Wednesday, April 12, 2017

Forbes on Houston's winning formula for affordability, housing supply, and urban density

This week I'd like to talk about a couple of Scott Beyer's great pieces in Forbes.  The first is "Houston, Dallas & New York City: America's Great 3-Way Housing Supply Race".  Conclusion:
"These statistics are glaring, and show that the urban housing affordability crisis, and its solution, is far simpler than many pundits suspect. In their ongoing quest to satisfy their anti-growth biases, they've settled on demand-side responses (read: government subsidies) that ignore or worsen the fundamental problem of under-supply; while they continue to blame various third party boogeymen, including developers, landlords, Airbnb hosts, techies, hipsters, Asian families buying second homes, and migrants in general. 
But, again, the Census data sheds light on the actual nature of the issue: some metros in America are building a LOT of housing. Other metros may think they are, but actually are not. And housing prices within given metros are either stabilizing or skyrocketing based on this decision. While it's not clear just how many units metros like San Francisco need to reach market equilibrium, it's obviously more than 10,000 per year, given that the population is growing by 60,000 people annually. Meanwhile, only 3 of these major destination metros are issuing truly significant permit numbers, and only two of them--Dallas and Houston--are doing so without tacking on a bunch of added regulatory costs. Not coincidentally, they're also America's two leading affordability success stories, growing by the largest raw population numbers, yet maintaining some of the cheapest housing."
What's our secret sauce to affordable housing supply and how did it come to be? I suspect a big part of it is state law strictly limiting the land-use powers of counties (from Texas’ historical independent rancher/farmer/cowboy culture of “keep government off my back”), so unincorporated counties outside of cities are pretty unregulated.  That, in turn, puts competitive pressure on incorporated cities to not put much regulation on developers, or they will simply drive them outside the city limits – and cities certainly want that increased property tax increment from development. Texas being a sales and property tax state without an income tax is probably also a driver of developer friendliness – it’s how cities and counties increase their revenue. Finally, state law on MUDs (municipal utility districts) makes it easy for a large-scale neighborhood developer to borrow money for greenfield infrastructure in unincorporated counties (water, sewer, drainage, streets) to be paid off by taxes inside that district.  I recently met with a New Zealand official visiting Houston to learn about the MUD system to see what he could bring back to NZ to help alleviate their unaffordable housing crisis with new supply, and they're looking very seriously at implementing something similar over there.

Looking at the big picture, I’d say we have a country founded on individual liberty and freedom that somehow created a culturally-accepted loophole that government can put as many restrictions as they like on what you do with your land with no penalty or cost to them. Texas has simply embraced the country’s original principles more fully than most states.

Scott's second Forbes article is "Houston Or Portland: Which City Is Doing Urban Density Better?" with this great conclusion:
"So which metro area--Houston or Portland--is doing urban density better? In the objective sense, Houston is, by fitting in more people. Subjectively, it depends on one's tastes. Portland's dedication to historic preservation, low-rise, so-called tasteful development, and pedestrian orientation is indeed charming. The core area feels like a slightly bigger version of an antiquated liberal arts college town, where the pace of life is slow and the people are intentionally offbeat. The fact that this sits amid the backdrop of cloudy skies and evergreen-covered hills gives the place an ethereal quality. 
Houston, meanwhile, is too busy urbanizing to even try and achieve this pretension. It is building upward, outward, and everything in-between--and is doing so rapidly and unapologetically, with the metro area population increasing since 2010 by 852,054, compared to 208,946 in Portland. This has made Houston, inside and outside of its core, a completely different place than Portland: more grandiose, vertical, diverse, global, monied and in your face. Indeed, there is an extent to which Houston, with its large gleaming skyscrapers and overt street-level multiculturalism, almost makes Portland feel like a cow town. 
This is not to say that one is obligated to like--much less live in--either Houston or Portland. But it does make a statement about markets versus planning, in respect to urbanization. If people want cities--as many Americans seem to--they should embrace growth, markets and deregulation; it they want "towns", they should embrace planning, regulation and a collaborative process that allows community interests to navel-gaze about every last land-use decision
I certainly know what type of place I'd rather live in."
Hear, hear!

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Saturday, April 01, 2017

City bike plan expanded to include freeways

After passing the bike plan last week, the City of Houston is now looking to expand it further by integrating freeways into the system to enable faster long-distance commutes. Eventually, separated bike lanes will be added to the left shoulder of most major freeways, enabling cyclists to simply enter the freeway using the regular ramps, merge left a few lanes, and then enter the bike lanes.  Until the bike lanes are added, cyclists are being encouraged to use the lane stripes as somewhat narrow bike lanes between rows of traffic (as demonstrated in the picture below), which has the added benefit of allowing multiple parallel cycling lanes and passing.


For safety, cyclists are encouraged to match speed with the flow of traffic, although with Houston congestion they will be going faster in most cases.  In fact, accidents are expected to be minimal given how little cars actually move on Houston freeways.  But please don't be this guy - at least wear a helmet. Safety first.


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Hope you enjoyed this year's April Fools post ;-D 
Here are previous years if you missed 'em and would like a chuckle:


Monday, March 27, 2017

Bike plan prudence, how spontaneous order keeps Houston affordable, suburbs winning, high cost of zoning, and more

Before getting to this week's items, a short comment on the city's new bike plan: while I’m all for making biking better/easier/more popular (especially along bayous and power-line rights-of-way), I’m a bit worried that some activists are using it as a smokescreen to attack cars (reduce speeds, take away lanes for bike lanes, etc.), which of course carry magnitudes more people than bikes do, especially in Houston. It would be the equivalent of disrupting/slowing big jets at IAH so little single-engine prop planes have an easier time, and how much sense would that make?

I feel the same way about initiatives to reduce traffic deaths: noble intention, and we should certainly work on it, but within the realm of prudence. For example, radical reductions in speed limits would certainly reduce traffic deaths, but it would also slowly suffocate cities from a lack of mobility. Thank goodness autonomous technologies are coming to save us from our own bad driving...

There are a heck of a lot of new items this week, so here we go:
"Increased frequencies did far more to increase ridership than fare reductions, the paper found. So-called “choice” riders are most likely to value their time more than money (at least, within the range of transit fares), so this makes particular sense in areas where most people already have cars. 
The Antiplanner remains convinced that transit will soon be rendered obsolete by shared, self-driving cars. But until that happens, there seems to be little reason in most cases for cities to build new rail lines, as innovative bus services should be able to attract riders at a far lower cost."
"Contrary to conventional wisdom, many US cities have a lot to learn from Houston. With tight development restrictions, out-of-date urban planning regimes, and burdensome regulations forcing middle- and lower-class Americans out of West Cost and Northeastern cities, Houston’s mix of affordable housing and economic opportunity is more valuable than ever. As other cities have attempted to maintain tight, centralized control on urban and economic development—exemplified by a recent push by Dallas to shutter local businesses in order to attract chains—Houston has opted to take a back seat to residents, entrepreneurs, and civil society groups in cultivating economic development and crafting urban communities. 
Some continue to blame Houston’s unique approach for everything from flood damage—as if imposing side setbacks and keeping delis out of neighborhoods would avoid statewide flooding—to remaining pockets of poverty within the city. Certainly some form of citywide coordination on data collection and service allocation in pursuit of efficiency and equity makes sense. Yet past attempts to impose greater centralized urban planning on Houston have been defeated by overwhelming working-class opposition every time. Those residents know something many in the urban planning world don’t. It is well past time that we start taking Houston’s success seriously."
"According to a recent paper by the economists Chang-Tai Hsieh, from the University of Chicago’s Booth School of Business, and Enrico Moretti, from the University of California, Berkeley, local land-use regulations reduce the United States’ economic output by as much as $1.5 trillion a year, or about 10 percent lower than it could be."

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Sunday, March 19, 2017

Rodeo tops SXSW+Mardi Gras, #2 zoo!, defending our diversity, traffic better than you think, top rankings, and more

Lots of small items to catch up on this week:
"Also like Houston--which is routinely one of the nation's fastest-growing metros--the rodeo's overall 20-day attendance has spiked recently, going from under 2 million in 2009 to nearly 2.5 million last year. Attendance figures from the first 6 days of this year's rodeo suggests this number will increase yet more in 2017. Compare this with SXSW or Miami's Art Basel, both of which draw under 100,000 annually; or even Mardi Gras, which drew an estimated 1.4 million in 2017."
"Houston: Findings and Implications
The 2017 Metro Monitor’s Inclusive Growth Index shows that the Houston metro area did not make progress on economic inclusion, now ranking 64th overall. Houston dropped from 4th to 5th on overall measures of economic growth (now ranking 5th) but improved on prosperity, now ranking 2nd overall. Additionally, Houston posted the fastest productivity growth from 2010-2015, and posted the second-fastest gross metropolitan product (GMP) growth at over 28 percent, fueled by its energy, wholesale trade, and hospitality sectors as well as significant in-migration. This GMP growth also contributed to one of the largest increases in the average standard of living, but also saw one of the largest increases in relative poverty, as improvements in median wages within the metro area did not appear to extend to workers in the bottom half of the income distribution."
I'll make my point about this again: if coastal cities make themselves unaffordable to the poor and working class - so they move away - they look better on these poverty and median income stats, but did they really do a good thing? I would argue they didn't.  Another case of twisted stats.
Finally, the National Review on Houston's multiculturalism, sparked by David Brooks' column quoting me on Houston.  He does make some good points (including that the coasts have their ugly as well!), but I’m not sure I’m totally clear on his overall point. Brooks simply said there is an alternative model of conservative Republicanism that is immigrant friendly, and he pointed to Houston and Texas.  All this guy’s describing of the nuances in Houston and Texas don’t seem to really counter that point.  Yes, other cities can’t replicate our energy economy, but the rest of the Texas triangle cities aren’t the energy capital of the world and they thrive with immigrants as well.  And he ignores how well we’re also assimilating Asian cultures, and Texas certainly does not have a long history of that!

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Wednesday, March 08, 2017

The best posts from the first dozen years and million pageviews

Today is the 12th birthday of Houston Strategies.  In the immortal words of the Grateful Dead, what a long strange trip it's been. Coincidentally, we should get to one million total pageviews in the next week or so (standing at 995,842 as I write this, not counting pageviews over at the Chronicle). In honor of those milestones, I've decided to update my best posts from the first 1,000, which is now over three years out of date, by pulling from my annual highlights posts. As you skim this list, I hope you find some of interest that you missed, forgot, or may have been posted before you discovered Houston Strategies.  Enjoy.  As always, thanks for your readership.
-Tory

2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005

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Monday, February 27, 2017

NYT David Brooks on Houston as a model city + our evolving urban form

Just a couple of items this week. First, I got quoted in David Brooks' NYTimes column last week on immigration, with Houston as a model city. Key paragraphs (bold mine):
"For the life of me, I can’t figure out why so many Republicans prefer a dying white America to a place like, say, Houston. 
Houston has very light zoning regulations, and as a result it has affordable housing and a culture that welcomes immigrants. This has made it incredibly diverse, with 145 languages spoken in the city’s homes, and incredibly dynamic — the fastest-growing big city in America recently. (Personally, I wish it would do a bit more zoning — it’s pretty ugly.) 
The large immigrant population has paradoxically given the city a very strong, very patriotic and cohesive culture, built around being welcoming to newcomers and embracing the future. As the Houston urban analyst Tory Gattis points out, the Houston Rodeo has so many volunteers it has recently limited their special privileges. In 2015 it had the healthiest philanthropic sector in the nation. The city is coming together to solve its pension problems better than just about any other big place. 
Cotton and Perdue are the second coming of those static mind-set/slow-growth/zero-sum liberals one used to meet in the 1970s. They’ll dry up the river. I wish they had a little more faith in freedom, dynamism and human ingenuity."
Hear, hear! For the record, I'm not a fan of the ugly comment either, but you can't win 'em all. Still some great recognition for our city.

That leads me directly to the second item this week, Wendell Cox's piece on New Geography about Houston as an example of the evolving urban form. A lot of good excerpts in this one (bold mine):
"Houston is a city (metropolitan area) of superlatives. The most recent Brookings Institution data shows that Houston has the seventh strongest per capita economy (gross domestic product) in the world (Figure 1). This places Houston above New York and more surprisingly, perhaps, other cities perceived to have strong economies are far below Houston and outside of the top 10, such as London, Tokyo and Chicago." 
Decentralized employment which is not rail-transit friendly - see Figure 6:
"The central business district (downtown) ranks eighth in total employment in the nation and also experienced growth. The Texas Medical Center is the largest life sciences center in the world. The center is located south downtown and rivals some of the nation’s largest central business districts, larger than Minneapolis and nearly as large as Denver ,, with more than 100,000 employees (see photograph above). There are other large centers, such as the Port of Houston, the Galleria (Uptown) and the Energy Corridor. Houston is one of the best examples of a decentralized city, with major employment centers throughout." 
"Houston is often characterized as a “sprawling” urban area. In fact, however, Houston has a higher than average urban density for the United States (by eight percent) and an urban density approximately 75 percent higher than Atlanta and Charlotte and denser than Philadelphia and Boston. " 
"Since 2010 Houston has led the 53 metropolitan areas with more than 1,000,000 population in net domestic migration.
"There are at least two important keys to Houston’s attractiveness. Obviously, its strong job-creating economy has opened career opportunities for people from other parts of the country. In addition, Houston’s favorable housing affordability has been an important factor. Seminal recent academic research has pointed to the importance of housing affordability in attracting domestic migrants " 
"Houston has been more successful in controlling traffic congestion than many other cities. In 2015, Houston tied with Boston for the 11th worst traffic congestion in the United States, according to the TomTom Traffic Index (Figure 10). This is a far better rating than in the middle 1980s, when the Texas Transportation Institute ranked Houston as having the worst traffic congestion in the nation. 
Since that time, Houston has managed to have spectacular population growth, yet has kept up with it by expanding its freeway and arterial systems, along with traffic management improvements. Los Angeles, San Francisco, Seattle, San Jose, New York, Honolulu, Miami, Portland, Washington, and Chicago have seen their traffic congestion become worse than in Houston over the same period. Houston is larger in population than all but three of these nine metropolitan areas (New York, Los Angeles, and Chicago), more than twice the size of San Jose and Portland and nearly seven times that of Honolulu. Further, exhibiting the association between greater traffic congestion and higher population density, all cities ranked worse than Houston have higher urban densities."
Another interesting tidbit to note is the remarkable parity between the City of Houston, the rest of Harris County, and the outer burbs of the metro area in figures 3 and 4.

After the Oscars last night, I should probably mention that all of the above is true about Houston as an actual winner, and not a mixup of mistaken identity with Dallas... ;-D

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Saturday, February 18, 2017

Delay renovating NRG, don't incentivize local movies, USA rail beats Europe, Astrodome, anti-zoning PSA, visualizing our density, good gentrification, and more

Quite the backlog of items to get through this week:
"While the gentrification narrative (having rich neighbors makes life harder for poor people) is common, news stories seldom promote the narrative of concentrated poverty (having mostly poor neighbors makes life harder for the poor), which is both more prevalent and demonstrably more harmful."
Finally, Houston beats Dallas handily for Super Bowl hosting, but we're still not likely to get it again anytime soon. There's just too much new/renovated stadium competition out there. In fact, despite their last disaster, Dallas is likely to get it again before we do because of their palatial $1B stadium. Other cities in the pipeline include Atlanta, Minneapolis, Miami, NOLA, Phoenix, and a $2 billion behemoth being built in LA (count on at least two Super Bowls there after it's built). If we're going to renovate NRG to make another run at a Super Bowl, it sounds like we need to wait at least half a decade or more for the NFL's hosting backlog to clear out before doing it. Why invest a ton in NRG now when the upgrades may already be out of date by the time our next potential Super Bowl slot opens up??

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Tuesday, February 07, 2017

Super Bowl kudos, Houston keeps winning, Texas HSR questioned, and more

First the Super Bowl items this week, which was the biggest NFL comeback/collapse since... well, this, which I remember all too well. From everything I've seen and everybody I've spoken to, we pulled off the hosting with flying colors. Congrats and thanks to everyone involved for their hard work.  Unfortunately it could be quite a while before we get another one - too many cities are building new stadiums or upgrading old ones (Miami, NOLA) - each guaranteed at least one Super Bowl - and I'm betting the $2.6+ billion behemoth in LA will get more than that.
And moving on to the non-Super Bowl items:
"I sat down with Angela Blanchard last year at a coffeeshop in the Third Ward, a historically black neighborhood about two miles from her house. She had walked there to meet me, so I brought up the concern of some self-appointed urban advocates who want to redesign Houston to make it “walkable.” She laughed: 
'I’m sorry. I didn’t mean to roll my eyes, but everyone is trying to create these precious neighborhoods. I remember being at a conference and someone said the thing we need to do with poor neighborhoods is make them walkable. I thought this was absolutely hilarious. If you’re in a poor neighborhood, your neighborhood is walkable. It might not be a nice walk or a fun walk, but you walk. … I actually love Houston for its total, messy, sprawling randomness. I get invited to conferences where people talk about Houston with frowns on their faces. People haven’t been able to figure out our city and how to make it smart and precious like other cities that no one can afford to live in. My biggest concern for this city is that it remains a place where you can start at the bottom and work your way up. Where it’s a good city to begin in, and where if you have a dream and water it with hard work, it amounts to something.' "

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