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The proposed federal film incentive could reshape U.S. production. Houston must be prepared to capture—and retain—the opportunity.

By Jackelyn Viera Iloff · SouthCoast Alliance

The Motion Picture Association’s new economic-impact study should command Houston’s attention.  According to the report, a proposed 20% federal tax credit on qualified U.S. labor could generate an additional $125.3 billion in domestic film and television production spending between 2027 and 2035. It projects approximately $249.1 billion in added economic value and an average of 143,500 full-time-equivalent jobs annually. By 2035, annual U.S. production spending could reach $38.7 billion—more than twice what is projected without the incentive.

For Houston, this could be transformative—but only if we understand what a federal incentive would and would not do.

A federal credit would help make the United States more competitive with countries such as the United Kingdom, Canada and Australia. It would not determine which American city receives the work. Once productions return to the United States, Houston will still compete with Atlanta, Los Angeles, New York, New Mexico, Louisiana and other established production centers.

That is where Houston’s opportunity begins.

A powerful combination of incentives

The proposed federal incentive is modeled as a transferable 20% credit on qualified U.S.-resident labor, with possible 5% increases for independent productions and work performed in FEMA-declared disaster areas. It is intended to operate alongside—not replace—existing state incentives.

Texas currently offers grants that can reach as high as 31% of eligible in-state spending under the Texas Moving Image Industry Incentive Program.

If structured properly, the federal and Texas programs could create one of the country’s most compelling financial environments for production. Houston can strengthen that advantage through local incentives, streamlined permitting, competitive facilities and coordinated services.

The federal proposal helps answer, “Why produce in America?” Texas and Houston must then answer, “Why here?”

Houston must compete beyond production days

The greatest opportunity is not simply attracting crews for several weeks of principal photography. Houston should build an industry that retains spending and employment throughout the entire life cycle of a project.

That includes:

• Soundstages and virtual-production facilities
• Post-production, editing, sound and visual effects
• Animation and digital asset creation
• Artificial intelligence and production technology
• Distribution, audience analytics and content monetization
• Education, apprenticeships and workforce certification
• Production finance and private investment

This is the foundation of Houston’s emerging C-Tech™ economy—the convergence of storytelling, technology, production, post-production, artificial intelligence, distribution and investment.

Houston already possesses many of the ingredients: a large and diverse population, two major airports, global corporate leadership, strong universities and community colleges, experienced production professionals, advanced technology industries, an international visual identity and a cost structure that can compete with traditional entertainment centers.

What Houston does not yet have is a fully coordinated production ecosystem operating at sufficient scale.

The workforce must come before the wave.

If the federal incentive succeeds in bringing billions of dollars in production back to the United States, every competitive market will face the same question: Do you have enough trained people to perform the work?

Houston must begin preparing now—not after productions arrive.

That means developing clear career pathways for electricians, carpenters, drivers, camera teams, designers, editors, visual-effects artists, accountants, caterers and other skilled workers. It also means connecting Houston Community College, universities, unions, production companies and technology employers around training that leads directly to employment.

Film incentives are often discussed as support for actors, directors and studios. In practice, production spending reaches deeply into construction, transportation, hospitality, equipment rental, restaurants, real estate and hundreds of local small businesses.

Capital will follow credible infrastructure

The MPA report also carries an important message for Houston investors.

A federal incentive could reduce production risk and improve the financial structure of qualifying projects. Combined with Texas incentives, it could make investment in studios, post-production companies, virtual-production facilities and independent content considerably more attractive.

But incentives alone do not create a sustainable industry. Investors will look for experienced management, reliable deal structures, qualified crews, distribution strategies and a consistent pipeline of productions.

Houston must connect its film community with its family offices, private-equity leaders, venture investors and corporate partners. The city should not only host productions financed elsewhere; it should help develop, finance, own and distribute intellectual property from Houston.

The window is open—but it will not remain open indefinitely

The federal incentive described in the MPA study is not yet enacted law, and its final provisions could change. The report is based on an illustrative model and assumes that existing state programs remain in place.

Nevertheless, the direction is clear: national leaders, studios, unions and production workers increasingly recognize that America must compete for an industry it once took for granted.

For Houston, this is not the time to wait for Washington.

It is the time to organize our facilities, workforce, incentives, investors and technology partners so that when production expands, Houston is ready to capture a meaningful share of it.

A federal incentive could bring production back to America. Our job is to make certain that more of it comes to Houston—and stays here.

.Sources:

MPA/Olsberg·SPI Economic Impact Study

Variety: MPA Projects Federal Film Incentive Would Double U.S. Production

Texas Moving Image Industry Incentive Program