The median price of a single-family home in Houston dropped 8.5 percent compared to January 2008, according to the Houston Association of Realtors. But Houstonians are still much better off than many other major cities. The S&P/Case-Shiller home-price index finds prices in Phoenix have fallen 34 percent over the last year, 33 percent in Las Vegas, and 31 percent in San Francisco.
A new Reason Foundation policy brief finds that Houston’s housing market adapts to changing economic conditions better than the housing markets in other major cities, in part because it is the only major U.S. city without zoning regulations. The brief says this allows the region to maximize flexibility and accommodate housing diversity.
The report says the region’s lack of zoning policies and wide range of land use options helped it when the housing bubble began to burst. For example, between 2005 and 2007, the number of average monthly residential permits issued in Houston fell by 17.7 percent, which was less than half of the decline seen in Dallas-Fort Worth (44 percent) and San Antonio (35.9 percent).
“Houston’s largely free-market approach to land development has been widely criticized by the planning profession,” said Sam Staley, the report’s author and director of urban growth and land use policy at Reason Foundation. “An analysis of residential market trends, however, finds that Houston’s housing market has been more resilient and robust than other cities in Texas, even in the face of what is widely considered an unprecedented housing downturn. Moreover, this resilience is particularly notable for multifamily housing, a residential sector most cities struggle to nurture and accommodate.”