I heard a friend once call Houston a “city of commerce.” He described it as a city located by a bayou extending itself to the world while being engulfed in trade, culture, and fantastic food. What creates an environment of such possibilities?

It starts with Houstonians. They are from all over the world, creating their own businesses and working in a highly diverse economy. Houston is composed of a religiously, politically, and ethnically diverse group of people. 

Much like free markets that allocate resources efficiently and effectively without any direction, as mentioned by Adam Smith’s “invisible hand” theory, harmonious integration of this diversity in Houston generates a vibrant economy. One aspect contributing to this success is a lack of zoning laws. Houston is the only large metropolitan city in the country without such laws.

There has been much written about the link between the lack of zoning laws and low housing prices in Houston. Low housing prices not artificially propped up by local regulation helped insulate Houston’s housing market from a steep drop in housing prices found in many places across the nation during the late 2000s. An unhampered housing market allowed home prices to reflect supply and demand interaction more effectively than in areas afflicted by strong regulation. When there was a higher demand for houses, construction was able to satisfy this demand with great ease. Other cities with strict zoning laws weren’t as fortunate, for they saw a stronger boom-bust cycle in their housing market.

Along with a relatively unhampered housing market, Houston is also able to accommodate the needs of other industries by not directing the location of office buildings, retail stores, and manufacturing facilities. This freedom to choose allows individuals to determine the best place to fulfill their desires.

The progress of Houston, recently recognized as “the most ethnically diverse in the country,” can be linked to its design, or lack thereof. According to a study, specific areas within the Bayou City are culturally diverse and heavily desegregated. Places like Missouri City and Pearland show the largest differences in demographics.

What results is a city recognizing the importance of an evolving society. Houston allows entrepreneurs to start a business not near their place of residence with minimum cost. The lack of zoning laws allows human behavior to make voluntary decisions connecting cultures based on individual needs and interests.

When individuals are free to choose where to work, live, and socialize, they create a melting pot of social and economic interactions. Though imperfect, America’s history has continued to thrive with an accessible market of various cultures and industries much like what is found in Houston.