I have family that live all along the gulf coast. As a general rule of thumb, it takes a Catagory 3 or greater hurricane to cause them to evacuate their homes. At that point, a well-constructed home can receive significant structural damage and the likelihood of sustained power outages can occur.
Obviously, if you live in flood-prone areas or in cheap housing, you'd want to be alert to lesser storms.
Houston will never get the sort of damage seen in New Orleans because Houston is not below sea level and is about 50 miles inland. But a direct hit from a Cat 5 would inflict major damage and hardship that would take years to recover from.
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