Real Estate Rumblings

Chevron delays downtown skyscraper but keeps tax incentives

Chevron Corp. says it is delaying its plan to build a skyscraper in downtown Houston. The 50-story tower was slated to be located at 1600 Louisiana Street at Pease on the site of the old YMCA building, which was demolished.

Chevron planned to create a three-building urban campus in downtown, with its two existing buildings at 1500 Louisiana and 1400 Smith. The proposed new tower was designed by the HOK architecture firm.

On Thursday, Chevron said it would not make a decision about when to start the constructing the building until after 2014.

Everybody ballyhooed the Chevron building like it was a sure thing that would be creating construction jobs next year – even state and local governmental officials who wanted to give economic incentives.

Chevron has always been wishy-washy about the timetable for the skyscraper. When plans for the tower were announced with a press release in July, Chevron was ambiguous about the timing and its “final investment decision” to build or not to build.

The ambiguity is apparent if you carefully parse Chevron’s July press release: “Final investment decision for the project, designed by HOK, is expected in the second quarter of 2014. Groundbreaking will follow final investment decision, and occupancy is anticipated to begin in the fourth quarter of 2016.”

But everybody ballyhooed the Chevron building like it was a sure thing that would be creating construction jobs next year – even the state and local governmental officials who wanted to give Chevron economic incentives.

The California-based energy firm had agreed to receive a $12 million economic development incentive package from the state’s Texas Enterprise Fund. As part of the plan, Chevron would bring 1,700 jobs to Houston. In addition, the city of Houston agreed to support the package by granting a 10-year abatement on property taxes. If you read the fine print, though, the incentives are tied to job creation, not constructing the new tower.

Chevron spokesman Justin Higgs told the Houston Chronicle that construction has not been canceled, only delayed, and that the 1,700 new jobs will be created in Texas, as previously announced.

Earlier in December, Chevron said it is cutting capital spending next year and it was learned this week that the energy behemoth is delaying the downtown Houston skyscraper and some other projects around the country.

Elsewhere in downtown Houston, Hines is building a skyscraper at the corner of Main and Texas Avenue. Site preparation and demolition of an old building on that site is underway. Hines says the 47-story, 1 million square-foot building, 609 Main St., will be completed in 2017.

The downtown office market is healthy with high occupancy rates in its major towers. Finding large blocks of empty downtown office space is nearly impossible, so it made sense for Chevron to want to build a new tower.

The Chevron scorecard at the end of the day: The historic YMCA building is gone. The city and state agreed to give financial help to Chevron and the massive energy company has already received some of it. The construction jobs for the skyscraper aren’t happening for a while. Chevron says it will still bring 1,700 jobs to Houston. Chevron says the tower will be built – someday. Now we can all sit back and watch the grass grow on the Chevron’s downtown dirt.

Ralph Bivins, former president of the National Association of Real Estate Editors, is founding editor of Realty News Report.

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rent affordability news

Houstonians need to make nearly $68,000 to afford rent in 2025

Photo courtesy of Dolce Midtown Apartments

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A new rental report from Zillow has revealed Houston renters need to make about 23 percent more money than they did five years ago in order to afford rent in 2025.

Zillow analysts examined the income needed to afford rent in 50 major U.S. metros, and determined rent prices in each city as of April 2025.

The average Houston renter needs to make $67,731 a year to afford living in the city, the report found. To afford rent for a single-family home, the income needed increases even further to $85,017.

Despite Houston's rising rent cost of living, it's still more affordable than many other cities. Nationally, the average income needed for someone to comfortably afford rent comes out to nearly $81,000. The study says that figure has increased nearly 35 percent since 2020.

"Housing costs have surged since pre-pandemic, with rents growing quite a bit faster than wages," said senior Zillow economist Orphe Divounguy. "This often leaves little room for other expenses, making it particularly difficult for those hoping to save for a down payment on a future home. High upfront costs are often overlooked, which can keep renters in their current homes."

Rent prices in Houston averaged $1,693 last month, which is less costly than the national average rent price of $2,024. Additionally, Houstonians are spending about 24 percent of their income on rent, while the typical American spends almost 30 percent of their income on rent.

Renters are also saving hundreds of dollars in comparison to those that own their homes, as a recent SmartAsset study discovered the median monthly housing costs for a Houston homeowner came out to $2,219.

At least we're not living on the East or West Coast, where eight U.S. metros require six-figure incomes to afford rent. Residents in San Jose, California need to make $136,532 a year to afford rent, the highest out of all 50 U.S. cities. Rent prices in San Jose came out to $3,413 in April.

Here's how much money renters need to afford living in other Texas metros, according to Zillow:

Dallas – $71,413
Austin – $68,840
San Antonio – $58,590

zillow housing report rent prices affordability houston