Sunday, September 20, 2020

Dangerous HCTRA toll revenue diversions, Ike Dike, rail vs road forecasts, LA transit may go fareless, HTX and the energy transition, and more

A lot of smaller items to catch up on this week after our little diversion into aviation last week.

My lead this week is on Harris County playing games with HCTRA toll road revenue to spend it on things other than transportation, which is super dicey. The state is already in trouble with transportation because they diverted the gas tax to nontransportation needs. Now the county is making the same mistake... trading long-term prudence for short-term pet projects.  "For flood control" is PR spin, since they won't have any obligation to spend it on that. Toll money moves into the general fund where they can spend it on anything they like.  Oscar made a nice chart to show why HCTRA's money pot is such a tempting target, although he expects it may drop up to a third this year with the pandemic.


On to other items:
"Texas: Number 2 in Net Domestic Migration (just behind FL)
Texas, the nation’s second most populous state had the second largest gain in net domestic migration, at just below 2 million. During the two decades, the two largest Texas metropolitan areas, Dallas-Fort Worth and Houston moved from below the top five to positions four and five respectively."
"And it makes no difference if the analysis includes other potential explanatory factors such as population density, age, ethnicity, prevalence of nursing homes, general health or temperature. The only factor that seems to make a demonstrable difference is the intensity of mass-transit use."
"The article’s real bias is shown in a paragraph about Bent Flyvbjerg’s well-known study on transportation megaprojects. The 2007 study (of a large global database of highway and transit megaprojects) found that average traffic on highway megaprojects was 9.5% more than forecast, while the average rail megaproject ridership was overestimated by 106%. In other words, for every 100 drivers forecast to use a given highway project, 110 did, and for every 100 rail passengers forecast to use a rail megaproject, only 47 did. If anything, the forecasting problem seems to be far worse with rail than with highways but the piece only mentions highways:

And here the problem is partly political; in order to receive federal funding, transit proponents have learned to game their forecasts, inflating ridership by one-third and deflating cost estimates by one-third. This is a well-known trick, and, unfortunately, the article fails to mention it or provide any way to solve this problem."
"The problem with light rail (and the reason it is popular with government officials) is that it is an upper middle class boondoggle.  There can be no higher use of transit than to provide mobility to poorer people who can't afford reliable automobiles.  Buses fulfill this goal better than any mode of transit.  They are flexible and can reach into many corners of the city.  The problem with buses, from the perspective of government officials, is that upper middle class people don't like to ride on them.  They like trains.  So the government builds hugely expensive trains for these influential, wealthier voters. Since the trains are so expensive, the government can only build a few routes, so those routes end up being down upper middle class commuting corridors.  As the costs mount for the trains, the bus routes that serve the poor and their dispersed commuting destinations are steadily cut."

Finally, ending with a fun short video with the "top ten" places to visit in Houston. I've never even heard of #1 before, lol, so see if you agree. Hat tip to George.


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Tuesday, September 08, 2020

Where United Airlines should establish a new hub...

This week's post has nothing to do with Houston other than United has its second-largest hub here, and what's healthy for United tends to be healthy for Houston (barring a monopoly ;-).  I'm a bit of an amateur aviation nerd going back to my McKinsey days, and I had a random crazy thought this week: United has a ton of planes and crews sitting around doing nothing right now during the pandemic - they could literally create an instant hub somewhere if they wanted to (assuming they could get the gates). But where?

United actually has well-positioned hubs covering most major domestic and international regions. But they do lack good coverage in the southeastern US like Delta does from Atlanta (world's largest hub) and American does from Charlotte. Additionally, Houston serves as a great United hub to Latin America for the central and western US, but is not geographically well-positioned for serving the eastern US the way American is with its hub in Miami.  Is there somewhere United could establish a hub that does some combination of what Charlotte and Miami do for American?

The pandemic has made this even more important, as the rise of remote work is driving a huge migration from the north to Florida and even the Caribbean.  United sensed this migration early and quickly established a wide range of non-hub flights to better serve Florida.  And no matter what you think about the future of the pandemic, remote work has now been absolutely normalized.


But where should they go if they want to take this first step to the next level and actually establish a new hub?  A few options can be quickly eliminated:
  • Atlanta and Charlotte are already taken by Delta and American respectively
  • Raleigh-Durham is too close to IAD Washington DC Dulles (already a United hub)
  • Miami is already an AA hub facing increasing competition from Delta and Southwest
  • Fort Lauderdale and Orlando have incredible amounts of low-fare competition from Southwest, JetBlue, Spirit, Frontier, and others.
  • Fort Myers is too small to support a hub (679,000 MSA population) as is Jacksonville (1.5m)
The really intriguing alternative that remains: Tampa.  The Tampa Bay metro area has a population of 3.2 million, the 18th-largest metro in the country - larger than Denver, Charlotte, or Salt Lake City which all support substantial hubs.  It's also one of the fastest-growing (nearby Lakeland as well), and has manageable low-fare competition.  The housing is far more affordable than the Miami area.  It's also about an hour from Walt Disney World, the largest tourist attraction in the country (soon to be connected by the Brightline train).  And it's not just tourists - there are plenty of business travelers as well (United's core market).  Tampa has been steadily growing its corporate presence - especially financial - and it's the center of Florida's High Tech Corridor.

A friend of mine threw together some potential United route maps from a Tampa hub (hat tip to Daniel!).

Potential Domestic

Potential International

Potential United Latin America coverage IAH+TPA

As you can see, it's much better geographically from the eastern US to the Caribbean and Latin America than Houston is.  Would it cannibalize traffic from IAH?  Based on American's service to the same region from DFW and Miami (the equivalent of United's IAH and Tampa), we don't think so.  DFW has Latin service nearly as comprehensive as IAH despite American's Miami hub. The two hubs actually reinforce and support each other and give American a dominant position in Latin America.  United could challenge that dominance with a combination of Houston, Tampa, and Newark/NYC.

Florida is the third-largest state in the country at 22 million and growing fast. United needs a strong presence there to match its strength in other top five states like California (38m), Texas (28m), New York (20m), and Illinois (13m).  A hub (or at least a strong focus city) in Tampa is the best strategic option for them to tap that market. This pandemic will reshuffle the airline pecking order - why play defense when they can seize the initiative and fill a long-standing and growing gap in their route network while also putting more planes and crews to work?

UPDATE: discussion in the Airliners.net forums

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Monday, August 31, 2020

Houston held up as a model of land-use and affordable housing reform for the country, plus fleeing cities and Journey in Houston

Some pretty cool Houston items this week:
"For a proven reform, look at Houston, arguably the most pro-housing city in the country. It doesn’t have use-zoning, which means that housing — including apartments and other multifamily housing — is permitted anywhere private covenants don’t restrict it. In 1998, Houston policy makers reduced the minimum-required lot size for a house from 5,000 square feet down to 1,400 square feet on all of the land within the city’s I-610 loop. This made it possible to replace a single-family house with three. In 2013, the 1,400-square-foot minimum lot size requirement was expanded to cover the entire city. 
Thousands of townhouses have since been built that wouldn’t have been permitted before. Houston now boasts a median home price below the national median in spite of decades of rapid job growth and increasing population. A typical house in Houston costs less than $200,000, compared with nearly $300,000 in Atlanta or a staggering $680,000 in San Diego. In other booming cities, more jobs and new residents have led to skyrocketing prices but few new homes. 
On paper, Houston’s decision to reduce minimum lot sizes seems similar to eliminating single-family zoning and allowing more than one unit per lot. The difference is that Houston’s other flexible land-use regulations allow homebuilders to deliver those new units in a cost-effective and desirable way. Houston’s rules ensure that three new units can be spacious, useful and an improvement on the detached houses they replace."
"The experience of Houston reaffirms much of what researchers already know: minimum-lot-size regulations limit urban development, driving up lot sizes and thereby increasing housing prices. By liberalizing these rules, the 1998 subdivision reforms allowed developers to meet a large and growing demand among Houstonians for smaller houses closer to major job centers
But the reforms also chart new territory: a key element of their success involved allowing homeowners with the most extreme lot-size preferences to opt out of reform, thereby mitigating opposition to the broader reform. Even accounting for this concession, postreform subdivision has been heavily concentrated in neighborhoods that were either middle class or sparsely populated, without imposing an undue burden on traditionally marginalized communities. As planners and policymakers across the country wrestle with the complicated politics of land use liberalization, the case of Houston thus offers an instructive example."
“The suburban demand, driven in part by New York City residents who are able to work remotely while offices are closed, raises unsettling questions about how fast the city will be able to recover from the pandemic. It is an exodus that analysts say is reminiscent of the one that fueled the suburbanization of America in the second half of the 20th century.”
"I’ve been fortunate to live in many different cities across the U.S. and Latin America, and I can honestly say that none of them were as friendly, as empathetic, or as inviting as Houston. It’s why I fell in love with this town. People genuinely believe in looking out for each other here."
Finally, a pretty cool random discovery: Journey's official live video for 'Don't Stop Believin'' was performed in Houston. They even tweaked the lyrics to include Houston!


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Monday, August 24, 2020

Houston #3 global city of the future, explaining the 'evil developer' trope, Energy 2.0, and more

This week's items:
"Houston comes third in the overall ranking. The Texan city is a reputable talent hub and, according to the 2019 Academic Ranking of World Universities, is home to five of the global top 500 universities, as well as over 30 international baccalaureate schools. This contributed to its achieving third place in the Human Capital and Lifestyle category.

Houston also placed sixth in the Business Friendliness category. The city’s welcoming business environment is clearly a hit with investors, as it recorded 53 expansion or co-location projects between May 2015 and April 2020, representing more than a quarter of its total inward FDI and the second highest out of all locations analysed."
"Yet, under any circumstances, I believe that the state of our understanding is at least sufficient to provide some basic principles for guiding efforts to improve the prospects of dying cities. First, officials of cities hoping to be successful must be seen as dedicated to managing their municipal enterprise in more honest, efficient, and business-friendly ways. Too many cities have experiences similar to Baltimore’s, whose last two mayors and a recent police chief have gone to prison for corruption. One reason, as I’ve argued, is that many big city mayors no longer have business backgrounds. As a result, few know how to manage complex municipal organizations, including the challenge of minimizing opportunities for graft. Corruption-free cities where mayors and city councils are experienced in working the intersection of business and citizen interests, which are most often coincident, experience faster growth rates... 
Second, mayors and other urban leaders must focus on developing productive entrepreneurship that will make cities more competitive in the future. My research shows that after two decades of betting on entrepreneurs to generate new economies, few cities appear to have benefited from their investment. Mayors should rethink their expectations of local entrepreneurs and the resources they provide to the town’s efforts to encourage new firms. Emphasis should be focused instead on building partnerships with local engineering schools and firms. My research also shows that persons with engineering educations and experience are responsible for starting the majority of new firms that survive and create demand for new jobs. 
Third, cities also need to create incentives for residents, especially racial and ethnic minorities, to become owners of local business."
Finally, another great episode of Pop Culture Urbanism with really good insights on how tight zoning regulation forced development to be synonymous with evil gentrification and displacement, instead of a good thing of providing more housing for more people. Highly recommended.


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Sunday, August 16, 2020

How Houston Defied Doomsday COVID Predictions, HTX books and art, transportation innovations, and more

This week's items:
“All of that was overblown. We never even got close to capacity,” Delgado stated. “It’s just crazy. Crazy, crazy, out of control, overblown stuff. It’s fear, basically. It’s a fear-factor so the patients, particularly older patients, are afraid to death to do anything. There’s elderly people with chest pain staying at home and just dying, or coming in late — someone brings them in — they’ve already had a big heart attack. A lot of that is going on, and it’s really unsettling.” ... 
“We always had the idea that we would not be overwhelmed quickly like New York,” Delgado said. “A lot of people got infected very quickly in New York because the population density there is just many orders of magnitude greater than Houston, Texas. That is the problem, the problem is all of them getting infected at a short period of time. That’s the problem, and that’s what screwed up everything in New York. That never was going to happen in Houston.”
A lot of interesting items in Reason's July Surface Transportation Innovations:
Finally, another clever fun video from Pop Culture Urbanism's Nolan Gray: The City Planning Behind "Avatar: The Last Air Bender"


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Monday, August 10, 2020

Tax and regulatory burden rankings, lot size reform, increasing walkability, superstar cities vs. Covid and Spiderman, and much more

I apologize for the longer delays between what are usually weekly posts. My day job in alternative education and edutech has absolutely blown up with covid and remote learning, leaving little time for blogging. But I'm using a gap hour between meetings today to get this post cranked out, so here are some catch-up items:
"Returning to Texas, the Austin Business Journal piece cited a survey that found that Austin was the top-ranked city for tech workers to relocate worldwide, just ahead of Seattle and Amsterdam. That ranking is largely based on past decisions that allowed the city’s housing market to keep up with demand. But unfortunately, Austin’s city council has shifted to the left over the past few years and has become increasingly hostile to both new development and road construction, with the city becoming more expensive and congested as a result. Were it not for the fact that most other tech havens are even further to the left politically, Austin would likely lose its No. 1 ranking."
"Next, we examine how this reform impacted Houston’s neighborhoods. Did developers flock to the most affluent neighborhoods? Or did this shift subdivision activity to lower-income neighborhoods with lower land values? Using both GIS data and regression analysis, we find that the new 1,400 square foot lots were overwhelmingly developed in two types of areas: First, in neighborhoods where there was substantial underutilized former commercial and industrial land, and second, in largely underbuilt middle-income residential neighborhoods. 
The scale of this change in much of western Houston is hard to overstate. Many neighborhoods, such as Shady Acres and Rice Military, have been completely transformed. In many cases, this has involved the subdivision of conventional post-war 5,000 square foot lots into three townhomes, effectively tripling population densities. We hypothesize that the wealthiest areas avoided subdivision activity through existing deed restrictions, while middle-income neighborhoods absorbed much of the demand, minimizing redevelopment pressure in low-income neighborhoods. 
We draw two lessons for planning practice from this case study. First, allowing the most extreme opponents to “opt out” of land-use reform may help clear a path for citywide liberalization. While planners and policymakers should be prudent, such compromises may make sense where local politics otherwise blocks reform. In Houston, the compromise was deemed acceptable, and the result has been over 25,000 new housing units close to major job centers. 
Second, citywide land-use liberalization is likely to direct growth into middle-income and underbuilt neighborhoods, barring other institutional constraints. While this comes with separate risks—such as disinvestment from lower-income areas—it may help to ease concerns regarding displacement."
  • NYT: Coronavirus Threatens the Luster of Superstar Cities - Urban centers, with a dynamism that feeds innovation, have long been resilient. But the pandemic could drive a shift away from density.  The article does a good job looking at all the different forces involved and potential outcomes, but seems to ignore the potential of safer car-based cities to still generate plenty of innovation and support amenities - places like Houston, Austin, and Silicon Valley. Excerpts:
“A survey by the market research firm Reach Advisors found that companies facing high real estate and labor costs were the most interested in pursuing remote work into the future. “The biggest shift away from density will likely be in markets such as the Bay Area and New York City,” said the company’s president, James Chung. By shifting to remote work, “they can dramatically widen their labor pool and evade the labor-wage trap that they are in.” … 
"But for a city like New York, he said, Covid-19 offers an opportunity for redemption. “New York was running into a dead end, turning into a paradise for the rich,” he said. “Culturally dead.” Moving back to a cheaper, messier, more diverse equilibrium may carry a silver lining."
Finally, a really clever video by Nolan Gray explaining high NYC housing costs through the lens of Spiderman. Enjoy!


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Sunday, July 19, 2020

Misleading poverty stats, what $250k buys you, density and transit vs. Covid, great HTX murals

A new piece is out examining Houston's increase in high-poverty neighborhoods (Chronicle coverage here - hat tip to Charles).  This kind of analysis has always rubbed me the wrong way, because it rewards cities that tighten housing supply and force gentrification and displacement – pushing people out so their “high-poverty neighborhoods” decline.  It's a game of hot potato with low-income populations. I like that Houston allows plenty of new supply (almost always at the higher end) so older housing can become affordable (like the “newly poor” and “deepening poverty” neighborhoods in their analysis) - with the prime example being middle-class apartments built during the 70s oil boom that are affordable immigrant housing today – that’s great! Houston always allows even the poorest to come here seeking opportunity rather than blocking them out thru restrictive housing policy.

And their point about rich neighborhoods being next to poor ones is also great! That means there is affordable housing near the jobs (esp. service jobs). Every major job center in Houston has affordable neighborhoods within a 15-minute transit ride.  A lot of cities can’t say that.  I would say it’s a better model than Dallas, where poverty is concentrated on the south side while wealth is concentrated on the north side, so the south side has very limited access to opportunity.

What this report labels “turned around” neighborhoods would be labeled as “gentrified” in a lot of other reports, and while I’m glad Houston has had a few turnarounds, I’m also glad we don’t have too many because I think that would be an unhealthy sign of too much gentrification because of lack of housing supply in the neighborhoods people want to move to.

What we need is not geographic analysis, but generational cohorts analysis over time: do poor families that move to Houston do better in the 2nd and 3rd generations? I think they do, but data is hard to come by.

Moving on to a few other smaller items this week:

Finally, a good short excerpt from my radio show with Bill King on the impact of coronavirus fear on transit.


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Sunday, July 05, 2020

Better understanding what makes Houston special

Just a few short items this week mostly around a common theme of what makes Houston special:
"I love the ugliness of Houston, but I know that’s far from all this city is. I can’t wait to get to know the community that has already felt welcoming and warm and to experience the food, music, museums, parks and more. Houston is far, far more than its outward appearance. 
Until then, I’ll appreciate the comforting ugliness and continue my mission of trying all the take-out I can. Houston already has the best food in Texas, hands down."
"In Houston, African Americans enjoy high political representation, homeownership, historically black universities and several black newspapers – all of which empower the community, Conyers said. 
“If people can negotiate and communicate, they don’t need protests,” he said. 
Stein agreed that leadership in Houston has played an important role – and not just in city government. 
“The black leadership in these communities tends to be church-centric, very much built into the churches. That’s not what you see in the North and Northeast,” he said. “And the second is, it’s an older population… and to a large extent, these are people who followed Dr. King’s nonviolence.” 
Stein also credits less racial segregation than in other cities and its low density as factors that help keep Houston relatively peaceful in times of social unrest."
"The article is right, Houston isn't about the city, it's about the people. What most people outside of Houston don't understand is what that means. Houston is an attitude, a drive, a motive. Houston thinks forward, never back. The most generous, open people you will ever meet. Houston is not a destination, it's a journey."
  • WSJ: The Coming Urban Exodus - Failing progressive governance is making daily life too chaotic and stressful in many U.S. cities.  A warning for Houston, where we're already seeing population shifting out of the city and county.
  • Scott Beyer, Market Urbanist: Three Ways the Government Blocks Urban Density - Limits on height, floor-area ratio, and dwelling units per acre have tremendous societal costs. Luckily Houston has very few of these. Excerpt: 
"All these rules and more strip creativity and artistic flair from the city development process. Ultimately they raise rents preventing our cities from densifying, robbing the nation of wealth, productivity, and the opportunity for more people to live in economically vibrant urban settings. They’re perhaps the costliest regulations we have in the U.S., and, at least to me, make for our biggest domestic policy mistake."

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