Houston's apartment boom contributes billions to local economy

Although experts are predicting a slowdown in new apartment construction in Houston due to the oil slump, the industry has contributed billions to the local economy in recent years.

 

Houston's apartment industry, which likely is headed for a slowdown due to the drop in oil prices, was a huge boon to the Bayou City's economy during its boom years, a new study finds.

The National Multifamily Housing Council and the National Apartment Association released the study, which looked at economic impact from apartment construction, operations and resident spending.

In Houston, those factors contributed $22.6 billion locally and supported more than 218,000 jobs in the metro area in 2013, the latest numbers available. The bulk of the economic impact — $16.2 billion — came from renter spending in the Houston metro.

In Texas, the industry and residents contributed $76.2 billion to the state's economy and supported 722,600 jobs, and nationwide those figures were $1.3 trillion and 12.3 million jobs in 2013, according to the NMHC-NAA study.

Although Houston's hot apartment market continued into 2014, many industry experts forean abrupt slowdown in new construction will take hold this year.

Currently, there are about 28,000 apartment units under construction across Houston, most of which are expected to be delivered by early 2016. Pat Duffy, president of Colliers International's Houston office, estimates that between 40 and 70 proposed projects may have been postponed or canceled amid the economic uncertainty surrounding oil prices.

Duffy expects oil prices to rebound around the same time Houston has absorbed the 28,000 units under construction. At that time, he anticipates many developers will breathe life into these stalled projects again.

But for the time being, Houston's rents are still increasing at a faster rater than the national average, and newly opened communities in desirable locations are filling up.

"Despite the slowdown in the oil and gas industry, Houston is enjoying high occupancy levels and has already added more than 3,000 units in 2015," Bruce McClenny, president o fApartment Data Services, said in a statement released with the NMHC-NAA study. "We expect more than 100 communities and 20,000 units to be delivered in Houston this year. Vargos on the Lake, The Susanne (a Finger Cos. property in Montrose), The Grand at La Centerra (in Cinco Ranch) and One Lake's Edge (in The Woodlands' Hughes Landing) are just a few examples of apartment communities about to open across the greater Houston area."