Front side of Alamo in downtown San Antonio TexasThe Dallas Texas city skyline at night

Financial Advantages of Living in Texas

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As Time Magazine points out, “The crisis may be over (for the time being) in Washington. But the crisis for America’s middle class continues, as middle-income jobs get harder to find and the cost of living gets harder to bear. Where can Americans turn for answers? In a word: Texas.” According to the US Census Bureau, Texas contains five of the ten fastest growing cities in the US for 2011 and 2012. Houston, San Antonio, Austin, Dallas, and Fort Worth were all included in that list. But what are some of the awesome reasons why one should want to live in Texas?


Let’s face it. While the weather is nice, and the state is quite full of tourist attractions, these are only great for vacationers. When one is considering a move to another state, the most important aspect of that state would be the jobs. As Joel Kotkin, a professor of urban development at Orange, California’s Chapman University explained to BBC, “The main reason people go is for employment. It’s pretty simple. The unconventional oil and gas boom has helped turn Texas into an economic juggernaut, particularly world energy capital Houston, but growth has also been strong in tech, manufacturing and business services.”

According to Kotkin, there is no shortage of high-wage blue collar jobs in Texas, as well as good jobs for students graduating from universities. Of the top ten metropolitan areas which are highest in job growth for 2013, four of them are in Texas. Estately calls Texas “The Silicon Valley of the South,” and explains, “More and more tech companies and entrepreneurs are migrating to the Central Texas area, giving rise to the title of “The Next Silicon Valley.” Drawn by limited regulations and taxes, a highly-educated workforce, and a fantastic quality of life, the Austin area is becoming a major hub for the next generation of tech companies.”

Libertarian Econimist Tyler Cowen states for Time Magazine, “In the past 12 months, Texas has added 274,700 new jobs — that’s 12% of all jobs added nationwide and 51,000 more than California added … In fact, from 2002 to 2011, with 8% of the U.S. population, Texas created nearly one-third of the country’s highest-paying jobs.”

Taxes are Lower

Another reason people are said to be flooding Texas is the low taxes. As Time explains, “Texas has no income tax. Per resident, it collects roughly $3,500 in taxes overall (including all state and local taxes) every year. By way of contrast, California collects $4,900 per resident — New York collects a whopping $7,400 per resident. Both states, of course, have income taxes. People are going to Texas because it’s a low-cost, low-tax state. But they’re also migrating to other Sun Belt states, like Colorado, Arizona and South Carolina, which have similar policy profiles.”

BBC agrees that low taxes contribute to the mass move to the Lone Star State. “exas is one of only seven states where residents pay no personal state income tax, says Kay Bell, contributing tax editor at Bankrate and Texan native. The state has a disproportionate take from property taxes, which has become a big complaint among homeowners, she adds. But overall, only five states had a lower individual tax burden than Texas, according to Tax Foundation research. There are also tax incentives for businesses and this week legislators cut more than $1bn off proposed business taxes.

Houses are Cheaper…Everything’s Cheaper

Housing in considered to be cheaper in Texas. The reason why is simple; the land is cheaper, so housing is cheaper. According to Time, A typical home in Brooklyn costs more than half a million dollars (and rising rapidly), and 85% of these dwellings are apartments and condos rather than stand-alone homes. They don’t usually have impressive sinks and seamlessly operating air-conditioning fixtures. In Houston, the typical home costs $130,100 — and it is likely a stand-alone and newer than the structure in Brooklyn. Housing is bigger — and cheaper — in Texas.

As Cowen explains, “The lower house prices, along with a generally low cost of living — helped along by cheap labor, cheap produce and cheap gas (currently about $3 a gallon) — really matter when it comes to quality of life … Texas has a higher per capita income than California, adjusted for cost of living, and nearly catches up with New York by the same measure. Once you factor in state and local taxes, Texas pulls ahead of New York — by a wide margin. The website MoneyRates ranks states on the basis of average income, adjusting for tax rates and cost of living; once those factors are accounted for, Texas has the third highest average income (after Virginia and Washington State), while New York ranks 36th.”

BBC also agrees with the fact that the cost of living is cheaper in Texas while the average income is higher. As Cowen wrote, “My colleague Mark Schill of Praxis Strategy Group and I looked at the average annual wages in the nation’s 51 largest metropolitan statistical areas and adjusted incomes by the cost of living. The results were surprising and revealing.

In first place is Houston, where the average annual wage in 2011 was $59,838, eighth highest in the nation. What puts Houston at the top of the list is the region’s relatively low cost of living, which includes such things as consumer prices and services, utilities and transportation costs and, most importantly, housing prices: The ratio of the median home price to median annual household income in Houston is only 2.9, remarkably low for such a dynamic urban region; in San Francisco a house goes for 6.7 times the median local household income. Adjusted for cost of living, the average Houston wage of $59,838 is worth $66,933, tops in the nation.

Most of the rest of the top 10 are relatively buoyant economies with relatively low costs of living. These include Dallas-Fort Worth (fifth), Charlotte, N.C. (sixth), Cincinnati (seventh), Austin, Texas (eighth), and Columbus, Ohio (10th). These areas all also have housing affordability rates below 3.0 except for Austin, which clocks in at 3.5. Similar  situations down the list include such mid-sized cities as  Nashville, (11th), St.Louis (12th), Pittsburgh, (13th), Denver (15th) and New Orleans (16th).

Tiny Houses

In his piece for Time Magazine, Cowen shares his thoughts on lost cost living in Texas. “In the coming decades, some people may even go to extremes in low-cost living, like making their homes in ­micro-houses (of, say, about 400 sq. ft. and costing $20,000 to $40,000) or going off the grid entirely. Brad Kittel, owner of Tiny Texas Houses, blogs about his small homes built from salvaged materials at His business, based in the small rural community of Luling, east of San Antonio, offers custom homes, plans and lessons on how to be a salvage miner. So far he has built about 75 tiny homes … The micro-home trend is being watched by traditional homebuilders as well. Texas-based developer D.R. Horton, a member of the New York Stock Exchange and one of the largest homebuilders in the country, built 29 micro-homes sized from 364 to 687 sq. ft. in Portland, Ore., last year.”

So, while Texas may be well-known as a great place to visit (delicious cuisine, beautiful landscape, historic landmarks, etc), it turns out that it is also an awesome, and economic place to live.


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