Houston City Council approved an agreement on September 2 that would permanently bar the city from attempting to annex The Woodlands, in exchange for approximately $50 million in near-term funding for Houston.

The deal marks the culmination of years of negotiation between Houston and The Woodlands, one of the most affluent master-planned communities in the Houston metropolitan area. The Woodlands has operated as a special purpose district rather than an incorporated city, leaving it vulnerable to potential annexation by Houston under Texas municipal annexation laws.

Under the terms approved by Council, Houston will receive roughly $50 million in funding commitments from The Woodlands. In return, the city relinquishes all future claims to annex the community, providing The Woodlands with the long-sought certainty over its governance structure.

The agreement still requires approval from The Woodlands Township Board of Directors, which is expected to consider the measure in the coming weeks. If approved by both sides, the deal would end a question that has loomed over the relationship between the two entities since The Woodlands was established in 1974 by oil industry magnate George Mitchell.

The Woodlands has grown into a significant economic engine in its own right, hosting major corporate campuses including ExxonMobil’s sprawling 385-acre complex, which opened in 2015 and consolidated thousands of employees from across the region. The community’s population has surpassed 120,000 residents, making it larger than many incorporated cities in Texas.

For Houston, the $50 million in near-term funding could help address budget priorities as the city navigates fiscal challenges. The agreement also provides certainty for businesses operating in The Woodlands, which have occasionally faced questions about future tax and regulatory implications should annexation occur.

The vote comes as Houston continues to navigate its relationship with surrounding communities in the metropolitan region, which has grown to more than 7 million residents and ranks as one of the fastest-growing major metro areas in the United States.

Sources: FOX 26 Houston, Houston Partnership.