well. Over the past decade, Houston’s Asian population has expanded by 160,000, or 70 percent, and the city is now home to the eighth-largest Asian population in the nation. Houston’s Asian migration is growing 50 percent faster than migration flows to such established Asian hubs as New York, San Francisco, Los Angeles, and Seattle.
When adjusted for cost of living, wage earners in Houston, Dallas, and Austin, as well as most corridor cities, earn much more than residents of New York or Los Angeles.
This is particularly notable in Houston, which has had one of the strongest increases in manufacturing over the past decade of any major city
The region is now home to several of the country’s leading ports, led by Houston and New Orleans, which also boast the first- and second-fastest growth in custom district traffic among the top five districts, outpacing New York, Los Angeles, and Detroit.
In the future, many Third Coast ports will likely increase trade with Asia. The scheduled 2014 opening of an expanded Panama Canal, with double its current capacity, will likely shift some Asian trade from America’s West Coast ports to its Third Coast. Houston will likely benefit most; the city expects a 15 percent jump in Asian trade after the canal expansion project is complete. In contrast to ports in the Northeast and California, virtually all the Third Coast ports—and many on the southeast littoral as well—are in the process of large-scale expansions.
But, by far, the most important and interesting tidbit in the report is the chart at the bottom of page 15:
As you can see, Houston simply dominates it at #1 with $75k (!!). DFW and Austin are a distant second and third at $63k, and they fall from there. This is reinforced by a similar statistic in a recent City Journal article on the Texas Growth Machine (hat tip to Jessie), which notes:
“Adjusted for cost of living, Texas’s per-capita income is higher than California’s and nearly as high as New York’s. Factor in state and local taxes, and Texas pulls ahead of New York.”
This further backs my argument that Houston has the highest standard of living in the U.S. (and likely the world) among major metros.
Of course the dominant factor in cost of living is housing, so this strongly validates Texas’ free market approach allowing supply to meet demand (if avoiding the housing crash didn’t already prove that point). And Houston’s very substantial $12k advantage over even other Texas cities points to the incredible value of no-zoning in keeping housing and other costs of living low (including commercial office and retail costs). For more on how that works, check out my Opportunity Urbanism op-ed here. And that leads me to end with this awesome graphic that I just love (hat tip to Josh).