Builders are working around the clock in Conroe to meet an increasing demand for homes as major employers continue to draw new residents to Montgomery County.
Developers and builders have filed 522 new residential permits as of Sept. 30 compared with 343 permits total in 2010, according to the city. With a rise in permits citywide, Conroe projects a 51.4 percent increase in permit revenue during fiscal year 2015-16.
“New home construction is very beneficial for the community, whether it is single-family or multifamily because the building materials produce sales tax revenue,” said Fred Welch, executive director of the Greater Conroe Economic Development Council. “Homeowners are going to buy appliances and accessories for their homes, so the construction itself is very beneficial [because of additional sales tax revenue].”
The majority of new housing construction is occurring inside existing neighborhoods rather than within new subdivisions, said Nancy Mikeska, Conroe assistant director of community development.
“There are subdivisions that did not necessarily expand, like for instance West Fork Estates [along Hwy. 105]was started several years ago—kind of right at the downturn of the economy,” Mikeska said. “Well in the last three years there was a little bit more [construction], and now it is really booming in there.”
Although demand for housing is a factor, Mikeska said many developers in and around Conroe are building on previously undeveloped land within their property because of the strength of the local economy. In some cases, developers purchased land during the economic downturn and now have the funds to justify further development, she said.
Sam Yager III, vice president of Harper’s Preserve developer 242 LLC, said the community is seeing a rise in new homes built largely because of the presence of major employers, such as the incoming Houston Methodist and Texas Children’s hospitals in the Hwy. 242 area.
The first phase of Harper’s Preserve, which is just outside of the Conroe city limits, was completed in 2013 with 375 homes in the West Village, but Yager expects to have more than 1,700 homes at build out. Construction started on the development’s East Village this year, and construction is underway on 200 new lots that were sold to homebuilders in July. Yager said 242 LLC has contracts with homebuilders that have requested an additional 160 lots within the community next year as well.
“It is not just developers [responding to population growth],” Yager said. “It is the school districts, commercial development, multifamily developers and these hospitals. When multiple people in multiple sectors are all making that same choice in the same area at the same time, it tends to breed confidence in the market.”
Developers are also looking for land to purchase with easy access to The Woodlands and Houston as The Woodlands Development Company runs out of land available for development. Conroe has been proactive in its positioning to draw further development to the city, Yager said.
“You have seen a lot of development go down [FM] 1488 and out toward the east side [of I-45]on Rayford Road, but what is starting to happen is you are getting [development]fairly far afield from The Woodlands,” Yager said. “Developers [are]making a decision to be in the Conroe area. I think you are seeing all of the work [the city of]Conroe has done in the past to get ready for this [growth]start to pay off for them.”
Although new home permits have been filed throughout the city, Mikeska said several key Conroe corridors, such as West Hwy. 105, Loop 336, Hwy. 242 and FM 2854, are also seeing an uptick in new homes being constructed.
Several commercial projects are underway along those thoroughfares. Commercial developer Curtis Lindsey, owner of Lindsey Construction Inc., has begun renovation work on Tall Pines at 105 at the intersection of Hwy. 105 and La Salle Avenue partially because of increasing housing construction nearby.
Once complete, the renovated Tall Pines at 105 will feature five commercial buildings along Hwy. 105 and 256 renovated storage units behind the buildings.
“When you get [additional]rooftops, you are going to need some commercial, retail and storage [developments],” Lindsey said.
Lindsey said property along major thoroughfares is appealing because it gives developers an opportunity to line the roadway with businesses.
“With all of the development going on along Hwy. 105, we looked for the opportunity to buy a piece of property that is depressed,” Lindsey said. “With [the property]we will boost occupancy [and]commercial [property]across the front [of Hwy. 105], and it will breathe in new life into something that has been challenged over the years.”
Lindsey, who has also worked as a contractor, said the growth in Conroe is comparable to the rise in development in other Houston-area communities.
“I see development going on out towards Katy and things going down south [of Houston], and there is a lot of things coming [to Conroe]now,” Lindsey said. “The big-name developers that typically have been in the Houston and Katy markets have come up and purchased big chunks of land.”
Effect of low oil prices
The strength of the local economy is a driving factor for increasing building permits, but Mikeska said it is uncertain how depressed oil prices will affect ongoing development.
“I have not seen a slowdown yet [because of declining oil prices],” Mikeska said. “I think people did not anticipate that Conroe would get such an influx of people that not only want to be here but put their business here.”
Although many of the city’s major employers work within the oil and gas industry, the addition of different industries in recent years has diversified the local economy enough to mitigate the effect of low oil prices, Welch said.
“The sale of oil may be down from this time last year, but it is still active and robust,” Welch said. “We just have to bide our time and see where there might be opportunities to go beyond oil and gas. But we are a lot more diversified in Conroe than we were even 10 years ago.”