A Tale of 2 Houstons During the Oil Bust; Inside 500 Crawford


Photo of David Bowie mural: Russell Hancock via Swamplot Flickr Pool


14 Comment

  • ala the LA Times article, would it be gloating to say “called it!”. Because that’s what I’m saying.

  • Re: East Side vs. West Side circumstances. Its useful to remember that there are a number of large plant capacity expansion projects that were approved over five years ago that are being built out. (The cause was that natural gas prices plummeted due to structural changes in the production process and the market, prompting existing facilities to be re-tooled for gas and new facilities to become justified in the United States as opposed to elsewhere.) Although these projects are largely invisible to the public, very much unlike office construction in the Energy Corridor or a the Exxon campus, the cost of these projects often runs up into the hundreds of millions or even billions of dollars and they are very labor intensive — right now. But these large new modernized plants are also much more automated and less labor-intensive than their forebears. When all the contractors have wrapped up the work and gone home, THAT will be the true test for Houston’s east side. It will be even more of a test in the Beaumont/Port Arthur and Brazosport markets, which are far less diversified.

    Re: FedEx. Big Box retail stores struggle for survival, and meanwhile FedEx is expanding. No surprise there. Not at all. Look at changes in the composition of the tenant base for most retail centers over the past decade, and consequently the slowdown in the rate of retail construction (at least in terms of square footage, if not value) over the last boom cycle. There’s a reason for it. Its creative destruction in action. The stores that are bound to survive offer services and/or social experiences and/or highly perishable goods and/or goods that have a high value per cubic inch such as medicine and smartphones. Everything else must compete directly with Amazon Prime, FedEx, and the like.

  • I’m sure lots of working class folks are going to gloat as the news spreads that the west-side white collar Houston is being hit first and hardest by the oil price drop, but what they don’t think about is how much of this city runs on real estate speculation, real estate development, and service industries which cater specifically to those more affluent, white collar residents.

    The revitalization of downtown will be at risk. The emphasis on re-populating the inner loop will be at risk. Eventually that effects restaurants, nail salons, gas stations, donut shops &c. where a lot of blue collar people (and the spouses of oil refinery guys) work.

    Trickle down is real. Remember Houston in the early 1990’s after a decade of cheap oil? Was it good for anyone? Only the slum lords.

  • The Niche,

    “Although these projects are largely invisible to the public, very much unlike office construction in the Energy Corridor or a the Exxon campus”

    To add on.

    The total investment ongoing in the Petrochemical complex is about $50 billion. 1000 main sold in 2014 after the crash was underway for $0.5 billion. There are about 50 skyscrapers in downtown. Therefore, with the investment ongoing in the Petro complex we could rebuild downtown Houston twice with only our classiest of class A skyscrapers.

    Jim John Marks,

    “Remember Houston in the early 1990’s after a decade of cheap oil? Was it good for anyone? Only the slum lords.”

    Actually employment growth in Houston during the 1990’s averaged .8% points faster than the U.S. employment growth. So it actually was a pretty good time for everyone.

  • I read the La Times article and do not see anybody gloating…

    But remember this: The East Side Built Houston. Not long ago Katy was a two feed store town and the Energy Corridor was not even a Zygote ;-)

  • Re: East Side v West Side
    While I’m glad to see the east side chugging along, the west side development could use some cooling off so that we can digest all of the population, job, and building booms. As for all of this threatening Inner Loop development, I don’t mind a sharper cooling off since there’s too much traffic as it is inside the Loop.
    The zone between the Loop and BW8 could use more people and development by comparison.

  • Not sure how East v West impacts the inner loop. Living in the middle opens up the entire city to job opportunities whether it’s N, S, E, or W. The TMC is fueling tons of growth by itself within the loop, and it’s happening because patients and physicians from around the world are coming to the TMC (oil is just an afterthought). I’ve been arguing for years that the west side (and Woodlands) were getting out of hand and will turn into Greenspoint one day if oil drops and lots of mid rise apartments are sitting empty out towards Katy.

  • There are actually quite a few white collar jobs that exist out east. Refineries are not just a bunch of blue collar operators, they are supported by a pretty large quantity of engineers and scientists, I wouldn’t be surprised if it’s close to a 1:1 or 1:2 split honestly (although many of those may be located offsite). And fwiw “blue collar” doesn’t really apply to plant operators, at least not in the traditional sense. Those dudes make an obscene amount of money, more than many of the people who live in the loop. It more appropriately applies to the support guys, but even they make quite a bit.
    I have to agree though that it will be telling to see what happens after the constructions are completed, but that won’t be for a few years I would guess so it at least gives us time to absorb the shock.

  • To also build upon Niche’s comment, the actual projected new permanent jobs to be located at these plants or plant expansions typically number in the hundreds, sometimes less. So the volume of long term demand for housing, retail etc., while far from negligible, on the East side and in Brazosport is an order of magnitude lower than what the West and North sides experienced over the last several years.

    The urban core, of course, gets a piece of it all, no matter what side of town is growing.

  • Nobody is speaking of “long term jobs” out there – the article is about balancing out the West Side Bust.

    And if 500,000 transplants can move to Katy and not retreat to where they came, so can a few folks on the East Side – the true economic engine of Houston.

  • New apartment complexes and especially new condo high-rises need to be built with the idea in mind that, in the future, no one will do any shopping in stores and everything will be delivered more or less on-demand.

  • I see quite a few overpaid white collar oil workers getting canned and having to come down to reality (from $150k a year IT support job to $60k a year job). But they will be back in a couple of years. Blue collar will always be the underdog with drop of the hat firings and cancer causing labor. It’s a very rare event, like sighting of Jesus on a toast, that blue collar can claim temporary stability over white collar.

  • Anybody that wants to look at the paired geographies of employment (excluding contractors) and their origin households in the Houston area can do so by doing a Google search for Census LED OnTheMap and going from there. There’s a little bit of a learning curve, maybe 30 minutes to one hour, but that’ll give you a much better appreciation for where permanent jobs are and aren’t. You can add some filters for income, too. This is a great little tool; its too bad that the Census Bureau isn’t funded well enough to keep it going each year.

  • About El Cantina in the heights… maybe since that spot keeps failing, maybe we don’t need a restaurant there? Maybe it would be better as a Trader Joes? Bring it!