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Houston, TX
MSA: Houston-Sugar Land-Baytown, TX
Best places ranking: #4 among large metro areas
Population: 5,728,143
Traditionally known for its lax zoning, low taxes, dominant oil industry and heavy traffic, Houston has evolved rapidly over the past decade. The city government has moved aggressively to curb pollution and diversify the economy. In 2003, the Metropolitan Transit Authority committed $1.46 billion for a public transportation system. The Texas Emerging Technology Fund, an early-stage venture fund created by the Texas legislature, allocated $180 million for research grants in the last two years, targeting the energy industry as well as the fast-growing aerospace, information technology, nanotechnology, biotech and medical sectors.

Houston now boasts the world's largest medical center and the nation's top-rated cancer hospital. And this summer, Houston became the largest municipal purchaser of green power in the country, according to the EPA.

Houston has performed surprisingly well during the current recession, adding 500,000 new jobs during the past five years. The Greater Houston Partnership, an economic development group, forecasts that the metropolitan area will attract an additional 600,000 jobs and $60 billion in capital investment by the end of 2015.

One downside to launching a business in Houston: Mother Nature. In 2005, Hurricane Katrina inflicted $81.2 billion in damage on the Gulf Coast. Three years later, Ike devastated nearby Galveston. Some local businesses find hurricane insurance hard to come by. -Megan Erickson

Launch Toolbox:
Resources for getting started in Houston, TX


Local smallbiz lenders

  • Wells Fargo & Company
  • JPMorgan Chase & Co.
  • Compass Bancshares
  • Amegy Corporation
  • St Financial Group
See all local lenders

Houston Business Statistics
Employer establishments with 1-49 employees
112,748 78,289
Small business growth rate
6.3% 5.3%
State business tax climate ranking
(out of 50 states)
7 N/A
Percentage of population with bachelor's degree
(ages 25-34)
24.3% 32.7%
Violent crime
(rate per 100,000 inhabitants, 2007)
679.1 537.6
Property crime
(rate per 100,000 inhabitants, 2007)
4,109.3 3,700.0
Population growth
12.6% 6.38%
Per-capita income
$46,471 $41,342
Per-capita income growth
34.6% 25.0%
GDP (in millions)
$344,516 $164,601
GDP growth
50% 32%
Average hourly wage
$20.62 $21.03
Housing foreclosure rate
(first half of 2009, 1 per every X housing units)
153 113
Median rent
(2009, for a 2-bedroom housing unit)
$866 $981
Housing price-to-income (HPI) ratio
(first quarter of 2009)
1.1% 1.8%
Long-term HPI ratio
(20-year average, 1984-2004)
1.4% 1.9%
HPI deviation from long-term average
-18% 0.0%

All statistics are for the full Metropolitan Statistical Area. For a complete list of data sources, see "How we picked the Best Places."

From the November 2009 issue
"Because of lack of zoning in major areas, people are much more open to some guy or gal opening a business in a little hallway on a shoestring. " -Bryan Caswell
Best Places Winners
What do you think of Houston?
Find your launch spot
Do you prefer a place that is: Small Medium Large
The factors that matter most to me are:
 Affordable wages  Few foreclosures
 Educated workers  Low housing costs
 Low crime  High local incomes
 A growing economy  Population growth
 Growing small business population

ireportTell us why: Low taxes? Talented workers? An active small business community? Send us your photos and videos, and you could be featured in our upcoming coverage of reader-picked Best Places to Launch. More
This year we partnered with the Ewing Marion Kauffman Foundation to find the 50 most business-friendly communities in America.

With help from Robert Fairlie, an economist and leading scholar of entrepreneurship at the University of California, Santa Cruz, we developed a methodology and sifted through such data on factors such as per capita income, hourly wages, workforce quality, crime rates, taxes and foreclosures. More

Comments? E-mail the editors
Data partners

This package was produced in partnership with the Ewing Marion Kauffman Foundation.

Foreclosure data provided by RealtyTrac.

Housing price-to-income data provided by Moody's