Tuesday, June 25, 2019

Houston dining capital of TX, Top 5 city of the future, new luxury housing increases affordability, protecting against rising seas

This week's items:
"Friday, the Austin-based publication released its list of "The Best Texas Restaurants in Every City" featuring favorites from the past three years of its popular series, "Where to Eat Now." 
Of the five cities included in the list, Houston has the most at 12. Dallas follows with eight. Seven Austin made the list, while San Antonio has three and Fort Worth has one."
The ranking is based on data in five categories:
  1. Economic potential
  2. Business friendliness
  3. Human capital and lifestyle
  4. Cost-effectiveness
  5. Connectivity
"Business Facilities magazine agrees with that assessment. In July 2018, it ranked Houston the No. 1 metro area for economic growth potential, stressing that the region's economy has expanded beyond Big Oil and that it's brimming with "innovation, technology, and entrepreneurship."
"Houston has a distinctly favorable business climate. The region benefits from a skilled workforce, world-class infrastructure and transportation system, and a pro-business environment that stimulates rather than stifles business growth," the magazine says."
"His model suggests that for every 100 luxury units built in wealthier neighborhoods, as many as 48 households in moderate-income neighborhoods are able to move into housing that better suits their needs, vacating an existing unit in the process. Somewhere between 10 and 20 of these households are coming from among the city’s lowest-income neighborhoods, vacating units and reducing demand where housing is most likely to be affordable for working families. 
This suggests that even pricey new units could free up a lot of existing housing. Accounting for possibilities like units sitting vacant, out-of-town movers filling the units, or units being used as second homes/pied-a-terres/safe deposit boxes in the sky, Mast’s model still indicates that for every 100 new market-rate units built, approximately 65 equivalent units are created by movers vacating existing units. If the migration chain is as robust as this paper finds it to be, as much as half of theses newly vacated units could be in low- and moderate-income neighborhoods. This new supply, combined with less demand, could play a major role in easing pressure on rents in the short run."

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Tuesday, June 18, 2019

MetroNext kudos and tensions, HTX traffic is better than you'd expect, road diets kill businesses, the aging affordable housing pipeline, and more

Before getting to this week's items, some thoughts on last week's MetroNext board workshop I attended (presentation slides here).  First off, kudos to Metro (and Chair Carrin Patman) for sticking to its guns on the value of BRT over LRT.  They can build three miles of BRT for the cost of one mile of LRT, getting more service to more areas more quickly and cost-effectively.  People keep asking for fantasyland LRT service everywhere without understanding the economic tradeoffs, and it's good to see Metro have the backbone to say no.

As Dug's Chronicle story mentioned, there was tension on the Hobby line routing between the board and Houston City Councilmember Gallegos.  He doesn't want it to come down 75th Street even though that's the most efficient routing with the best service, including bringing people to a renovated Mason Park (he's worried about right-of-way loss, which Metro thinks would be absolutely minimal if any).  He's insisting on a longer routing that hits the new botanic gardens but misses shopping and restaurants of Gulfgate, which I guarantee generates 100x the trips the botanic garden does. How often do you eat or shop vs. go to tourist attractions? (probably in about the same proportion as you go to work vs. go to the airport!)  Metro's plan includes an autonomous shuttle that would run from a stop near Reveille and Telephone along Sims Bayou to offer connectivity to the botanic gardens at Glenbrook Park, which I think could be an attraction in itself.  It makes total sense.

Moving on to this week's items:
"There’s room for a new politics that recognizes that the path to actual social justice lies primarily in expanding opportunities for a broad range of jobs and housing options. But this can only be done by confronting the current approach to social justice that results in conditions demonstrably unjust."
"The new TomTom Traffic Index puts Houston at No. 204 globally and No. 18 nationally for traffic congestion, as well as No. 2 in Texas.  
In Houston, drivers spent an average of 23 percent extra travel time stuck in traffic last year, according to TomTom. The worst day in 2018 for traffic congestion in Houston: October 31 (44 percent). The best: Christmas Day (1 percent)."

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Monday, June 10, 2019

Houston Carbon Council, free transit reduces congestion, HTX #2 for STEM jobs, and more

Last week I attended the fantastic Houston Low-Carbon Energy Summit put on by the Center for Houston's Future and KPMG (story).  Speaker after speaker said Houston has the assets and skills to really make difference in reducing carbon, from carbon capture and sequestration to methane reduction to biofuels to hydrogen manufacturing (a key one for anything requiring high energy densities like aviation). That extends to the energy trading world too, where carbon offsets are a natural market for us.  There is a lot of pragmatic room in the middle between "nothing to worry about here" and "pure green renewables are the only answer" (lots of obstacles there that will take decades).  My proposal: we need to form a Houston Carbon Council (maybe through the GHP?) to set pragmatic economic and technical goals and coordinate efforts, while also publicizing carbon-reduction efforts and improving Houston's brand as a can-do city doing its best to mitigate climate change as we transition towards a long-term low-carbon future.  It could provide more realistic alternatives to the fantasyland green new deals of the world, including cost-effective solutions governments could really implement.

UPDATE: Chris Tomlinson column in the Chronicle on the summit.

Moving on to this week's smaller items:
"The Dallas-Fort Worth and Houston metros respectively garnered the #1 and #2 overall rankings for best STEM metros. This was due to each scoring in the top 10 on all three metrics – total STEM employment, total employment growth and relative affordability for first time buyers (FTBs). ...
#2: Houston earned the number 2 spot among the 30 largest STEM employment centers by also having top ten ranking on all three metrics: 
- STEM employment of 207,000 earned a 10th place ranking, just below Seattle. 
- Overall employment growth of 70% since 1990 earned a 6th place ranking, more than double the national average of 33%. 
- A FTB median home price to median income affordability ratio of 2.7 landed a 6th place finish. 
A vibrant new home construction sector helps Houston maintain both a high rate of employment growth and FTB affordability. New construction sales accounted for 25.5% of all home sales in the 4th quarter of 2018, well above the national rate of 11.2%. For the entry-level home segment, the new construction share was 16.1%, also well above the 6.2% rate for the national entry-level home segment. In the move-up home segment, Houston’s share was 42.3%, again well above the 19.6% rate for the national move-up home segment."

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Monday, May 27, 2019

Should "Be Someone" be Houston's official motto?

Most Houstonians are familiar with Houston's most famous piece of graffiti, the "Be Someone" message in giant letters on the Union Pacific bridge over I45 north of downtown.  It's gone through a lot of iterations and defacement over the years, including recently, but the fact that it keeps coming back is a testament to its popularity.  Long ago I did a post here titled "What message is your city telling you?" discussing an essay by Paul Graham (of Y Combinator fame).  His basic theme is that each city has its own subtle message it's sending you about what's important and how you should direct your ambition.

Here are some of his examples:
  • New York: "You should make more money."
  • Boston/Cambridge: "You should be smarter." (or at least better read)
  • Silicon Valley: "You should be more powerful." (i.e. change the world)
"Cambridge as a result feels like a town whose main industry is ideas, while New York's is finance and Silicon Valley's is startups."
  • SF/Berkeley: "You should live better." (more conscientious, more civilized, better 'quality of life')
  • LA: "You should be more beautiful and famous."
  • DC: "You should know more important people."
  • Paris: "You should do things with more style."
  • London: "You should be more aristocratic." (higher class - although he says this signal is weaker than it used to be)
Here's the summary list of messages he came up with:
"So far the complete list of messages I've picked up from cities is: wealth, style, hipness, physical attractiveness, fame, political power, economic power, intelligence, social class, and quality of life."
And here's what I came up with at the time for Houston:
"So what about our little town of hard working engineers and entrepreneurs? The city of Canion, Cooley, DeBakey, and a gaggle of energy and real estate mavericks? Well, I think we can rule out style, hipness, physical attractiveness, fame, political power, intelligence, social class, and quality of life. Wealth, maybe a bit, but I think the primary one is economic power - "You should be a bigger player in business." (even the business of medicine) We don't seem to care too much whether you're an entrepreneur, developer, or top executive - just so long as you're a big shot. And if you're not a big shot, the message is to become one by whatever path necessary - whether on your own or through a large organization. 
Maybe not the ideal message I'd choose (although not bad), but I think it's an accurate reflection of the culture of the city." 
Later my friend Anne suggested maybe "industriousness" is a better ambition message for Houston rather than "economic power", because it's more inclusive of people working hard in all sorts of endeavors, including nonprofits. Both of those certainly fit well with a "Be Someone" motto encouraging people to go out and make a difference in the world.

I think it would great for the city to embrace "Be Someone" as our official motto and start baking it into our identity as a city (cue the T-shirts).  It's a great message we could put just about everywhere.  A similar example of an inspiring motto is "Live a Great Story".  On a practical note, that probably means cleaning up the sign and protecting it from future defacement, maybe with a protective spray-paint-repelling clear coat and/or some sort of physical protective shield added to the bridge.  But the real value is beyond the sign itself, but in the collective sense of identity it can unify Houstonians around.

Would love to hear your thoughts in the comments...

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Wednesday, May 22, 2019

A new big-name urban planning book advocating the Houston model

I've been wanting to discuss this new contrarian urban planning book "Order without Design: How Markets Shape Cities" by Alain Bertaud (former urban planner at the World Bank) for quite a while, since it's a ringing endorsement for Houston's model as well as my own concept of opportunity zones.  We are essentially the poster child for the policies advocated in this book.

Apologies in advance for the long post, but I promise you it is a great nutshell summary of a very long 432-page book you're being saved from reading! (unless you're an actual practicing urban planner, in which case the whole book is required reading)

The Antiplanner has some of the best excerpts in his review of the book, including a mention of Houston:
"Bertaud’s new book, Order without Design, reflects a lifetime of growing skepticism about urban planning dogma. Planners, says Bertaud, based their ideas on rules of thumb that were developed by people who often know nothing about the people they are regulating or planning for. 
For example, Bertaud shows that big cities are more productive because they have bigger labor markets, meaning employers and employees are more likely to find a match that needs their needs and skills. He also shows that the size of a labor market depends on commute times: only people located within an hour of a job center should be considered a part of the labor market. 
Urban planners who try to slow down commute speeds — either by getting people out of their cars and onto transit or by deliberately allowing congestion to grow to reducing driving — end up fracturing major urban areas into multiple smaller labor markets. Planners seek to turn urban areas into “urban villages” in which people both live and work, but such villages, says Bertaud, don’t exist: even though many suburbs have a jobs-housing balance, most people don’t work in the suburbs in which they live. All of these things reduce urban productivity. 
While there are no cities without planners, Bertaud points out that the world-wide range of cities goes from Houston, where there is almost no government intrusion into land markets, to some capital cities such as Brasilia, which were almost completely centrally planned. The comparative experiences within this range has persuaded Bertaud that cities that rely more on markets and less on planning to determine land uses are more affordable, more mobile, and more productive. This is an essential book in the Antiplanner’s library."
From Robert Poole at Reason:
"...one of Bertaud’s central insights: a metro area’s productivity “depends on its ability to maintain mobility as its built-up area grows.” In other words, the urban agglomeration benefits that increase the region’s productivity will continue “only if the transportation network is able to connect workers with firms and providers of goods and services with consumers.” The failure to manage the transportation network to maintain high mobility results in congestion. 
The bottom-line point of this discussion is that “the effective size of the labor market depends on travel time and the spatial distribution of jobs.” Bertaud cites empirical research on urban-area productivity and travel time in Europe, Korea, and the United States. In particular, citing two key research papers, he concludes that “workers’ mobility—their ability to reach a large number of potential jobs in as short a travel time as possible—is a key factor in increasing the productivity of large cities and the welfare of their workers. Large agglomerations of workers do not ensure high productivity in the absence of mobility.” Bertaud concludes that “the main objective of planning should be to increase the speed of transport as a city’s size increases.” 
These insights are expanded upon in much greater detail in the book’s longest chapter, on mobility (Chapter 5). I don’t have the space to summarize that, but a couple of key points are worthy of mention. First is that a poly-centric or widely dispersed pattern of job locations is more conducive to transportation that efficiently links workers to jobs than the 19th-century monocentric pattern, with a transport network focused on a “central business district.” Second, he explains that the trendy idea of “urban villages”—where people can live and work within walking or bicycling distance—is a recipe for stagnation. Yes, people might find “a” job in that village, but it is highly unlikely to be a high-productivity job. This planning policy would reduce, rather than increase, a metro area’s economic productivity."
From Wendell Cox at New Geography:
"Bertaud sees the restrictive land use planning regulations that have proliferated around the world as a major problem. He has particular criticism for urban containment policy, which outlaws or significantly restricts new housing on the urban fringe. He cites the extensive economic evidence associating urban containment with higher house prices.
His prescription for what planners should do is very simple:
'The main objective of the planner should be to maintain mobility and housing affordability as a city’s population increases and it diversifies its activities' 
Bertaud notes that 'The objective of an urban transport strategy should be to minimize the time required to reach the largest possible number of people, jobs, and amenities.'"
And finally, Nolan Gray in the City Journal:
"Though considered obvious among urban economists, the idea of cities as labor markets has enormous implications for the work of city planners. Take urban form: current city planners aspire to nudge residents into self-contained urban villages. But if we recognize productivity, and its resulting wealth, as a function of access to large labor markets, we’ll know that people will always travel well outside their local neighborhoods for work. Once city planners acknowledge this basic reality, they can get on with the work of supporting, rather than resisting, natural urban patterns—Bertaud wants planners to respect the natural choices of city dwellers.
Order without Design is a work with a clear vision for urban policy—a magnum opus from one of the twenty-first century’s great city planners. Similar to Jane Jacobs’s The Death and Life of the Great American City, Bertaud’s book manages to weave together theory and practice in a way that will be eye-opening to the curious urbanite and enriching to the practicing professional. If city planning has a future, its contours can almost certainly be found here."
Let's hope the book is read and adopted widely in the urban planning community and that they start seeing Houston as a model to emulate rather than avoid!

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Sunday, May 12, 2019

HTX tops for millennials, startups, and middle-class home affordability; Houspitality support, highway vs. rail cost-benefit

So a sad week here at Houston Strategies: I have a draft post where I keep ideas for future posts.  It had gotten quite long over the last 14 years, with tons of good thoughts and links whenever I had time to get to them.  Well, that all came to a crashing end last week when I discovered a Blogger quirk: if you open a post, paste in some content, realize it's not formatted right and accidentally hit Undo twice, it *wipes out the entire post* then auto-saves the blank version (and unlike Google Docs, Blogger does not keep a version history of posts).  Then I unwisely compounded the error trying to close the browser tab before the auto-save instead of just hitting the redo button.  Regardless, it's all gone now - 14 years of potential post ideas... 😳😢

Moving on to this week's items... lots of kudos for Houston this week!
"The region also has a reputation for welcoming newcomers, whether they’re from New York or New Zealand...a global city, with 90 consulates, two international airports, the second busiest seaport in the nation, and nearly 1,000 foreign-owned companies with HTX ops"
"Houston ranked among the top three cities in several specific areas, including diversity, ease of meeting new people, fair income taxes, everyday expenses, salary potential and amenities for children."
More details here, including some cool comparative graphs (hat tip to George). Houston is a pretty dominant #1, notably ahead of #2 Atlanta and #3 Dallas in the overall value graph (also notably ahead of #5 Austin!).
"In 2004, Denver-area voters approved a sale tax increase to pay for “FasTracks,” a plan to build 119 miles of rail transit lines in the metropolitan area. In 2008, California voters approved the sale of bonds to pay for the construction of a 520-mile high-speed rail line between Los Angeles/Anaheim and San Francisco/San Jose. FasTracks is within a metropolitan area and high-speed rail is supposed to connect several metropolitan areas, yet there are a lot of similarities between these two projects. 
Both rely on technologies that were rendered obsolete years before they received voter approval. The agencies sponsoring both projects ignored early warning signals that the projects were not cost effective. Both had large cost overruns. Advocates of both lied to voters about the benefits and costs of the projects. Due to poor planning, both projects remain incomplete. Despite the failure of the projects to date, both have adherents who hope to complete them."

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Sunday, April 28, 2019

MetroNext's bold moonshot opportunity

A few interrelated items this week leading to a new opportunity for MetroNext 2040.

First, this CityLab article implying that Houston is reaching a size (7m metro) where it is in significant danger of tipping into much lower or even negative growth like the NYC, LA, and Chicago (see the graphs).

Kinder argues we're already there with recent slower growth compared to Dallas, but I think that may be more a matter of temporary factors like the most recent oil crash + Harvey.  In any case, continuing to grow is going to get harder and harder for Houston.  From CityLab:
"For large, dense places, the key is to deal with the diseconomies brought on by density by alleviating traffic congestion through investments in mass transit or congestion pricing; or by reducing housing prices by eliminating land use restrictions, building more housing, and providing more affordable housing."
We're doing the latter reasonably well but need more of the former.  LA is headed this direction as well:
“Los Angeles imagines transforming itself from a carpocalypse into a transitopia, with free public transit gliding past traffic in dedicated bus lanes.”
This fits with an aspirational goal I've been pitching to Metro, where its organizational mission would be to offer half-hour or less express trip times from every park-and-ride and transit center to every major job center and both airports using a network of MaX Lanes in collaboration with TXDoT and HCTRA (with vehicle size and frequency tailored to demand).  It's a very big goal - Metro's Moonshot, if you will.

What's exciting now is that at the last MetroNext board workshop (which I was able to partially attend), Metro showed a new alternative Hobby airport light rail plan that consolidates two lines into one and saves about $800 million (!) which would be available for new investments.  That money could go a very long way towards reducing fares to attract new riders from their cars - especially to the P&R commuter buses - and reducing congestion (I'd propose either free or $1 rides systemwide). That money could also be used to ramp up the service to meet the increased demand and work towards the Moonshot goal.

It's my sincere hope that Metro seizes this amazing opportunity to think big and outside the box to pursue this bold moonshot with the newly available resources.  It's not exaggerating to say that Houston's future depends on it.

UPDATE 6/19Estonia makes public transit free and gets a 10% reduction in congestion. Since fares account for less than 9% of Metro's revenue (vs. sales tax, etc.), it's definitely an affordable option for Houston to try.

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Sunday, April 21, 2019

HTX population crosses 7 million milestone, smart growth is dumb about commuting, BRT beats LRT, and more

Happy Easter! This week's items:
  • We're at 7 million people in the Houston metro area folks!  Yes, I realize the official number is 6,997,384 on 12/31/18, but it also says we're adding 229 new residents a day, so we crossed 7 million around January 12th of this year. Still 5th-largest metro in the country behind NYC, LA, Chicago, and DFW, but this should also put us ahead of the combined San Jose + San Francisco Bay Area, which is split by the census into two separate metros for some reason, while Dallas and Ft. Worth are combined into one. Makes no sense to me either.
  • This Grace Rodriguez interview has some good insights on Houston's entrepreneurship scene - both challenges and opportunities. My favorite excerpt:
"The challenge in Houston is trying to be shiny and polished. And, to me, shiny and polished is Dallas. No one in Houston wants to be Dallas. Let's accept the fact that we are an R&D city. We are a city that researches and develops and experiments new things. Let's lean hard into that and not say we're going to be perfect, and if we do that, then the need to try to appear perfect can go away. Being transparent on the things we are trying makes us become a role model for other cities. I feel like the feeling that we have to be polished and perfect for the rest of the world to be interested in us is the biggest hindrance to our progress. I already know the rest of the world is interested in us."
Here's the specific report excerpt with the broader context:
“US cities generally search for the sweet spot in the demand-to-capacity ratio and try not to provide service frequencies that are so high that their vehicles run empty. Thus, since LRT vehicles are larger, in order to justify providing LRT capacities that are similar to a BRT, LRT tends to operate at lower frequencies. As mentioned above, due to the perceived capacity constraint of BRT there are currently no cases in the US where LRT should be favored over BRT.”
Now we just need MetroNext to go from 70% embracing this principle to 100%...
"Building more market rate housing sets off a chain reaction supply increase that reaches low income neighborhoods. Households moving into new market rate units move out of other, lower cost housing, making it available to other households; the propagation of this effect produces additional housing supply in lower income neighborhoods."
"To achieve higher economic productivity, they recommend fostering speedier rather than slower commuting; more rather than less commuting; and longer rather than shorter commutes. 
These policies would expand the opportunity circles of employers and employees, enabling a more productive urban economy. But these are exactly the opposite of the policy prescriptions of smart growth, which generally seek to confine people's economic activity to a small portion of a larger metro area.
A less extreme version of smart growth says that we should discourage car travel and shift resources heavily toward transit. People should be encouraged to live in high-density "villages" where they can easily obtain transit service to jobs elsewhere in the metro area. The problem with this vision is the inability of transit to effectively compete with the auto highway system. 
Simply put, cars work better for workers. A 2012 Brookings study analyzing data from 371 transit providers in America's largest 100 metro areas found that over three-fourths of all jobs are in neighborhoods with transit service—but only about a quarter of those jobs can be reached by transit within 90 minutes. That's more than three times the national average commute time."

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