Thursday, December 03, 2020

Reason: Toll Agency Politicized in Houston

Reason's newest Surface Transportation Newsletter by Bob Poole talks about Harris County's dangerous raid on HCTRA's toll road money, and this is so important I'm reposting it in full here (highlights mine):

 Toll Agency Politicized in Houston

"Back in September, the governing body in Harris County, Texas—the Commissioners Court—voted 3-2 to take over the respected Harris County Toll Road Authority (HCTRA). They created a government corporation that will divert toll revenues to things like flood control and help to pay for deepening the Houston Ship Channel. This political move undercuts the widely followed principle of most U.S. tolling: users-pay/users-benefit. Harris County will receive a $300 million lump sum from HCTRA, followed by $90 million a year indefinitely.

Another part of the deal calls for refinancing HCTRA’s $2.7 billion worth of toll revenue bonds to take advantage of today’s historically low-interest rates, with estimated savings of $60 million per year. That’s a move HCTRA could have made on its own, in the interest of delivering better value to its toll-paying customers. And its well-managed counterpart in the Dallas/Ft. Worth metro area—the North Texas Tollway Authority—the same month announced its own debt refinancing, but without any revenue diversions.

The Houston change was decidedly political, with the three Democratic commissioners voting in favor while the two Republicans voting against it. One of the Republicans, Steve Radack, was quoted in the Houston Chronicle saying, “This is a money grab. They are going to use it to pay for things that are normally paid for via property taxes.” Also opposing the takeover was David Hagy, executive director of the American Council of Engineering Companies, who supported the sensible refinancing but not the county’s money grab. And the Transportation Advocacy Group urged the Commissioners to at least use the diverted funds for transportation purposes.

I wonder how the rating agencies will view this politicization. HCTRA’s current bond indenture, as well as state law, limits the use of surplus revenues to non-toll roads, streets, and highways, according to a Q&A provided by the Harris County budget office. If that’s true, there might be grounds for bondholder litigation.

Moreover, while short-term thinking would say this is only a small amount of revenue diversion, the real danger is that it sets a precedent and provides no safeguards against future raids on HCTRA’s toll revenues. Transportation professionals know what has happened to the Pennsylvania Turnpike when that state’s legislature imposed Act 44 mandating that the Turnpike divert $450 million per year to the state DOT for transit subsidies. The Turnpike has had to significantly increase its bonded indebtedness, and enact large annual toll rate increases to meet the new debt service. That same fate could await HCTRA’s toll payers the next time Harris County faces budget shortfalls."


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Sunday, November 22, 2020

A better alternative to channelizing Buffalo Bayou, VC leaving CA for TX, top life science and entrepreneurship rankings, big solar, and more

My lead item this week is my proposed alternative to channelizing Buffalo Bayou or an expensive tunnel to better drain the westside reservoirs and avoid a future Harvey flooding tragedy: a 27-mile drainage trench or pipeline(s) using power-line right-of-way, satellite mapped here. I got inspired after reading Jim Blackburn's Chronicle interview about how bad the Army Corps of Engineers study was.  And if a trench is problematic for some reason, maybe giant pipelines like these could work for a small fraction of the cost of a bored tunnel?  Would genuinely love to hear feedback in the comments on the feasibility of this from people more knowledgeable than I...

On to this week's smaller items:

"Houston is on track to be a top market for life sciences. The report factored in size and growth of life-sciences employment, venture capital and National Institutes of Health funding, and more." 
"California’s restrictive zoning laws make it nearly impossible for many essential low- and middle-income workers to live anywhere near major cities. In Texas, permissive zoning allows every member of our staff to live close to work and spend time with friends and family instead of enduring grueling commutes."
Finally, I wanted to end with a really cool set of pics from The Atlantic: Texas - Images of the Lone Star State. Definitely worth checking out.

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Monday, November 16, 2020

Planning Starts for Houston's Managed Lanes Network plus Covid impact on Metro Ridership

This week we have a great two-part guest post from Oscar Slotboom of Houston Freeways fame, starting with some fantastic news on an interconnected managed lane network for Houston!
Planning Starts for Houston's Managed Lanes Network

The Houston Chronicle recently reported on initial planning for a comprehensive, interconnected managed lanes network for Houston (print edition pdf). Regular blog readers are aware that Tory and I have been promoting this concept - including the MaX lanes report we released in 2017 (blog post, reportlowres, highres) - which we believe could eventually support one million jobs in Houston's core job centers.

A key feature of our proposal is the "Core MaX Central Connection Loop", which is intended to connect all the MaX lanes and enable maximum accessibility to activity centers.  Using this loop, anyone coming in on any of Houston's spoke MaX Lanes will be able to access any of the core job centers (blue circles are job centers with their total number of jobs).

We were pleased to see that the preliminary plan shows a connection loop on the same location which the Houston Chronicle calls the "Box" and a preliminary planning document calls the "Core Central Connection Loop".

Recent online documents at H-GAC reveal more details about the initial concept.
  • The Inner Katy and West Loop segments appear to be the first priority. The IH 69 and downtown segments are not yet conceptualized.
  • The Inner Katy segment appears to be targeted to be the system backbone. It is listed as a planned $2.2 billion addition to the 2045 plan. Presumably this cost includes the already-planned Metro BRT. The planning document states "TxDOT wants [this project] to be in the same fiscal year as inner Katy BRT to construct these projects in conjunction with BRT." The BRT is currently listed to start in 2023 or 2025.
  • This H-GAC presentation (starting at page 63) shows preliminary concepts for the West Loop, including potential mobility hubs at Westheimer. The planning document lists the West Loop segment at $553 million in 2026.

This is all very exciting! Let's hope TxDOT and H-GAC can continue to move the planning process forward and identify the needed funding.

Covid impact on Metro Ridership

Covid 19 has reduced public transit ridership 62% nationally. The plot below show's Metro ridership for the last year, with overall boardings down 56% between September 2019 and September 2020.(Metro data)
Park & Ride service has suffered the the most, down 88%. In the depths of the Covid shutdown in April, Park & Ride ridership dropped to 1090 daily trips, a 97% drop, before starting a very modest recovery. Of course, many Park & Ride customers are now working from home, and they have the option to drive to work to reduce their risk of exposure, and reduced traffic makes driving faster than pre-Covid trips. Buses mainly serve transit-dependent populations, and bus ridership shows the smallest percent loss.

Dallas has experienced a ridership drop of 57%, nearly identical to Houston. We probably won't see a rebound in transit ridership until there is widespread vaccination and rush-hour traffic congestion returns to pre-covid levels.
I could not find recent highway traffic data for Houston, but nationally highway traffic rebounded sharply during the summer and is now mostly reported to be between 90 and 100% of pre-covid levels. (1, 2). Dallas highway traffic is down 8% in September 2020 compared to September 2019. (ref)
This table summarizes the data for September 2020 versus September 2019.
Houston bus-51%
Houston light rail-56%
Houston park & ride-88%
Houston Metro overall-56%
Dallas public transit-57%
USA public transit-62%
Dallas highway traffic-8%
DFW Airport passengers-45%

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Sunday, November 08, 2020

TXC HSR looking for federal loan guarantees, HTX City of the Future, energy transition, covid migration, and more

If you're burned out on election news, I've got some totally unrelated items for you this week... ;-)

"To repay $30 billion in loans, 6m annual riders would have to pay $255 a ticket on top of whatever it costs to operate the trains." 

Compare that to typical Dallas-Houston airfares of around $100, and the math does not look good at all...

"I think oil and gas is going to be with us a long time. And Houston has a comparative advantage against every other city in the world.

If you get beyond the rhetoric about the energy transition and projections, what is it really about? It’s about infrastructure. It’s about an investment. It’s about technology. And it’s about scale. And those are all things that the energy industry is good at doing. So I think that Houston and the oil and gas companies here will be very much at the center of that. We’re starting from a point where 84 percent of the world’s energy comes from fossil fuels today. So you’re talking about a huge infrastructure of investment and embedded activity that just doesn’t change overnight. If you’re going to power what is an $87 trillion economy that’s going to be a $100 trillion global economy, you’re going to need a lot of engineering and a lot of technology and a lot of equipment. And that’s what Houston and energy companies bring to the table." ...

"...if you did have big restrictions on our domestic oil industry, it would simply mean that we would import more oil. That’s because there’s still 280 million cars in the United States, almost all of which run on petroleum."

Yet another reason to support an OPEC tariff over a fracking ban!

"Americans generally don’t give much thought to energy policy, except when they stop at the local gas station for a fill-up. But if state and federal leaders who want to ban fracking and “transition” away from oil prevail, that complacency will change quickly.

You may not think about energy policy, but it thinks about you. Energy is the foundation of society. Everything—food, clothing, shelter, your iPhone, you name it—requires energy to produce. When it costs more to supply that energy, the cost of everything else increases. The OPEC oil embargoes in the 1970s, for example, ushered in an era of double-digit inflation."

“...the most dynamic cities have been like Tokyo in the post-war decades, in a state of restless metamorphosis.” He later adds that “messiness is something to be embraced, especially for a fast-growing city: it is a dynamic feature of urban development.”

  1. Remote work will increase migration in the U.S. Between 14 and 23 million Americans are planning to relocate as a result of businesses’ increasing acceptance of remote work. As a result, near-term migration rates could be three to four times what they normally are.
  2. Major cities will see the biggest out-migration. 20.6 percent of those planning to move are in a major city.
  3. People are seeking less-expensive housing. More than half (52.5 percent) of those planning to move are seeking a house significantly more affordable than their current home.
  4. People are moving beyond regular commute distances. 54.7 percent of planned moves are to locations more than two hours away from their current location, which is beyond most people’s tolerance for daily commuting.
  5. The highest-priced housing markets are taking the biggest hits. Rental data from shows that the top 10 percent most-expensive markets are losing tenants at a much greater rate than markets in the bottom 10 percent.

Finally, I wanted to end with this really excellent professional video by the Greater Houston Partnership on our growing innovation and park ecosystems: Houston the City of the Future. Well worth watching.

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Sunday, November 01, 2020

Upward mobility report, high-capacity transit deceptions, NIMBYs saving cities? covid moving, and a sports play you have absolutely never ever seen

 A few small items this week:

  • Our think tank, The Urban Reform Institute - A Center for Opportunity Urbanism, released its newest report on upward mobility, with best city rankings for different minority groups: Hispanic, Asian, and African American. You'd think the deep blue coastal cities would be the best, but in fact it's the opposite (with the exception of well-paying government jobs in DC). 
  • Antiplanner: High-Capacity Transit Deceptions. "Transit advocates routinely make deceptive claims about the advantages of transit over cars or rail transit over buses. Often those claims deal with the capacity of different modes of transportation to move people. This policy brief will scrutinize some of these claims."
  • The American Conservative: Did NIMBYs Save Cities? In many ways, slow-growing suburbs encased in regulatory amber function the way greenbelts or urban growth boundaries are supposed to.  Houston is a counter-example to what he’s saying, since we have a pretty free market in both the suburbs and the city and we’re getting good growth in both. Hat tip to Judah. 
  • Bloomberg: New Data Shows Just How Much Americans Moved Temporarily During Covid. 3 of the top 10 cities gaining new move-ins during the pandemic are Houston suburbs: Katy (#1), Richmond (#2), and Cypress (#7). I suspect they already planned to move but just took advantage of the pandemic downtime and low mortgage rates.

Finally, I have to end with this absolutely unbelievable you've-never-seen-it-before-and-will-never-see-it-again recent video of a Rice kicker hitting all three field-goal crossbars a total of four times! The only thing that could have made it any cooler is if it had landed on the other side of the final crossbar!

Assuming the republic is still intact, I'll see ya again next week (or possibly even if it isn't).

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Monday, October 19, 2020

A new strategy for securing Houston's economic future

Talk has been growing in recent years about Houston's future in a less carbon-intensive energy world.  Will we still be the world's energy capital in the coming decades, and what does that mean? The Greater Houston Partnership and Center for Houston's Future have taken the lead on this challenge with their Energy 2.0 and energy transition work, and I hope they're getting traction with it (despite pandemic distractions).  We certainly have a lot of expertise here that can work on big problems like carbon capture with the right economic incentives.

Another strategy is growing our innovation and startup ecosystem to build the companies of tomorrow - especially in energy, space, and biotech - and I think there has been great progress made in recent years, including Rice's building of the Ion in Midtown.  One area that has not been as successful is trying to attract tech companies building new offices.  To be brutally honest, we can't out-Austin Austin.

The energy transition and innovation ecosystem are both great initiatives to help secure Houston's economic future, but I think there's a third opportunity we're overlooking. It plays perfectly to our strengths:

  • America's most affordable global city (vs. NYC, LA, Chicago, SF, Miami)
  • Being more attractive to global migrants than domestic ones (which seem to be more interested in places like Austin, Denver, and Nashville)
  • Large expat communities from countries all over the world
  • 92 foreign consular offices, the third-largest set in the US after NYC and LA
  • One of the largest ports in the country
  • A friendly and welcoming local culture
  • A huge United hub at IAH with nonstops covering all of the Americas in addition to European, Asian, Middle Eastern, and ANZ connections.

IAH nonstops on United

Put all those strengths together and what's the opportunity? To be the location of choice for foreign companies establishing their branch office for the Americas.  There are thousands of fast-growing companies around the world that will need to establish a presence in the Americas at some point, and Houston is really the ideal place for them to put it for all the reasons listed above.

I think we already compete for these to some extent, but there's an opportunity to do it much more aggressively with a formal, well-funded program that cooperates closely with all our foreign consulates to identify their up-and-coming companies and start wooing them as early as possible. Without outside influence, they probably tend to end up in the cities that are more obvious and well-known to them like NYC, LA, and Miami.  But if we intervene early and show them how much better Houston will ultimately be for both their business and their employees, I think we can win over a substantial number of them.  Their expat employees used to small flats and public transport in crowded cities will be blown away by the equivalent home and car they can buy in Houston, Sugar Land, or The Woodlands!

These foreign branch offices aren't as sexy as green energy, tech, or entrepreneurial startups, but over time they could provide a very strong foundational component to Houston's economy with a whole lot less uncertainty and volatility.  Even better, we won't have that much competition - it's an opportunity ignored by most cities as they chase the hot tech companies and try to cultivate their own startup scenes.  Foreign corporate offices should definitely be the third strategy to secure Houston's economic future in a world increasingly hostile to oil and gas.

Would love to hear additional thoughts and feedback in the comments...

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Sunday, October 11, 2020

HTX top five global city in America, big SWA increase at Hobby, Dilbert vs. city red tape, big growth, and more

 Lots of interesting items this week:

But mainly I expect everything to (eventually) get more affordable under covid (see previous item). It will certainly free up a lot of workers from service industries for construction, which has been a major issue for builders. And people being free from commutes reduces price premium of close-in properties and opens up exurban ones.
#12. Houston-The Woodlands-Sugar Land, TX
3-year population growth (percent): 5.11%
3-year population growth (total): 340,438
Cost of living (compared to national average): +1.8%
Median home price: $221,426
Average 2-bedroom rent: $1,096 per month

Finally, ending on a humorous note, Dilbert takes on development over-regulation and corruption! I'm sure many developers are familiar with the 'false hope phase', at least outside of Houston!

Click to enlarge

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Tuesday, October 06, 2020

Food deserts aren't real, energy transition, tourism surprise, NYC's anemic recovery, and HTX pandemic response failure

 Just a few items this week:

  • Bloomberg Businessweek: Houston Had an All-American Pandemic Response: Ignore Until It’s Too Late - The city knows about disasters. It’s got a world-renowned medical center. It saw what happened in New York. And it still couldn’t stop Covid-19. I know I still shake my head every time I see a full pedal party in Midtown (close proximity + heavy breathing!). Hat tip George. Sad conclusion:

Crisis is brewing from every direction, and we’re as ready as we ever were. It’s as Hidalgo says: “We’re right on the edge of disaster. It’s almost become our way of business.”

“But a number of civic and business leaders say New York’s reliance on mass transit—and concerns that the new coronavirus could spread through subways, buses or regional trains—has kept many people working from home. Cities that have more driving commuters have seen a higher percentage of workers return.” 
“New Yorkers’ slow return to the workplace is the latest blow to the nation’s biggest city, which has also suffered from homeowners fleeing Manhattan for larger spaces, rises in murders and homelessness, and the shutting or partial closings of Broadway theaters, museums and other popular attractions.” 
“But for some New Yorkers who recall the early weeks of the pandemic, when the rates of sickness and death were among the highest in the world, complimentary parking might not be enough to bring them back to midtown and the prospect of mixing with crowds. Many were traumatized, said Chris Jones, senior vice president of the Regional Plan Association, an urban policy organization.” 
And here’s the top rated comment: 
“Let's be real.  There is no social distancing in NYC whatsoever when the buildings and streets are full.   Zero.  None whatsoever.  Source: a person who's worked in NYC every day for 25 years. “
"We study the causes of “nutritional inequality”: why the wealthy tend to eat more healthfully than the poor in the U.S. Using event study designs exploiting supermarket entry and households’ moves to healthier neighborhoods, we reject that neighborhood environments have meaningful effects on healthy eating. Using a structural demand model, we find that exposing low-income households to the same availability and prices experienced by high-income households reduces nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand. These findings contrast with discussions of nutritional inequality that emphasize supply-side factors such as food deserts."

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