Houston’s Growth Hits a Roadblock

The following article was authored by Loren Steffy:

In 2024, Harris County — the heart of metro Houston — added 105,800 residents. A year later, the gains were just 48,700. In America’s most diverse metro area, the number of people arriving from abroad fell by more than 40 percent, and net migration into the county fell by almost 80 percent. Without international migration, the county’s population would have shrunk, according to Census Bureau figures charted by Bloomberg Businessweek.

Houston is at the vanguard of converging demographic trends caused by declining birth rates and an immigration policy focused solely on enforcement, which constitutes a labor force removal without plans for replenishment. As I write in Reconstructing Immigration, it’s a recipe for making America smaller and poorer.

It’s already evident in neighborhoods like Gulfton, in southwest Houston, known as the city’s Ellis Island. It’s a patchwork of cheap apartment complexes built for would-be urban cowboys chasing the oil booms of the 1970s and later occupied by immigrant families after the 1980s bust. Gulfton is where newcomers land, so it’s not surprising it’s where the slowdown first shows up.

At Taqueria Mexico, a Gulfton fixture since 1982, manager Jose de Jesus Guzman told Bloomberg that the number of customers has fallen 40 percent since Donald Trump returned to office. The construction workers who used to pack the place at lunch are staying home. “A lot of people are scared of going out, even to work,” he said.

The on-ramp

Gulfton is like a freeway on-ramp. New arrivals start there, get established, and then, once they’re up to speed, merge into the suburbs, the exurbs or inner-loop neighborhoods. That pipeline has helped Houston add 3 million people this century, and it’s the reason that a quarter of its nearly 8 million residents are foreign-born.

Fulshear, a small community 30 minutes west of downtown, was the second-fastest-growing city in the country last year, swelling to almost 65,000 residents from 17,000 in 2020. Its mayor, Don McCoy — who also heads the local chamber of commerce — told Bloomberg that half of Fulshear’s newcomers come from Harris County and other parts of Houston, and many of the rest come from other countries. As Houston gets fewer arrivals, so will Fulshear. “We’re becoming a suburb that has seen incredible growth,” McCoy said. “But that may be starting to plateau.”

Meanwhile, in Gulfton, bus ridership jumped 48 percent between October 2022 and October 2024, to 28,630 riders a month, but hasn’t reached that peak since. The Houston Independent School District lost 4.5 percent of its students in the last school year. Las Américas Newcomer School, which taught English to immigrant middle-schoolers in Gulfton, closed this year because no new kids were arriving.

Across the Sun Belt

The same trend is emerging across the Sun Belt. Of the 14 southern and western states, 12 grew by less than 1 percent in 2025, and 13 grew more slowly than their historical trend. Bloomberg’s analysis found the Sun Belt as a whole grew just 0.9 percent, its sharpest slowdown since the 1960s, excluding the pandemic and recessions.

Brookings demographer William Frey found that immigration into the nation’s 56 largest metro areas fell from 2.06 million in 2023–24 to 969,000 last year. All 56 saw fewer immigrants, and all but one grew more slowly or lost population. Dallas’s immigration fell 52 percent. Houston’s fell 41 percent.

Nationally, the U.S. population grew just 0.5 percent in the year ending July 1, 2025, to about 342 million — half the previous year’s pace. Net international migration dropped from 2.8 million to 1.3 million, and the Census Bureau estimates it could fall to 321,000 by mid-2026 if current trends continue. That slowdown is compounded by falling birth rates and an aging population that leave America facing its first population decline in history.

The 2025 Census numbers capture only the first few months of Trump’s second term. We haven’t seen the full effect of deportations or the voluntary departures that have followed. The next round of data is likely to look worse.

Immigration isn’t the whole story. Joe Wadford, an economist at the Bank of America Institute, told Bloomberg that domestic migration is shifting too, with Americans increasingly moving to Midwestern cities such as Indianapolis, Minneapolis, and Columbus rather than the Sun Belt. High interest rates are weighing on housing everywhere. But in Harris County, international migration was the difference between growing and shrinking.

“Without the bodies. . .”

Economic growth comes from more workers or more output from each worker. Productivity gains, however, take longer. Adding workers is faster, and the Sun Belt has relied on it for decades. The number of workers living in the region has quadrupled since 1960, and the region now holds a third of the nation’s labor force.

But the trend is reversing. Bureau of Labor Statistics data show Houston experienced its biggest contraction in potential workers this century, outside the pandemic, in the first half of 2026. Statewide, the Dallas Fed says the Texas civilian labor force — the pool of available workers — shrank in the first half of the year for the first time since the pandemic. That happened even as higher oil prices and billions of dollars in AI investment pushed up the number of people with jobs.

Pia Orrenius, a labor economist at the Dallas Fed, calls Houston a “poster child” for what happens when you cut off immigration. Texas isn’t headed for recession, she says, but it’s unlikely to keep producing the job growth it has in the past. “Without the bodies, we’re not going to have the job growth,” she told Bloomberg.

The shortage shows up first in industries that depend heavily on immigrant labor. Houston-area residential building permits fell 14 percent in the first seven months of 2026, as builders complained they couldn’t find roofers or get crews to show up for fear of immigration raids. Redfin says Houston’s pending home sales are falling at the second-fastest rate among major metros. The Dallas Fed’s Beige Book reported slowing home sales in areas that had been drawing immigrants, and Dallas Fed economists say they’re hearing from developers who are scaling back or abandoning projects. Builders who planned for endless growth may end up with more homes than buyers.

Elder care is another pressure point. At Seven Acres Jewish Senior Care Services, two-thirds of the 195 employees are foreign-born. Many are nearing retirement just as an aging population needs more care. “We’re really worried about needing more and more people,” CEO Marsha Cayton said. “How do you replace those?”

Fewer workers also means fewer taxpayers, which means less revenue and more strain on programs like Social Security that depend on workers paying in. Those costs won’t show up in a single year’s data, but they build over time.

No shortage of denial

The Trump administration continues to ignore this growing problem. “There is no shortage of American minds and hands to grow our labor force,” White House spokeswoman Lauren Bis said in a statement to Bloomberg, pointing to apprenticeships for native-born workers and visa allotments for seasonal and temporary labor.

Steve Kean, who heads the Greater Houston Partnership, makes a different argument: Houston is young, with more births and fewer deaths than much of the country, and that natural increase will keep the region growing even with fewer immigrants.

Neither argument squares with the data so far. If there were a deep reserve of untapped domestic workers, Texas wouldn’t be watching its labor pool shrink while employers are adding jobs. And Houston’s natural increase, combined with domestic migration, wasn’t enough to keep Harris County growing in 2025 without newcomers from abroad. Bill King, who studies the city’s demographics at Rice University’s Baker Institute, dismisses official projections that the metro area will reach 10.7 million people by 2050 as “rah-rah civic cheerleading.”

Some of Houston’s business leaders are worried, too. Steve Stephens, CEO of Amegy Bank, says the full economic impact of the slowdown hasn’t hit yet. “But it is coming,” he told Bloomberg. “If you don’t have that, you can’t field the jobs, then your GDP’s not going to grow.”

Boom, bust, repeat

Houston has been through a population shock before. When the oil bust of the 1980s emptied Gulfton’s apartments of young professionals, immigrant families moved into the cheap units. Many became citizens under the 1986 Reagan reforms, opened businesses, and built the neighborhood into the city’s front door. Immigrants did much of the work of the recovery.

For decades, Texas and other Sun Belt political leaders have touted population growth as proof that their low-tax, light-regulation model works. People vote with their feet, they argued. Many of those feet belong to immigrants. A growth model that depends on people arriving can’t survive a policy designed to make them leave.

“People don’t come here for the weather,” Stephens said of Houston, which this time of year feels like a wet dish towel, heated in a microwave and thrown over your head. “They don’t come here for the mountains. It’s all about opportunity and economics.”

Strip away the politics and immigration comes down to simple math — the number of jobs that need doing measured against the number of people to do them.

Enforcement-only immigration policies are creating a detour to Houston’s years of growth, and the rest of the Sun Belt won’t be far behind. Only when our leaders are willing to take an honest look at the math and reform our immigration laws can we get back on the road to prosperity.