Monday, January 16, 2017

Another outsider loves Houston, top rankings, Super Bowl mobility, reducing rents with supply, insane rail costs, and more

Apologies for the posting delays - quite the backlog of items to get through:
"Another list recently heralded Houston as one of the best places in the U.S. to start a business — the Bayou City ranked No. 6 around the country. Houston ranked as fourth-best city in the U.S. for young entrepreneurs, and Texas was rated No. 2 on CNBC's "Top States for Businesses" list."
  • This article does a great job explaining the absolutely *insane* infrastructure costs in NYC for new subway lines, stations, and a bus terminal.  $2 billion per mile for new subway?! $4 billion for one new downtown station?! $10 *billion* for a new bus terminal?!  The equivalent of *thirty* NRG stadiums! Are you kidding me?!  Just pull out these numbers next time anyone complains about TXDoT spending a couple of billion completely rebuilding a spoke freeway in Houston... it's a relative bargain!
  • Speaking of insane rail costs, just in from the LA Times: California's bullet train is hurtling toward a multibillion-dollar overrun, a confidential federal report warns
"California’s bullet train could cost taxpayers 50% more than estimated — as much as $3.6 billion more. And that’s just for the first 118 miles through the Central Valley, which was supposed to be the easiest part of the route between Los Angeles and San Francisco. 
A confidential Federal Railroad Administration risk analysis, obtained by The Times, projects that building bridges, viaducts, trenches and track from Merced to Shafter, just north of Bakersfield, could cost $9.5 billion to $10 billion, compared with the original budget of $6.4 billion. 
The federal document outlines far-reaching management problems: significant delays in environmental planning, lags in processing invoices for federal grants and continuing failures to acquire needed property.  
The California High-Speed Rail Authority originally anticipated completing the Central Valley track by this year, but the federal risk analysis estimates that that won’t happen until 2024, placing the project seven years behind schedule."
"Denver is spending billions of dollars building more than 100 miles of rail lines. When all the lines are done, promoters project they will reach just 26 percent of the region’s jobs. Since most people won’t live near a rail line, only about 2 or 3 percent of commuters are likely to use it
Even most of the people who live near it won’t ride light rail because it is so slow. According to the American Public Transportation Association’s Transit Fact Book, the average speed of light rail is 15.6 mph while streetcars average just 7.3 mph. Not much accessibility benefit there."
"Houston, perhaps America’s least-regulated metro housing market, is the simulacrum of this 21st-century urbanism in all its messy brilliance. The fast-densifying greater downtown area has good Walk Scores and could legitimately be called "urban"; a half-dozen similar job centers--from random edge cities to tasteful towncenters--dot the metro; makeshift settlement communities pop up to house incoming immigrants; and, of course, haphazard single-family and multi-family housing sprawls in every direction. This willingness to build is why Houston can accommodate large population influxes, remain cheap...and perform so well economically."
I've got more, but that's more than enough for this week's post.  See ya next week.

P.S. Memo to the Texans: get Romo. Whatever the cost (although he should be willing to take a pay cut to get on a team with a real shot at the Super Bowl). With him and a healthy JJ Watt, next year's Super Bowl is very, very possible...

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Thursday, December 29, 2016

2016 Highlights

Time for the annual hike down memory lane for 2016, wrapping up the 12th (!) year of this blog (official anniversary coming up in March). Looking it over, I feel like we've got a particularly strong set of highlight posts this year. These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search).

Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box at the bottom of the right sidebar. An RSS feed link for newsfeed readers is also available in the right sidebar (I'm a fan of Feedly).

As always, thanks for your readership.
And don't forget the highlights from the first few years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging) and most definitely in the 10th birthday retrospective and the best of the first 1,000.

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Sunday, December 18, 2016

Bright lights district for Houston, millennials love HTX, tech cars vs. transit, real Houspitality, topping Chicago, and more

A lot more catch-up items this week, but some really good stuff in here:
"San Francisco, Seattle, and Denver tend to dominate discussions about where millennials are moving to. Further examination, however, reveals that there are other metros that are attractive as well, especially in Texas – Houston, San Antonio, and Austin all ranked very well."
  • Super-Cheap Driverless Cabs to Kick Mass Transit to the Curb - Bloomberg. Hat tip to Oscar.  Even more impressive, their graph shows that driverless carpool might be as low as $0.20/mile in 2025! How transformative is that?! This is part of why I think traditional rail mass transit is a very bad investment as it will get obsoleted by these very cheap point-to-point rides.  Excerpt:
"Having no driver to pay could reduce taxi prices to 67 cents a mile by 2025, less than a quarter of the cost in Manhattan today, the report found. 
It’s a change with the potential to reshape commuting patterns, transforming urban life. As prices fall, the challenge for cities is that the cars may become too popular. Instead of complementing public transit, they may lure commuters away from buses and trains, inundating streets with drone cars."
  • Atlantic CityLab: Self-Driving Cars Are Going to Beat Up on Trains, Too - "Got a gig in the global passenger rail industry? Prepare for an “enormous shakeout.”  Great cost graphs in this one to make the case.
  • Speaking of problematic rail, at the recent TAG luncheon Judge Emmet again expressed support for commuter rail.  Now I'm a big fan of the Judge (especially his Astrodome efforts), but I think he's been misinformed here.  Here's my simple challenge:  LA - with twice our density, perfect walking weather, and worse traffic - spent *$9 billion* on rail and yet transit ridership *fell*! Why do we think we can do any better with half the density, very problematic walking weather much of the year, and traffic nowhere near as bad as LA?  Commuter rail simply does not work in low-density, decentralized, multi-polar, post-WW2 automobile-based cities like Houston (with less than 7% of our jobs downtown - and falling).  It's also been tried and essentially failed as a strategy in Dallas, with low ridership (given the size) and no reinvigoration of jobs in downtown Dallas.  As I keep saying, the better solution is MaX Lanes - Managed eXpress lanes moving the maximum number of people at maximum speed across a network connecting all job centers to all parts of the metro area.
  • Second Ave subway in NYC: “At $2.2 billion per km, this sets a new world record for subway construction costs”  Wow. Just…. Wow.  There's no way the benefits top the costs there.
  • A great personal essay demonstrating Houspitality from a Cuban that made Houston home.
  • We Are Chicago, After The Fall:
"A question on every Chicagoan’s mind, at least in the context of this conversation, is “What about Houston?” Newspapers for years have (in Chicago) decried the city’s endless losses, or (in Houston) praised the city’s innovation and growth. It’s not difficult to see why, as the census numbers show, Houston just keeps going, while Chicago just keeps slowing. 
A Houston Chronicle article from June 2015 quoted University of Southern California demographer Dowell Myers as predicting that “It isn’t ‘possible,’ it’s ‘probable’ that Houston will grow to be the country’s third largest city,” and that “[Houston] has the employment trajectory, and it has the land area.” Chicago’s “exclusionary zoning rules” are also cited as an issue that gives Houston an edge, because Houston’s zoning laws are much looser."
Finally, I think it would be cool for Houston to do a "bright lights district" in our theater district around Jones Plaza, although I'm open to thoughts in the comments on other good areas around the city for it?...

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Sunday, December 11, 2016

GQ loves Houston, top rankings, our affordability model, sidewalks, worsening traffic theory, and more

Been too long since my last post, so a lot of items to catch up on...
The Next Global Food Mecca Is in… Texas? | GQ
“After a handful of visits since then, I've realized the joke is on me: I wish I were opening in Houston, because it just might be the next food capital of America. I've always wondered where the food in a Blade Runner-like future would appear first and what it would taste like—and I genuinely believe it's here. 
Partly that's due to a demographic reality: By some measures, Houston is the U.S.A.'s most ethnically diverse city (a bunch of New Yorkers just choked on their halal kebabs reading that, but it's true), and when you get a collision of immigrants, the food scene is guaranteed to be bonkers. 
Houston also has cheap commercial and residential rents—oh, and no state income tax—which means broke-ass cooks and chefs can afford to live and open here. Zoning laws are more permissive than an Amsterdam brothel. And customers have cash to spend.”
"By contrast, Houston has been enjoying record growth in jobs overall, middle-class jobs, STEM jobs and population — and may overtake Chicago as the third-largest city in America within two decades
Kotkin and Cox note that net migration between California, New York, and Texas has all been to Texas’ benefit: an influx of young, well-educated and socially diverse people. The most diverse county in America is now Fort Bend, on the edge of Houston. Low home prices have helped make that possible: 52 percent of Latino households own their own home in Houston, which is twice the rate in New York (in L.A., it’s 38 percent)
And low regulation has helped make those low housing prices possible. Houston famously has some of the most relaxed zoning and land-use regulations in the country. That doesn’t mean hog-rendering plants sit cheek-by-jowl with hospitals, but it does mean developers face fewer roadblocks when they want to knock down old buildings and put up town homes. 
Such an absence of restrictions has produced “a mash-up of architectural styles,” notes another piece in City Journal. “Everything about Houston screams spontaneous.” That no doubt would curl the hair of Virginia’s historic preservationist class. 
Houston might not be able to boast hundreds of homes preserved in antebellum splendor like dragonflies encased in amber. But it does boast a median-home price of just $145,000. And more than 60 percent of Houston’s housing stock is affordable for a family with a median income — which helps explain why so many young, diverse people are flocking there
Texas has a reputation for being arch-conservative territory. But on the metrics that matter most to economic and social mobility, it’s one of the most progressive places in the country."
"Some, such as Tory Gattis at the Center of Opportunity Urbanism and a frequent observer of local freeway projects, have noticed traffic worsening – albeit anecdotally. Gattis even theorized that one cause could be those energy workers finding new jobs that are scattering them around the area. 
“Whenever people have to switch jobs within the metro area, they’re more likely to end up with a worse commute than a better one,” Gattis said. “Assuming they picked where they live based on the original job they no longer have.” 
There might be some validity to Gattis' guess. According to TranStar average travel times, eastbound Interstate 10 west of downtown and the northbound portion of Loop 610 from Stella Link to Shepherd – two of the most congested freeway segments in the region – saw increases in the amount of time they were congested from 2012 to 2015, with a noticeable jump from 2014 to 2015."
Enough for this week. More items to catch up on next week.

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Monday, November 21, 2016

Houston's changes, challenges, opportunities, and identity

Apologies for the sporadic posting lately - it's been a crazy couple of months. My Center for Opportunity Urbanism recently held an HBJ-sponsored event (alternate link) to release our major report on Texas Urbanism, with a focus on the Texas Triangle cities.  I'll have more to discuss on this in future posts, but in this one I wanted to give my thoughts/notes on the questions the HBJ moderator asked the panel during the event.

How has Houston changed in the past 30 years?
Culturally, from provincial to much more cosmopolitan (including restaurants). Much more educated, attracting many more college grads. Higher demographic diversity. Economically full cycle, from the collapse of the first oil boom to the collapse of the second oil boom. Massive growth - more than doubled in metro population.  Huge growth and densification inside the Loop, especially townhomes, apartments, and residential towers.  Also the rise of the suburban edge cities: Sugar Land, Pearland, Katy, Woodlands, League City.

Obviously the second oil boom was a massive driver. The lack of zoning enabled easy densification. Culturally, our long history of comfort/tolerance with diversity has made it easy for immigrants to move here and assimilate.  The energy industry has become much more global.  Massive housing unaffordability developed on the coasts which made Houston a much more attractive proposition for all classes (including recent college grads). Freeway investments/expansions helped enable the suburban growth, especially the edge cities.

What are Houston’s biggest challenges?
  • Traffic congestion, and in turn keeping major employers in the core instead of moving out to the suburbs like Exxon and Shell (solution = network of MaX Lanes – Managed eXpress lanes moving the maximum number of people at maximum speed).  
  • Education (Klineberg).  
  • Risk of the fossil fuel industry being replaced with renewables – how long will the transition take and how will we adapt?  
  • Building the Ike Dike before the Big Hurricane hits.
What are Houston’s biggest opportunities?
  • Continuing to offer the highest standard of living among major metros in the US (esp. for families and mainly thru housing affordability), which helps attract a diversity of talent and cultures. 
  • Continuing to develop a more urban core.  
  • Growing the port, esp. trade via the expanded Panama Canal and downstream petrochemical investments with some of the cheapest feedstocks in the world.  
  • Becoming the city of choice for foreign companies to put their Americas regional headquarters offices.
Houston’s has struggled with its identity in the past. How would you describe Houston?
  • America’s most affordable global city.
  • Cultural crossroads of opportunity: Started with South meets West meets Mexico in the 1800’s and evolved from there with immigrants from all over and the international energy industry.
  • Houspitality!
Is it possible for Houston’s dynamic be appropriated in other cities, like Atlanta or Denver since they seem similar. Can they learn from us?

They are not as global or diverse as us, but they can certainly learn from our mobility investments (freeways, toll roads, managed lanes) and free market in land use/development.

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Monday, November 07, 2016

Standard of living city rankings, best city in TX?, our development future, and more

I know it's been a long time since my last post and I apologize - travel and an overloaded calendar have been conspiring against me.  I have a whole lot of backlogged content, but here's a good bit of it:
"For second-ranked Houston, the challenge is much different. Houston’s average pay per job is 30 percent above the metropolitan average, which converts to a near duplicate 29 percent higher COU Standard of Living Index, when adjusted for the cost of living. Houston’s future success will require retention its favorable housing affordability and high pay per job. The upheavals in the energy industry could result in lower pay per job in the future." 
"Tory Gattis, founding senior fellow at Houston-based think tank Center for Opportunity Urbanism, envisions the Houston region developing into nine suburban "villages" that would grow to have populations as large as 1 million each. Those "villages" - The Woodlands, Kingwood/Humble, Baytown, Clear Lake/League City, Pearland, Sugar Land, Katy, Cypress and Tomball - would be in addition to the 2 million to 3 million people living in Houston. 
In order for that to work, Gattis said, the outer regions would have to work with the Metropolitan Transit Authority to provide express park-and-ride services to downtown, the Texas Medical Center, Greenway Plaza and other urban job centers.
Gattis predicts more mixed-use buildings and high-rises in the urban core, a small number of which will be met with resistance from lower-density neighborhoods around them. The biggest tensions will arise from mobility challenges should more employers move away from the inner city. 
In an age of the self-driving car, Gattis says people will be more apt to move farther from the city center, no matter how it affects their commutes. 
"They can do email and be productive in the car," he said, "even if it's an hour and a half."
Finally, Scott Beyer has spent a month each living in each of the major Texas Triangle cities.  Which was his favorite?  Sorry, Austin... ;-)

What Is The Best City In Texas?
"Houston is easily my favorite Texas city, because it combines the best aspects of the other three. The metro area is similar in size to Dallas, and has the same rapid growth, ethnic diversity, and global feel. In fact, Dallas and Houston sit alone together as America’s foremost boomtowns, each growing by more than 144,000 last year throughout the metro area (the third place MSA, Atlanta, grew by a mere 95,000). But, like San Antonio and Austin, Houston has remained more tasteful than Dallas, with numerous interior neighborhoods that are urban, walkable, and separated from the innards of the city. 
Not only is Houston Texas’ best city; it is among a handful of emerging ones in the U.S.—including Los Angeles, San Diego, Miami, Denver, Atlanta and Seattle—that will become the dense infill cities of tomorrow, joining the coastal legacy cities. The thing that differentiates Houston from the others, though, is that it doesn’t have the regulatory hurdles to stop this fundamentally market-oriented process. The city has no zoning code, which means a range of densities, uses and architectural styles can go anywhere in the city. 
The folk wisdom is that this turned Houston into a sprawling mess like Dallas. But densification is already happening in Clutch City. This year it will lead the nation in multi-family housing construction, with 25,935 units entering the market (Dallas is #2 at 23,159). Much of this is going up rapidly via mid-rises in interior neighborhoods like Midtown, Montrose and Rice Military. Houston has the highest Walk Score of Texas’ big cities. Dallas, meanwhile, may feel more fragmented because of the low-density zoning in its central areas."

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Sunday, October 16, 2016

New GHP Tower, Houston attracting talent as a knowledge capital, saving the Astrodome, and more

This week I was able to attend the media preview of the Greater Houston Partnership's new tower and offices next to the GRB.  It is an amazingly well-designed space that will be fantastic for hosting outside visitors and promoting economic development.  I took my own pictures, but the Chronicle pictures here are better if you want to check it out, or the Twitter feed pics of the event here.

Moving on to this week's items:
"Among knowledge capitals, Houston had some of the strongest economic indicators, including its GDP per capita and GDP growth between 2000 and 2015. Its trade, air passenger traffic and research profile also scored well. 
Overall, Houston ranked third of the 19 knowledge capitals, behind Chicago and Dallas. Houston actually out-performed Dallas in all but four categories: venture capital per capita, educational attainment, overall metropolitan area population and air passenger traffic. 
But there’s room to improve. Houston actually ranked lowest of all 19 knowledge capital cities when it comes to educational attainment, and in the bottom three for venture capital investment. 
But as Houston continues to grow, these rankings may not hold. Houston is already on track to surpass Chicago’s population. And the University of Texas has eyed an expansion in Houston, adding to its university scene. The Texas Medical Center continues to add jobs and boost the city’s research potential. And a planned — if delayed - new terminal at Bush International Airport promises to bring more air traffic to the region."
Finally, I wanted to pass along this intriguing and thought-provoking quote Barry sent me.  I love it!
"WE WILL NEVER FIX GOVERNMENT UNTIL WE ABANDON THE CENTRAL PLANNING MODEL OF REGULATION. We must return to the Framer’s conception of a “Republic” in which officials act on their best judgment and are accountable for how they do. Of course law is vital—to set goals and governing principles, and hierarchies of accountability, and, sometimes specific rules, as with pollution limits. But when law tries to supplant human judgment, it fails. Life is too complicated to be governed by dense rulebooks. That’s the core flaw of modern government. Law can’t think. People on the spot must take responsibility to do what they think is right, and be accountable for how they do. Talking about “better management” and “less red tape” and “new systems” will do nothing without human authority to make necessary choices. What reformers need to talk about is putting humans in charge again."

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Tuesday, October 04, 2016

Houston's lack of zoning held up as a model nationally plus the City Journal on Texas Rising

I'm back from travel and quite a few items have definitely accumulated, especially around the topic of zoning, which I'll focus on this week.  But first, City Journal just released their special issue titled "Texas Rising," including many pieces by Center for Opportunity Urbanism staff and affiliates, including this great sidebar on Houston by COU Fellow Anne Snyder.  I read it cover to cover on my flight back, and I can't recommend it highly enough.  Many fantastic pieces on how Texas works (or does not, in some cases - there's always things to improve), including key ones by Aaron Renn on the Texas Triangle and Joel Kotkin + Wendell Cox on Texas-style Urbanism.

On to zoning. The big news is that the White House is taking on zoning over-regulation as a barrier to housing supply and affordability, including very specific recommendations for enabling more housing to be built.  Pause here for a moment of thankfulness that Houston doesn't have this problem compared to most cities in America, especially on the coasts.  Scott Beyer covered the story in Forbes with this great excerpt:
"But anecdotal evidence shows that global megacities that embrace rapid construction, such as Houston and Tokyo, can maintain affordability despite populations that are both fast-growing and wealthy. The academic literature shows that this isn’t an accident; regulations that restrict supply really do make areas more expensive, while a hands-off attitude creates more elastic markets and lower prices. It’s nice that America’s highest level of government has caught on."
I think the Chronicle's response was excessively negative, seeming to imply we have the same woes when ours are at nowhere near the same scale as the coasts.  Our median housing price to income ratio is a healthy 3.5, while theirs can easily top 6 to 9.  And somehow they lump inequality into the issue, which is just reflective of the high-paying jobs and industries in Houston. The most equal big cities tend to not have those types of jobs or industries, like, say, Memphis or Tampa.
"Housing advocates, urban planners and city leaders have called recently for a more comprehensive plan to address the affordability, preservation and economic issues surrounding housing in Houston."
Didn't we just do that?  And, btw, there's now a whole new Twitter feed dedicated to showing how Houston is naturally densifying in healthy ways.  Even the Boston Globe is extolling Houston's non-existent zoning code:
"More cities should emulate the example of Houston. It has no zoning code, and voters have repeatedly refused to authorize one. There are regulations aplenty in Texas’s largest city, but there’s no zoning. By and large, it is market incentives that determine what gets built where — not buckets of rules imposed from above by omniscient city planners
The results are impressive. Industry, housing, and business sort themselves out without Big Brother’s help. In the process, they have turned Houston into one of the nation’s fastest growing cities — popular, affordable, eclectic, and diverse. Treat private property rights with respect and deference, and what you get is a booming, blooming city. Maybe Boston ought to try it."
And a similar piece extolling Houston's approach from Washington DC:
"Single family zoning is somewhat of a third rail in American local politics; it's exceptionally rare for residents of suburban-style neighborhoods to allow denser development. Urbanist commentators have noted that "missing middle" housing—forms like duplexes and small multifamily apartments—has been regulated away in most American cities. Houston represents an important dissent from the notion that single family neighborhoods are to be preserved at all costs. 
The results of these reforms have been remarkable. Areas that were once made up entirely of ranch-style houses, McMansions, and underused lots are now covered in townhouses
But the key insight here is that piecemeal densification is possible, and it works. Houston has found a way to add significant amounts of housing without sprawling."
Nolan Gray at Market Urbanism is now writing detailed pieces on Houston's approach to land use so other cities can learn from it, including this absolutely excellent one with the best-detailed summary on our approach I've seen so far.  If you can only send one link to someone to explain Houston's approach to land-use regulation, this is the one to send.  I'll end with this excerpt from it:
"Houston was the only major city to hold a public vote on comprehensive zoning and it was the only major city to turn it down. For decades, folks scoffed at Houston for refusing to implement residential segregation, mixed-use prohibitions, and density restrictions. It turns out that Houston was right all along, and that’s worth talking about."

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