Business and restaurant owners across the Lake Houston area have said they are struggling as operating costs increase due to rising inflation and a more expensive rental market.
The overview
While more than a dozen businesses in the area have closed dating back to 2024, others remain open but are struggling to make ends meet.
Andrew Landry, who opened Juicy Heads and Spicy Tails in Humble in 2023, said he was forced to shut down his business in 2024 after freezing temperatures depleted the area’s supply of crawfish.
“That was the primary reason that I sold the business, and then, obviously, the cost of food, utilities and rent were all going up at the same time,” Landry said.
Landry soft opened a new restaurant, Landry’s Creole and Cajun Seafood, in mid-April, but he noted he was required to alter his business plan moving forward to account for increased costs.
While Ray Hernandez, president and CEO of Partnership Lake Houston, said the rising cost of rent and increased costs due to inflation have caused some difficulties for area businesses, he said business owners have access to several loans and counseling options aimed at easing their struggles.
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A closer look
Brett Nuttall, who opened Pop Drinks Atascocita with his wife in 2024, said he’s had to reduce the size of their supply orders to reduce costs.
“We just can’t keep dollars sitting on the shelves for undetermined periods of time,” Nuttall said.
Nuttall said the strain caused by inflation might lead to higher prices at his store.
“It’s all we’ve got left to do,” Nuttall said.
Landry said he is taking a different approach with his new business, noting he’s aiming to reduce the number of orders he places by buying more food with each order.
“We’re buying in bulk less frequently, so we’re fully stocked at all times,” Landry said.
From 2021 to 2025, the average rental rate for retail space in the Lake Houston area rose from around $18.25 per square foot to $25.10 per square foot, said Ashley Brown, Realtor with Red Door Realty & Associates and The Polompsky Team.
“Even a 1,500-square-foot space can easily cost $4,000 or $5,000 a month once you factor in taxes, insurance and maintaining your business,” she said.
Additionally, Brown said new businesses tend to sign shorter leases, leaving them open to quick rate hikes once their initial contract expires.
Why it matters
Brown noted members of her realty team strive to prepare potential business owners for the reality of opening their stores before they finalize their lease agreements.
“You really want to strategize to make sure your operating costs and your projected revenue makes sense for that location,” Brown said. “If rent makes up more than 10% of your income, you’re going to end up really biting the margins there.”
During a Feb. 17 presentation to Partnership Lake Houston, Winston Labbe, deputy district director for the U.S. Small Business Administration, said the Houston area is home to three Small Business Development Centers, which provide free counseling and training to small business owners.
“They help small businesses with whatever they need from A to Z—permitting, licensing, certification,” Labbe said. “They can help with that free of charge.”
What they’re saying
“What’s happening globally, in our country, the state, and our region—all those elements affect the local folks walking in the door of a local business.” Hernandez said.“Small businesses can definitely thrive in this area. The pathway for success … is just making sure that they get themselves set up from the jump.” Brown said.How to prepare
In addition to the SBA’s three business centers, Labbe said the organization offers several different types of loans to businesses to cover a variety of costs.
Labbe said SBA loans range from small to large and can be used for most business purposes, including long-term fixed assets and operational costs. However, he said some loan programs set restrictions on how funds can be used.
7(a) loans: SBA’s primary program for providing long-term financing for a variety of purposes. Loans can total as high as $5 million.504 loans: A loan that can be used for a range of assets that promote business growth and job creation. Loans can total as high as $5.5 million.Microloans: Loans of $50,000 or less to help businesses and some nonprofit child care centers. Microloans are provided by intermediary lenders.