2019 Will be a Big Year for Hotel, Retail Construction in Houston

Retail DevelopmentAs state and local officials continue to invest in flood control infrastructure developments and transit improvements, there’s another type of construction boom that’s poised to take off in Houston as well. According to commercial real estate firm Jones Lang LaSalle (JLL), there is a virtually unprecedented amount of hotel and real estate space slated for construction in our area this year.

In their 2019 Construction Outlook report, JLL found that Houston currently ranks #1 in the nation for retail space under construction, and #5 in the nation for the number of hotel rooms that will open this year. More than 4,500 new hotel rooms are expected to welcome guests this year, which accounts for roughly 3 percent of all new lodging facilities in the country. Houston will also add an estimated 4.1 million square feet of retail space in 2019, which is the equivalent of more than 20 Walmart Supercenters.

Analysts at JLL attribute this huge volume of commercial construction to the steady, prolonged population growth that Houston has experienced in recent years.

“Houston has been one of the national leaders in population growth for a decade now, with over 100,000 people per year moving into the metropolitan area,” said Matthew Parson, senior vice president of JLL’s Houston office in a recent interview. “With the population growth and no true barriers restricting the expansion, suburban sprawl continues to expand suburban communities.”

Meanwhile, the Dallas-Fort Worth area ranked high on JLL’s list of hotel and retail construction leaders, too. Keep an eye out—you probably won’t have to look far to find spacious hotels and retail centers coming to a neighborhood near you in 2019.

Harris County to Launch Flood Tunnel Feasibility Study

Concrete TunnelA year and a half after Hurricane Harvey made landfall in Texas, Harris County officials continue to explore new ways to protect Houston and the surrounding communities from future catastrophic weather events. In February, for example, the Harris County Flood Control District was awarded a $320,000 federal grant to assess the feasibility of an ambitious plan that would involve digging deep underground tunnels to carry stormwater from upstream bayous to the Houston Ship Channel.

 

This study, which is expected to take about four months, will evaluate whether or not stormwater tunnels could serve as a viable addition to the area’s long-term flood control strategy.

“The study is basically to look at our ground conditions, including our groundwater table, and compare that to existing technology in the tunnel industry to see if there’s a match,” said Russ Pope, executive director of the flood control district in a recent interview. “If that’s true, then we can start looking at costs, routes and opportunities we can potentially pursue.”

Although Austin, Dallas and San Antonio have all successfully implemented stormwater tunnels into their own flood-control infrastructure, the unique soil conditions and topography of Houston could make it more difficult for engineers to design an effective tunnel system in our area. Preliminary plans involve digging 20-foot-wide tunnels 150 feet deep that would use gravity to move stormwater as far as 30 miles to the ship channel.

Despite the anticipated challenges that are associated with building stormwater tunnels underneath Houston, flood control district officials argue that tunneling could actually be less expensive and more environmentally friendly than widening bayous and channeling existing waterways with concrete. For now, however, we’ll just have to wait and see what the results of the feasibility study reveal.

Metro to Ask Voters for Transit Improvement Funding in November

Houston Metro Rail

With Houston continuing the grow at an unprecedented rate, the Metropolitan Transit Authority of Harris County is preparing to undertake an ambitious 20-year plan called METRONext that could dramatically improve our area’s public transportation infrastructure. Proposed improvements include the addition of 20 miles of light rail service, 75 miles of bus rapid transit and 110 miles of two-way HOV lanes on local freeways.

Last year, METRONext officials surveyed Harris County residents to find out what transit improvements they’d most like to see included in the 20-year plan.

Based on the feedback they received, they identified five key needs that the plan should address: “Increased connectivity within the system, quicker travel times, reliable and safe rides, enhanced customer service and advanced technologies.”

Now, after tailoring their plan to suit the most immediate needs of Houston-area residents, METRONext is preparing to ask voters for more than $3 billion in borrowing authority to kick start the first phase of transit improvements. The project is expected to cost a total of $7.5 billion, most of which will be provided by state and federal transportation funding.

Although $3 billion might seem like a steep price tag, Metro board officials have been quick to point out that this money won’t be borrowed all at once. Rather, it will be borrowed in increments based on the timelines of individual projects.

“This plan will change. There is no doubt about that,” said Metro board chairwoman Carrin Patman in an interview with the Houston Chronicle. “What we get back from the community governs how much we ask for.”

Voters will find this bond issue on the November 2019 ballot during the Houston Mayoral race. Until then, it will be up to METRONext to convince Harris County residents that their plan is a worthwhile investment.

The Grand Parkway’s Final Phase of Construction is Underway

Houston HighwaysFollowing decades of careful planning and construction, work on the last leg of Houston’s Grand Parkway has finally begun. Once this section is complete in 2022, the 184-mile Grand Parkway will become the largest highway loop in the nation.

The last phase of parkway construction will be divided into three segments, all of which will be worked on at the same time.

This section of the parkway will stretch more than 50 miles around the northeast corner of the Greater Houston area and pass through Chambers, Harris, Liberty and Montgomery counties. According to the Houston Chronicle, construction crews will also build “74 new or substantially reconstructed bridges” and move “nearly 25 million cubic feet of earth” during the project. It’s expected to take about four years and cost $1.28 billion to complete.

Construction on first segment of the Grand Parkway started in 1994, but planning for the massive highway loop began way back in the 1960s. The final phase of construction will be funded by bond sales and Transportation Infrastructure Finance and Innovation Act (TIFA) loans.

According to the project’s description, this phase of the Grand Parkway’s construction will increase highway capacity by offering “a new tolled two-lane controlled access facility, with intermittent four lane sections for passing … four additional toll lanes from FM 1405 to SH 146 … and upgraded tolling equipment to the existing tolled four-lane facility from IH 10 East to FM 1405.”

Here at Texas Contractor’s Equipment, we’re thrilled to see this ambitious infrastructure project entering its home stretch after so many years of construction. To learn more about all the infrastructure development going on in our area, stay tuned for the latest updates from our blog!

Dallas-Fort Worth, Houston Lead the Nation in Homebuilding

Home ConstructionTexas welcomed more than 1,000 new residents a day in 2017, according the U.S Census Bureau, and construction crews are keeping plenty busy building homes for the state’s growing population. In October, housing market analysts Metrostudy Inc. found that Dallas-Fort Worth is leading the nation in homebuilding as of the third quarter of 2018, at a rate of nearly 35,000 single-family home starts per year. Meanwhile, Houston followed close behind in second place, with 29,370 home starts across a 12-month period.

Not only are Dallas-Fort Worth and Houston building more homes than any other metro area in the country, they’re also building even more homes than they were just a year ago. New home starts are up 8.7 percent in D-FW and 6 percent in Houston since last year, according to Dallas News. In their report, Metrostudy’s analysts also noted a shift toward more affordable housing construction in 2018.

“Over the past 12 months, builders and developers have been addressing the need for affordable new homes by developing in previously overlooked submarkets and building smaller, less amenitized homes, says Paige Shipp, regional director of Metrostudy’s D-FW market. “As such, the median price has dropped since last year.”

Although homebuying has slowed somewhat over the course of the past several months, Metrostudy’s analysts are quick to point out that this is probably a positive sign of market stabilization rather than overspeculation. In a housing market as hot as the ones in D-FW and Houston, a little slowdown is eventually inevitable.

Texas Construction Industry Exhibits Positive Signs of Growth

Texas ConstructionA persistent labor shortage has made it hard for many construction companies to keep their projects on schedule in recent years, but new data suggests that things are looking up for the construction industry in Texas.

According to the most recent report from the Bureau of Labor Statistics, Texas added 56,100 construction jobs in 2017—the most of any state in the nation.

These new jobs amount to a 7.9 percent year-over-year increase since 2016. With cities in Texas continuing to grow at an unprecedented rate and hurricane recovery efforts still underway, the Lone Star State can use all the help it can get to keep up with the demand for new construction. In addition to adding thousands of construction jobs last year, these positions are becoming more lucrative for workers.

In September, the Labor Department announced that average hourly earnings in the construction industry have passed $30 an hour for the first time.

This wage increase is due in large part to the rising demand for qualified construction workers across the state. The tight labor market may be putting employers in a pinch, but it has also had some residual benefits for workers. This unique confluence of economic conditions could offer new incentives for more young people to join the construction labor force as well.

At Texas Contractor’s Equipment Inc., we’re proud to support the construction companies in our area by providing them with custom ground engaging tools, attachments and ongoing product support. To learn more, feel free to give us a call or contact us online today!

Texas Is Producing More Oil Than Its Pipelines Can Handle

Oil PipelinesThanks to recent advancements in horizontal drilling and multistage fracking techniques, oil and natural gas production has steadily increased to unprecedented levels in the 90,000-square-mile Permian Basin of West Texas. Job seekers have are currently flocking to the region from all over the country, and the oil boom shows no signs of slowing down anytime soon. In January 2018, crude oil production in the Permian Basin hit a record 2.8 million barrels per day, making it the second-most productive oil field in the world. More recent estimates from the Energy Information Administration place Permian Basin oil production at close to 3.5 million barrels per day.

In fact, oil production in the Permian Basin has become so prolific that the region’s pipeline infrastructure is having trouble keeping up.

It’s been really a Renaissance for us, and as a result of that, we’re constrained by our oil and gas lines going to market—those lines are full now,” said Tommy Taylor, director of oil and gas development for Fasken Oil and Ranch in a recent interview.

Recently, this transportation bottleneck has begun driving oil prices down in the Permian Basin, causing concern and frustration among some oil company executives. The good news, however, is that several new pipelines are already under construction in the region. Earlier this month, for example, ONEOK of Tulsa, Oklahoma announced that it will invest close to $300 million to expand its West Texas LPG Limited Partnership pipeline system. Meanwhile, several other new pipelines are expected to become operational within the next two years as well.

In the long run, this pipeline shortage will likely to prove to be nothing more than a temporary roadblock in the ongoing growth of the Permian Basin oil field.

Houston Voters Approve $2.5 Billion in Bonds for Flood-Control Projects

Casting BallotLate last month, on the first anniversary of Hurricane Harvey’s landfall, voters in Harris County took an important step forward in the effort to protect Houston from future catastrophic weather events. On August 26, roughly 85 percent of voters approved a referendum which calls for the issuance of $2.5 billion in bonds to fund flood-control projects in and around Houston. The referendum received bipartisan support from local officials and was endorsed by a number of high-profile businesses and community organizations.

 

Harris County taxpayers are expected to see an average increase of $5 per year in their property taxes as a result of the referendum—a small price to pay for the safety and security of their homes.

These bonds are expected to help pay for a series of projects that will be selected from a list of more than 230 proposals. They will also supplement additional federal funding that was earmarked for flood-control efforts following Hurricane Harvey.

“Harris County residents have put their trust in the Flood Control District,” said District Executive Director Russ Pope in response to the referendum’s approval. “We plan to work extremely hard and efficiently to turn the financial resources made available as a result of this election into the reality of reduced flooding risks.”

Over the course of the past year, it’s been truly inspiring to see Houstonians from all walks of life band together and contribute to the city’s hurricane recovery efforts. Thanks to these people’s hard work, Houston will soon be more resilient and flood resistant than ever before.

Proposed Coastal Spine Will Protect Texas Energy Corridor

Petrochemical RefineryIn the wake of Hurricane Harvey, Texans have spent the last year adopting innovative new strategies to protect the state from future storm damage. The latest of these proposed strategies involves building a 60-mile “spine” of steel levees, concrete seawalls and earthen barriers that will stretch from the Louisiana border to an area south of Houston.

In addition to protecting homes and ecosystems from potential storm surges, this network of seawalls will also serve as the first line of defense for the region’s petrochemical infrastructure. This area of the Gulf Coast is home to roughly one third of the nation’s total refining capacity. Plans for the coastal spine are still being finalized, but Texas will seek at least $12 billion in federal funding to help finance its construction.

“Our overall economy, not only in Texas but in the entire country, is so much at risk from a high storm surge,” said Brazoria County judge Matt Sebesta in a recent interview.

After Hurricane Harvey disrupted about a quarter of the region’s refining capacity in 2017, the nation’s average gasoline prices rose 28 cents per gallon. With this in mind, the U.S. Army Corps of Engineers is eager to implement new defensive measures to protect these refineries from similar disruptions in the future. Meanwhile, a similar barrier project is expected to build about 25 miles of new seawalls and levees in nearby Orange County as well.

Thanks to the efforts of our state’s construction crews, the citizens of Texas will be in a much better position when the next Hurricane comes knocking at the door of the Gulf Coast.

City Council Launches New Housing Construction Program

Home ConstructionThere’s no shortage of residential construction projects underway in Houston, but local officials are concerned that many of the city’s newest housing units are prohibitively expensive for working families.  In an effort to bridge the growing divide between luxury condominiums and subsidized housing, the Houston City Council recently announced that it has approved a new home construction program that will add modern, affordable single-family homes to the city’s housing inventory.

Earlier this month, the council signed a $6.7 million agreement with a dozen local homebuilders and the Houston Land Bank, which owns the properties where the new homes will be constructed. This funding was provided by the annual block grants Houston receives from the U.S. Department of Housing and Urban Development. Although these funds are typically dedicated to repairs and rehabilitation, they were reallocated toward new home construction in 2017 following Hurricane Harvey.

Houston’s Housing and Community Development Director Tom McCasland hopes that this program will offer working-class families a better variety of affordable housing options to choose from. Even with the help of city down payment assistance, McCasland points out that many of the homes that are currently available to these individuals are older and not in good enough shape to pass HUD-mandated inspections. The City Council has not yet announced how many homes it expects to build with the initial $6.7 million, but officials seem optimistic about the program’s potential to improve affordable housing availability in Houston.

Meanwhile, with job growth on the rise and hurricane recovery efforts continuing to progress throughout the city, the future is looking bright here in Houston. Stay tuned for more updates from your source for ground engaging tools, custom excavator solutions and more—Texas Contractors Equipment Inc.