Houston and The Woodlands reach agreement on annexation and funding

The City of Houston and The Woodlands Township have approved the Third Amendment to their Regional Participation Agreement. The deal provides Houston with an immediate infusion of funds to support its general fund while offering The Woodlands long-term governance and financial certainty.

Under the terms of the agreement, the possibility of Houston annexing The Woodlands is eliminated indefinitely, provided the terms are met. In exchange, The Woodlands will relinquish $22.6 million from a shared project fund and make additional payments to Houston of $9 million in 2027, $9 million in 2028, and $9.4 million in 2030.

While Mayor John Whitmire described the arrangement as a “win-win deal,” some officials expressed concern regarding the long-term fiscal impact. Houston City Controller Chris Hollins cautioned that the agreement may trade significant future revenue for immediate cash, suggesting the city could be leaving at least $100 million in future project funding on the table.