Saturday, August 7, 2010
I'm back in Houston from a visit to points far north. I thought up some blog posts while traveling, but I'll mark my return to the Lone Star State with a link to this article from The Atlantic by Derek Thompson: How Texas is Dominating the Recession.
SAN ANTONIO -- No state is thriving in the wake of the Great Recession. But compared to the rest of the country, Texas is experiencing something like an economic boom.
Thompson offers four reasons for Texas' relative success: (1) a late start; (2) stable real estate; (3) the right mix of industries and economic activities; and (4) "something about Texas," particularly its taxing and regulatory climate. More on reason #2:
2. Stable Real Estate
Real estate executives and economists struggled to find one reason why the Texas economy largely avoided the real estate boom and bust, but a few theories emerged. First, San Antonio Mayor Julian Castro suggested that a reliance on property taxes in Texas (compared to California) might have dulled real estate appreciation. Second, the banks that survived the Savings and Loan crisis in the 1980s have mostly held onto conservative and un-exotic lending practices. Third, land and utilities are generally cheaper throughout Texas, which holds down the cost of the living. Fourth, besides Dallas, Texas' major cities have diversified away from the kind of real estate and financial services addiction that plagued CaliFlAriVada (that's CA, FL, AZ, NV), where the recession has been the most severe.