COMMENT OF THE DAY: ENERGY DEPENDENCE 
“The current Houston economic boom isn’t connected to nation-wide anything. It’s connected to energy-sector activity. If, how and when energy activity slows will determine if the Houston economy, and the Houston real estate market by extension, also slows or busts. If all drilling were to stop tomorrow, our boom would be a bubble that popped. If energy activity continues at this pace for 100 years, they won’t be able to call it a bubble. They’ll just call it growth.” [Densify, commenting on Comment of the Day: Bursting Your Housing Bubble Bubble] Illustration: Lulu
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Our real estate market is dependent on the national economy because the economy affects the institutions that provide credit. You don’t build a condo tower with a loan from Exxon, you build it with a loan from someplace in New York. Banks, pension funds, etc. won’t lend a dime for Houston development no matter how well energy is doing if there is some sort of shock that chills credit. It took about a year for the 2008 crisis to really hit Houston and nonetheless all the big projects were cancelled or put on hold. Terrorist attack, Middle Eastern war, or some major mishap in Washington (like defaulting on our debt) are all potential threats.
It always amazes me how everyone will gang up to bash the evil oil companies. The houses inside the loop arent being bought by starbucks employees, wake up folks. The oil companies supply a lot of high paying jobs and pay a ton in taxes.
Ben is right. Even in the Heights – Uh oh! We live in Heights proper. 75% of the street lives in new/rehab $700k+ housing and 80% of those people bought/built in the last 18 months and work for energy companies – Anadarko, Shell, Exxon, Halliburton, etc. Oh Oh, and we’re all under 40! The is a strong consensus among the NEW guard that we all wish for the Heights to continue to turn more West U than Austin. The old guard hates this – oil company executives (evil) pricing them out of the neighborhood. I sort of enjoy the process :)
Lol, there you have it – right there in the Heights – why get something going for yourself when you can extirpate?
And regarding the COTD, I am genuinely curious who benefits from perpetuating the notion that energy sector activity is somehow disconnected from “nation-wide anything.” Are there people wandering around willing to believe this?
It’s connected to energy-sector activity.
(T)he oil companies’ . . . (employees) are paying a ton in (property) tax.
Fixed that for you!
anon22, what exactly are we destroying in the Heights? We are indeed destroying the old fabric of a formerly blighted area filled with crime, while pumping the city coffers with more revenue. Outside of a few old residential structures, the past 50 years of the Heights isn’t something worth “saving”. I’ve never understood the argument that making neighborhood more affluent (and in this case, much more so) is a bad thing.
You said they preferred it more west U than Austin, but really, if you wanted West U wouldn’t you be there already?
It’s gonna be a real party around here when those (artificially inflated) oil prices crater again. It’s coming, Dave.
Aww come on Dave, I think you secretly like the offbeat/eccentric/Austin-ey side of life. Why else would you spend time commenting on a quirky blog run by a creative writing Ph.D. student? Aren’t there better venues for people to gloat about what income bracket they’ve made it into?
@markd It’s not all dependent on oil prices…there’s also nat gas and NGL’s…
Dave, if you’re under 40, you are not part of the vanguard who turned the Heights around. In some cases affluency just means blandness.
Somehow I don’t think “drilling will stop.”
“From matx:
(T)he oil companies’ . . . (employees) are paying a ton in (property) tax.
Fixed that for you!”
Did you really fix it for them, matx? Have you never looked at the Houston skyline? Most of those buildings house oil companies. And, guess what? Property taxes are assessed on those buildings. Lots of them. Then there’s the Energy Corridor, full of tax producing buildings, and the new Exxon campus will be worth about a billion dollars…and be taxed.
No, you didn’t really fix it for us at all.
Damn, I forgot to mention those massive tax producing refineries east of here, too.
Dave: And, providing a job that produces an income that can be taxed shouldn’t be overlooked as a positive to the economy.
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A tax on the company itself is more political grandstanding as it gets paid but the consumers of that product, thus is a tax on them. A perfect example is all the taxes placed on “commercial property owners” (such as Fat Property) in Houston (and even more so in Montrose with the MMD tax). Who pays those extra water bills that “apartment owners” are charged? The extra registration fees? The extra MMD tax (that’s ‘only paid by commercial owners’)? The extra drainage?
.
Renters.
.
“but but.. it’s a tax on apartment owners I thought?”. So long as all owners pay it, renters pay it.
.
(just food for thought next time you gleefully pull the lever for a tax on ‘someone else’. It’s likely a tax on yourself that you’ve been tricked into voting for)