HOUSTON — Poor old Houston, beaten and battered and left for dead, is showing signs of a pulse.
Not a strong one, mind you. But in this city, where the oil bust ruined lives, where 250,000 people lost their jobs, any sign of life is cause for crowing.
The economic gurus are proclaiming that the worst of Houston's ills are behind it. Further, an odd thing has happened: Houston, the energy capital that fizzled, is once more being seen as an attractive place to live and is beginning to draw companies and their employees from other parts of the nation.
Office Space Is Cheap
True enough, Houston is not attractive from every angle. Its sultry summers--not to mention the staggering air-conditioning bills that accompany them--bring to mind New Delhi rather than Malibu. But Houston is also a place where homes are available for a pittance by California or East Coast standards, where office space is cheap and plentiful and where the cost of living is significantly less than in any other city near its size.
"Where else can you buy a four-bedroom, three-bathroom home in a major city for $80,000?" asked Barton Smith, the chairman of the economics department at the University of Houston. "You can buy brand new office space in Houston today for what it would cost to lease it in another city."
Not everyone is convinced. When it decided to move out of New York, the American Cancer Society recently chose Atlanta instead of Houston, even though Houston, with the world's largest medical center, would seem a natural choice. The city even offered free land, to no avail.
One of the deciding factors was that almost all of the New Yorkers who would be asked to transfer flatly refused even to consider Houston, while about 40% of those polled said they would move to Georgia.
On Brink of Rebound
Even so, Bob Lanier, a Houston businessman and former chairman of the state highway commission, thinks the city is on the brink of a rebound that will be an entrepreneur's delight.
"Houston today is the opportunity of a lifetime for a younger man," the 62-year-old Lanier said.
That is a change in perspective here; since the early '80s, the only way Houston looked was down. As the price of oil sagged, so did the city's economic underpinnings. Houston came to symbolize the depth of the oil industry's suffering.
To make matters worse, high-rises and other office buildings that had been years in the planning and building were still going up even as the economy took a tumble. Today, Houston has almost 50 million square feet of empty office space.
So why do people here think a turnaround is under way?
"There's an upbeat feeling about the city," said economist Smith. "Things are kind of coming together."
Last week, Smith delivered that message to about 400 business leaders who gathered to hear his yearly economic prognostication.
"We feel we are embarked on the road to recovery," he said, predicting a 2% increase in employment and growth over the next two quarters. But he was careful to add that recovery was not a sure bet, that either a national recession or a downturn in oil prices could undo all the good news in a hurry. Jared Hazelton, of the Austin-based Texas Research League, agreed.
"The only fly in the ointment is that recovery is dependent on a whale of an oil boom or the growth of the U.S. and international economies," he said.
Barometers Look Positive
For now, however, the economic barometers look positive for the first time in years. The price of oil seems to have stabilized at close to $20 a barrel, unemployment is decreasing both in Houston and throughout Texas, new businesses are moving in and the help-wanted ads have been steadily increasing. Even the city's record-setting home foreclosure rate is slowing down.
Another good indicator is that Houstonians are throwing more parties than they did in the bad old days.
"My schedule of parties is very strong," said corporate caterer Jackson Hicks. "I think that indicates the mood of Houstonians."
And as the gloom seems to be fading, the emphasis now is on luring more industry to the city. In an odd kind of turnaround, the bait is Houston's own hard times and what that has done to the real estate sector.
"Houston is one of the best real estate buys in the world," said David Cook, executive vice president of the Horne Co.
Land at 1968 Prices
Certainly that is the case for now. Office space is renting for less than half of what it would cost in New York. Industrial buildings can be purchased for 60% of what it would cost to build them now. Raw land is at 1968 prices and apartment complexes are selling at half of today's construction cost.
Single-family homes are some of the cheapest in the country. The September median sales price for a single-family home in Houston was $62,246. The comparable figure for Los Angeles was $146,852.