Monday, January 07, 2008

Vietnamese-Americans flocking from SoCal to Houston

Over the holidays, the LA Times ran an interesting piece on the mass migration of Vietnamese-Americans from southern California to Houston (hat tip to Joel). Lots of good excerpts in here. Bold highlights mine.
Vietnamese Americans are lured to the Texas city by cheap real estate, a lower cost of living and a burgeoning cultural enclave.
Nguyen is one of many Vietnamese Americans from California who have flocked to Houston, lured by cheap real estate, a lower cost of living, bountiful business opportunities and a thriving, growing Vietnamese community.

Houston offers a slice of the American Dream to Vietnamese Americans who couldn't find it in California.

In San Jose and Orange County, home to the country's largest Vietnamese enclaves, skyrocketing rents and staggering housing prices -- even in a down market -- have become too much for some.

"At first, we thought California is the best," Nguyen said. "It's sad to move from a place we know so well. But here we own a beautiful house and are very comfortable."

Vietnamese business owners from California have followed, expanding or moving their operations to take advantage of the burgeoning community and the lack of heavy competition that defines the teeming streets of Orange County's Little Saigon.

The Vietnamese American migration to Houston is a typical California story, particularly in immigrant communities where residents found their first footing in the Golden State but left for places where the cost of living was lower and the opportunities more abundant.

The exodus of Vietnamese Americans is part of a larger shift in California: As the economy weakens, more people are leaving. An annual study by the state Department of Finance released Wednesday showed that 89,000 more people moved out of California than moved in from elsewhere in the U.S. in fiscal 2007.

Houston's Vietnamese community, now the third largest in the nation, numbered about 85,000 in 2006 -- up a third in just six years, according to U.S. Census figures. (HAIF says 160-180K in the Houston metro; enclaves ranked here)

Community leaders and real estate agents in Houston say they started seeing an upswing in Vietnamese Americans from California five years ago, driven mostly by the city's cheaper housing. Although Hurricane Katrina brought in displaced Vietnamese Americans from Louisiana, residents say the California migration is much larger.

As people have flocked in, Houston businesses have capitalized, reaching out to Vietnamese Americans in California. Real estate agents have advertised houses in California's Vietnamese newspapers. Developers have tried to persuade businesses to expand to Houston. And talk shows on Radio Saigon Houston have spread the word of the booming community in simulcast shows picked up on California stations.

Houston is no longer the Vietnamese community's "best-kept secret," said Thuy Thanh Vu, the radio station's co-owner.

Houston's housing tale is remarkable. Real estate agents boast of clients who sell their California homes, pay for new ones in Houston at a third of the price and have enough left to invest.
The median price for a single-family home in the Houston area is $145,390, according to the Houston Assn. of Realtors. In contrast, Westminster's median housing price is $520,000 and Garden Grove's is $475,000, according to DataQuick Information Services. In San Jose, it's $640,000.

"For what you pay for your mortgage in Houston, you can only afford a rat's hole in California," Vo tells clients.

Vo makes sure to put Houston's best face forward. She picks up prospective California clients from the airport and puts them up in hotels -- free of charge -- for a few nights. She drives clients around the Vietnamese areas, stopping at restaurants she's sure will impress them.
Vietnamese businesses have sprouted in pockets throughout Houston, with most concentrated on a four-mile stretch of Bellaire Boulevard in the city's southwest area. The thoroughfare has striking similarities to Bolsa Avenue, Little Saigon's main drag.

There are Vietnamese supermarkets, large Catholic Vietnamese churches, Buddhist temples and restaurants hawking bowls of noodles that to visitors taste as good as those served in Little Saigon's pho houses. There are Vietnamese-speaking doctors, lawyers and real estate agents. Even the hottest Vietnamese pop stars stop in Houston.

Some Vietnamese-owned businesses from California see Houston's thriving enclave as an untapped market and have expanded their businesses.
But Ho saw many open fields in Houston, which he believes will one day be home to new stores. Plus, the rent for opening a warehouse in Houston is about a third cheaper than in California.

Vietnamese American investors also are pumping millions of dollars into the area, which still has plenty of open space to build shopping complexes and housing subdivisions.

Developer Luu Trankiem is planning to open the New Saigon Shopping Plaza next year, a high-end center on 32 acres near Bellaire Boulevard. The plaza's seven high-rise buildings come at a price of about $300 million.

"You cannot afford to build something like this in California," he said, estimating it would cost three times as much in Southern California.
Trankiem said he saw more opportunities for new businesses in Houston than in Little Saigon, which is congested with thousands of nail salons, restaurants and mom-and-pop shops in fierce competition.

"Houston is the last frontier for investment in the Asian community in the United States," Trankiem said.

Beyond Vietnamese-run business, prospective stores for the plaza also include Ann Taylor and Starbucks, mainstream shops that Little Saigon developers would have trouble luring to its worn-out strip malls.

Houston's Vietnamese enclave also benefits from its diversity. It's next to a long strip of Chinese businesses. Korean, Latino and Pakistani stores also pepper the area. In contrast, Little Saigon caters mostly to Vietnamese Americans.

Trankiem believes Houston's Vietnamese enclave could one day be the bigger, better, higher-end sister to Little Saigon.

Even so, Houston has its challenges. The oppressive humidity forces many to stay indoors during the summer, and some people who have bought homes for investment purposes have had trouble finding renters.

But those who have made the move have found the American Dream at near-bargain rates.

Nguyen's parents, who still rent in California, plan to move to Houston when they retire.

And she's thinking about opening an insurance business. She never thought that was a possibility in Little Saigon, where renting office space is expensive and there are too many competitors.

"Over in California, you're just average people," Nguyen said. "But here, you become upper middle class. You have more money than people over here. You can buy houses and do business."
More support for Houston as an Opportunity City. And it's not just SoCal Vietnamese-Americans. Has anybody else noted the surge in out-of-state license plates driving around lately? They're coming from all over. The secret is getting out.

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At 9:01 PM, January 07, 2008, Blogger Brian Shelley said...

For those concerned about the handful of hip companies who pass over us because we are too provencial, remember this article. I will trade a few dozens execs that demand massive subsidies for a few thousand middle class entrepreneurs.

At 9:04 PM, January 07, 2008, Anonymous Anonymous said...

Great story. What's up with the alumni kicker from Ohio state in the Nat Title game. What a dork.

At 9:03 AM, January 08, 2008, Anonymous Anonymous said...


One of the interesting aspects of this story, besides the migration of people because of price differentials between urban areas, is that these people are coming here and investing in entrepreneural pursuits and creating jobs.

One of the potential issues of living in urban areas which have steep housing price gradients is that available social resources get drawn into housing and real estate and away from other potential areas of the urban economy where they might be put to better use.

At 9:15 AM, January 08, 2008, Blogger Brian Shelley said...


I thought about that same idea recently. Much real estate can be considered a consumer product. Most homes don't typically produce output, with the exception of rental properties. If capital is tied up in residential real estate, this lowers the amount of investment capital available for production of goods and services. Economic growth rates will then be slower, all else being equal.

At 9:45 AM, January 08, 2008, Blogger Tory Gattis said...

Absolutely. That's one of the fundamental assertions in the Opportunity Urbanism report I did with Joel Kotkin: high cost of living (esp. housing) pulls away resources that could go into all sorts of other things, like entrepreneurship, jobs, and all around vibrancy (restaurants, stores, cultural events, etc.). If half of peoples' money is going to pay their mortgage, where are they going to find the money to support those other things?

At 10:58 AM, January 08, 2008, Blogger Brian Shelley said...


I think the loss of investment capital is more important than the change in consumption patterns. I might be willing to exchange some restaurants and clothes for a nice climate and a good view. However, having more capital available for entreprenuership means that in the long run we will increasingly be able to consume more. This I greatly prefer.

At 10:48 PM, January 28, 2009, Anonymous Anonymous said...

This story really made me laugh. These people who are migrating to Houston have no idea what they are getting themselves into. First let's look at the weather. Sure you have this big beautiful home, but you can't really go outside much in the summer. The A/C has to be on 24/7 and I mean 24/7. Even at night it feels like an oven. The electricity bill for a moderate 1700 sqft house would be some where between $225 to $300 a month. Now, let's look at the property tax rate over there. Some are as highest as 4% a year. Compare to Calfifornia at around 1.5%. So for a $300k home in houston, you are paying nearly $1000 a month for property tax! Compare that to $375 a month for a $300k home in Califonia. Sure there are a lot of big huge commercial plazas recently built but look closely at the tenant rate. There's just not enough business there to fill every shopping center. I see realtor from Houston trying to wheel people from California over by showing them cheap homes but when you calculate everything at the end of the month, it's not much of a savings. I have two sisters who lives in Atascotita about 45 minutes from downtown Houston and there home which they have own for over about 10 years has only appreciated about $15k. The can't even sell it because there are so many new homes being built for such low prices tat it doesn't make sense for a buyer to save $15k and buy an older home. I lived in Houston for two years and I know what it's like. It will take you at least 5 years of living there to even begin to adjust if you're from California. My advise to these people and who ever decides to move to houston is to visit during the months of June through September and stay at least a month. Then you will see the true picture.

At 7:45 AM, January 29, 2009, Blogger Tory Gattis said...

While I'll agree our summers are hot, you cannot reasonably compare the cost of living in SoCal vs. Houston. First, property tax here is less than half of what you mention (<$500 month for that house). You are completely ignoring CA income taxes, which don't exist here. Yes, our homes don't appreciate very fast as supply is allowed to meet demand, but they also don't fall 20+%, as they have in SoCal.

At 3:21 PM, April 24, 2009, Anonymous Anonymous said...

heres the down side, you have the racist rednecks from the far right. people dont think about that. to me, id rather pay more elsewhere (outside the usa), and know that my human rights are safe.

At 4:42 PM, April 24, 2009, Blogger Tory Gattis said...

Yes, and California is a racist-free wonderland where everybody loves everybody... yeah right. Every region has their bad seeds. Houston is famous for its tolerance and open mindedness, as well as being one of the most diverse cities in the country.

At 9:22 PM, January 28, 2010, Anonymous Anonymous said...

This is like the 2nd renaissance of what took place (I witnessed)in the early 80's (the "Reagan Era") in the great city of "exodus" of Vietnamese (and people from other parts of the States and the world; for example, Europe..."funny" when you think about it) coming from California and relocating in surrounding Metropolitan Houston. Houston back then, was an eclectic, FUN, diverse, dynamic and booming city in the SW region!! People, its happening again...!! Weather is hot and humid but that is why you have modern amenities such as AC...use it, don't be shy...


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