Opportunity Zones have taken the country by storm, and Houston is no exception. Designed to stimulate low-income, underdeveloped neighborhoods, Opportunity Zones incentivize investment in designated areas. Over the next decade, investors can buy, build, or renovate property in these specific locations for substantial tax breaks on capital gains.

As the most populated city in the state of Texas and fourth in the United States, Houston is full of possibility. Now, with the addition of Opportunity Zones, commercial real estate investors and developers are paying particularly close attention to Space City and its surrounding suburbs. Below, we explore potential Opportunity Zone investments based on asset class in Harris, Liberty and Walker Counties. By examining Reonomy’s robust sales data, we analyze Houston’s parcel breakdown for potential investment options.

Harris County

Everything is bigger in Texas, even the counties. With nearly 4.6 million residents, Harris County (which includes city proper) is the most populated county in the state and the third most populated county in the nation. With over 300,000 commercial properties throughout the county, Harris County is a hotbed for investment and development. Due to its burgeoning population, the city’s multifamily market continues its trajectory, with unit absorption and occupancy rates steadily increasing and closing in on 90 percent. Layer on the Opportunity Zones in Harris County, and now might be a good time to capitalize on the multifamily boom.

Reonomy data shows that multifamily only makes up an 11.9 percent of the county’s entire Opportunity Zone parcel breakdown. Vacant land dominates the majority at just over 60 percent—the high percentage of vacant land in Houston’s Opportunity Zones is something to consider for multifamily development.

Liberty County:

Located northeast of Houston’s center city is Liberty County. While significantly smaller than Harris County, Liberty County consists of some of Houston’s primary suburbs, like Dayton and Cleveland. With the introduction of recent construction and development projects, the county is experiencing expansion. For example, the new Grand Parkway project, a proposed 180-mile circumferential highway, is especially causing Texans to rethink their investment decisions. By connecting Houston’s eleven surrounding counties, the project is expected to contribute growth in the surrounding areas. Cleveland is also booming with construction, with developers planning and building single and multifamily housing, mixed-use space, and warehouses across the city.

Platform data shows 45,284 vacant land plots Liberty County’s Opportunity Zones. These types of properties made up over half (56.2%) of Liberty County’s property sales this year at an average of $71,940. Similar to Harris County, developers looking to develop might be might be interested in purchasing land in Liberty County as Houston continues to affect sprawl and Liberty County’s economy. 

Walker County:

Directly north of Houston, beyond the Sam Houston National Forest, lies Walker County. Here, Huntsville is the county seat of Walker County, with a population of 38,548, and is the fifth fastest growing city in Texas. More people simply means more development. The city has seen growth in the multi-family market, particularly in student housing. The home of Sam Houston State University, Huntsville has seen an increase in student housing construction, with six large apartment complexes either under construction or in planning phases.

Like Harris and Liberty counties, Walker County’s Opportunity Zones are primarily vacant land. At 67.6 percent, land makes up the majority of the parcel data, with agricultural assets following behind at 22.3 percent. Similarly, most of 2018’s sales were in vacant land plots, as well. As Huntsville’s population flourishes and more people make their home there, other asset classes will continue to develop.

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