Officials: New home costs in Conroe area outpacing local wages

As the cost of new homes rises in Montgomery County, local city and county officials continue to leverage tax abatement programs and look to create convention spaces to attract more high-paying jobs in manufacturing industries.

This year, the city of Conroe and Montgomery County have offered tax abatements to four businesses to bring commercial growth and more jobs to the city.

With large master-planned communities, such as The Woodlands Hills and Grand Central Park, on Conroe’s horizon, city officials have adjusted abatement requirements to ensure the salaries offered by those businesses are livable wages for their employees, said Fred Welch, former Greater Conroe Economic Development Council executive director.

Two years ago, Conroe began requiring a business seeking a property tax abatement to create a minimum of 10 full-time jobs that pay $15 per hour or higher, but the city is discussing increasing the requirement to $18 per hour in the future, Welch said. 

“We as a board—as an organization—we’re interested in employment at all levels, but we’re not going to provide direct incentives [to jobs offering] anything less than $15 an hour,” Welch said. “We want to make sure that if we’re bringing jobs into the community, they’re a least [paying] a living wage.”

Home costs outpacing wages

Metrostudy Regional Director Lawrence Dean said the cost of new homes throughout the region grew by double digits, in terms of percentage, every year between 2012 and 2015. He said home price increases have stabilized but continue to go up at more typical rates.

In Conroe, the price point of most new homes has shifted substantially since 2007, Dean said. In 2007, 44 percent of new homes cost less than $200,000, compared to only 8 percent in 2017. This year, about 76 percent of new homes built in Conroe cost between $200,000 and $399,000, according to Metrostudy.

“The price for a new entry-level home is increasingly in the $200,000 to $300,000 range,” Dean said.

Dean said price increases make it particularly difficult for first-time homebuyers and residents who have a lot of debt payments to afford a new home. He said, typically, mortgage companies look for prospective homeowners to have a monthly debt payment that does not exceed 34-37 percent of their monthly income, including the new home.

“It is harder on first-time homebuyers because they don’t already have equity,” Dean said. “The way a lot of more expensive homes are bought is that if a person already owns a home, they have seen the value of their current home escalate and so that increases the amount of equity they get when they sell that home, so they can make a bigger down payment. That doesn’t work if you are a first-time homebuyer.”

According to a November 2016 study by Community Development Strategies for the GCEDC, the median home value in Conroe is $163,000, which depicts a 25.77 percent increase between 2011-2016. The report concluded the median income in Conroe is $49,000 and is roughly $23,000 below the median income in Montgomery County. 

Local officials said they are expecting an influx of new residents to the region with master-planned communities, such as Grand Central Park and The Woodlands Hills, under development in the area.

Grand Central Park will reportedly offer 2,700 homes with pricing beginning in the $290,000s. Officials for The Woodlands Hills have not announced the starting home value, but the community will reportedly feature more than 4,500 residences.

Welch said he believes the residential developments, coupled with the city’s push for high-paying businesses and a full-service hotel and convention center, will continue to attract high-paying employers to the community and region.

“Obviously, you want the opportunity for your employees to live, work and stay right here at home,” Welch said. “It’s not a requirement, but certainly as [companies are] bringing management people in, you want to know where they’re going to live and where they’re going to send their kids to school.”

Shannan Reid, Montgomery Economic Development Corporation director, said the increasing cost of housing could make it difficult for many Montgomery residents to afford new homes in the Montgomery area.

While more than 400 jobs have been created within Montgomery’s city limits in 2017, including 280 new jobs at the Kroger Marketplace that opened Aug. 4 at the intersection of Hwy. 105 and Lone Star Parkway, Reid said studies show many people who can afford to live in Montgomery are not working in Montgomery.

According to a community demographic study by The Retail Coach prepared in March 2016 for the MEDC, the average Montgomery household in the city’s primary retail trade area earns an income of $108,402 compared to $84,309 for the average household inside Montgomery’s city limits.

However, Reid said—with median property values of $192,045 inside city limits and median property values of $264,342 in the Montgomery primary retail trade area—some employees may struggle to afford new homes in Montgomery. It could also make it difficult to recruit new employers to the region.

“The price of the land qualifies or disqualifies [a city from recruiting new businesses] right out of the gate,” Reid said. “Once that’s out of the way, it becomes, ‘Where will my employees live? Where will my kids go to school? What are the amenities around the area?’ We have to have layers of housing available for their workforce.”

Attracting new employers

To attract new businesses that offer competitive salaries to the region, Montgomery County, Conroe and Montgomery officials offer tax abatements to companies that meet specific guidelines.

Property tax abatements are temporary exemptions granted to businesses that reduce the amount of property value that businesses pay taxes on over a predetermined period of time. Conroe, for example, offers abatements based on specific factors, including the business’s capital investment and the number of jobs that will be created.

Montgomery County has 20 active tax abatements throughout the county, including eight in Conroe and one in Willis, according to the Montgomery County Tax Office.

Conroe has granted abatements to three manufacturing companies in the last year: Galdisa USA, Icotex and Memstar USA. The companies—which manufacture nuts, industrial components and water-treatment equipment, respectively—must create at least 20 full-time jobs to comply with Conroe’s abatement guidelines, according to GCEDC interim executive director Danielle Scheiner.

An abatement was also granted by Montgomery County for Bauer-Pileco in early October to expand its presence in Conroe, and another abatement agreement is in the works for the company with the city of Conroe. The company estimates it will create 37 new jobs over the next three years, Welch said.

Montgomery County Judge Craig Doyal said some residents see tax abatements as a negative use of taxpayer money that will increase the area’s traffic and further consume the county’s rural areas. However, the abatements are needed to encourage commercial growth and to maintain low property tax bills. By attracting those businesses, Doyal said local municipalities benefit from increased property values and new sales tax revenue.

“We want quality commercial and corporate business partners to come here, so that’s who we’re going to go out and pursue with abatements,” Doyal said. “The companies who meet a certain criteria level to get an abatement are, generally, going to drive that salary range.”

While the west side of Conroe faces major economic growth from residential communities and commercial businesses, the northeast area of the city continues to offer homes for low-income residents, said Brian Bondy, Conroe/Lake Conroe Chamber of Commerce director. The 2015 census revealed that 19.3 percent of Conroe residents are below the poverty level.

Bondy said job diversity is important when attracting businesses to the area so residents in low-income areas are not overwhelmed by the increasing cost of living.

“When you have a large, diverse employer base, that means you have more diverse jobs,” he said. “This gives people who live here the opportunity to not necessarily stay in the same job but to better themselves, which only comes with having companies that are willing to locate their operations here.”

By Kelly Schafler

Managing editor, South Houston

Kelly joined Community Impact Newspaper as a reporter in June 2017 after majoring in print journalism and creative writing at the University of Houston. In March 2019, she transitioned to editor for the Lake Houston-Humble-Kingwood edition and began covering the Spring and Klein area as well in August 2020. In June 2021, Kelly was promoted to South Houston managing editor.


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