Although the city is still rebuilding with new private investment and hundreds of millions in federal disaster money, Galveston finds itself at a crossroads and confronting fundamental questions: Will its population continue to shrink until it becomes nothing more than a husk of tourist attractions? Will the city attract new industry?
The city’s population was declining for decades before Ike reduced it from 57,000 to about 48,000. Restoring the city’s population is crucial to establishing a stable tax base, especially as the University of Texas Medical Branch and Texas A&M-Galveston pay no property taxes on the large tracts they occupy.
“The biggest problem is not the creation of industry, it’s getting people who work here to come back to live here,” said Harris “Shrub” Kempner, head of Kempner Capital Management and a member of the city finance advisory committee.
Although the Island’s 8.1 percent unemployment rate mirrors the nation’s, it’s higher than Houston’s at 6.5 percent and masks an unusually high ratio of population to jobs because so many people who work in Galveston live off the island, Kempner said.
The city needs a population of at least 50,000 to continue getting the level of federal aid it received before the storm. Restoring the population is a priority for both of the mayoral candidates preparing for a June 23 runoff, incumbent Joe Jaworski and challenger Lewis Rosen. Both say they want the population eventually to grow to 70,000.
A perception of low-performing schools once contributed to flight from the island, but that perception has changed, said Galveston school district Superintendent Larry Nichols. Discipline and test scores have improved, he said, and affluent residents like [UTMB president Dr. David] Callender are sending their children to public schools despite the availability of two charter academies and a Catholic school.
To entice people to live on the island, the city must overcome significant hurdles.
The scattered lots available for building don’t lend themselves to the same cost efficiencies developers can realize on the mainland, where large tracts are available. The potential for hurricanes is frightening to some. High insurance costs and stricter building codes on the coast make housing more expensive. Galveston lacks large retail outlets, forcing residents to leave the island to shop.
And the island, despite its natural attractions of sun, sand and surf, has a reputation for shabbiness.
Barton Smith, a University of Houston economics professor emeritus, said efforts to attract population and new business won’t be successful until Galveston overcomes the blight that motorists see coming in on Broadway Boulevard, and the industrial ambience of Harborside Drive that greets cruise ship passengers.
Really, this is a marketing question. What is it about Galveston that would make someone want to live there? That’s what they need to figure out. Is there an Island version of ttweak that can come up with a snappy catch phrase and a campaign to back it up? I know what draws people to a city like Houston, and I know what draws people to the various suburbs, and I know what draws people to small towns and the country. What is it about Galveston that makes people want to live there? Not everyone, of course, just that subset of people who would live there if given a reason that made sense to them. I wish them the best in figuring it out.