MIXED OUTLOOK FOR HOUSTON
New policies offer short-term boost, long-term challenges to local economy.
Both the local and national economies are likely to get a short-term boost if President Joe Biden passes his $1.9 trillion package to provide economic relief and bring the coronavirus pandemic under control, but climate and other environmental policies could present a longterm challenge to the region’s energy industry and the growth that it drives.
Biden’s plan, unveiled last week, includes money to accelerate vaccine deployment, help state and local governments bridge budget shortfalls, bolster unemployment benefits and provide direct stimulus payments to Americans, among other forms of aid.
That would provide immediate relief to workers in Texas — service workers in particular — and further stabilize the housing market, said Bob Stein, a political science professor at Rice University.
“Here in Houston,” Stein said,
“it would enable renters to avoid eviction, homeowners to make mortgage payments and encourage developers to continue building rental and owner-occupied housing in anticipation of the pandemic ending,” Stein said.
The specifics of Biden’s proposal need to be negotiated with Congress, but Stein said he expects some type of economic relief to pass, putting money into the pockets of people who need it, and get them spending.
In addition to the shortterm stimulus, the Biden administration also has proposed spending $2 trillion on infrastructure, including $50 billion on road and bridge repairs in the first year of his term.
“When you build roads, you hire people,” Stein said, “and you reduce the cost of getting products to consumers.”
Biden’s polices on climate change, which bans on new drilling in federal lands and waters and other measures to wean the nation from fossil fuels, could present challenges to the oil and gas industry. The oil and gas industry generates significant business activity and state revenues.
Among the president’s first actions Wednesday were issuing executive orders to rejoin the Paris climate agreement and cancel the permit for the Keystone XL pipeline.
“It could be problematic,” Stein said of Biden’s energy policies. “We are an oil dependent state, and we haven’t transitioned very well.”
On the other hand, changes in the restrictive immigration policies put in place by former President Donald Trump could contribute to economic growth in Houston and Texas, analysts said. On Wednesday, Biden also signed executive orders repealing Trump’s restrictions on travel from several Muslim-majority countries and stopping construction of the Southern border wall.
Responsible immigration policy can be critical to providing the workers that the state and local economies need to grow, said Ray Perryman, CEO of the Perryman Group, an economic consulting firm in Waco.
Immigration has been key to Houston’s growth in recent years, although it has slowed in recent years because of a weaker job market, in part due to recent oil busts, said Patrick Jankowski, an economist at the Greater Houston Partnership, a business-financed economic development group.
Houston ranks fifth in foreign-born population, behind metro New York, Los Angeles, Miami and Chicago. Foreign-born Houstonians made up 23 percent of the population in 2019, according to a report from the Greater Houston Partnership.
Over the past four years, it wasn’t uncommon for the former president to make policy changes with a tweet, but Biden offers what economists consider another positive for the economy: predictability.
“Businesses hate uncertainty and there was so much uncertainty in the last four years. Things will change but they will change in a predictable manner,” Jankowski said. “Any changes in policy we will be telegraphed well in advance and businesses will be prepared.”