Saturday, October 14, 2017

New strategies for post-Harvey Houston and MaX Lanes

A couple of big new items from me this week.  The first is the official release of my COU white paper (along with Wendell Cox) on Houston after Hurricane Harvey, cleverly titled "A Layman’s Guide To Houston After Harvey: Don’t Throw The Opportunity Baby Out With The Stormwater" as a follow-on to an earlier piece from Kotkin and Cox.  Our paper led to this interview with Atlantic City Lab.

Out of that work came some preliminary recommendations/ideas that aren't in the paper, but I'm interested in hearing feedback on in the comments. I'll be the first to admit that these are very high level, and that people far more qualified than I are looking into many of these at a much deeper level.
  1. FEMA should accelerate programs to buyout homes that flood repeatedly. 7,000 homes could be removed for roughly $2 billion.
  2. Jumpstart the Trump infrastructure plan with a FEMA infrastructure investment bank, since FEMA is best positioned to see the costs and benefits of flood mitigation infrastructure projects.
  3. Review detention regulations, especially the 10,000 sq.ft minimum rule.  Also consider increasing the detention standard so runoff is actually reduced by development vs. land left undeveloped.
  4. Instead of an outright ban on floodplain development - which risks government takings lawsuits or very high costs of buyouts – enforce high elevation and detention requirements on such developments.  Houston should be confident that every new outlying development is actually reducing the flow of water into downstream bayous.
  5. Review reservoirs for upgrades and improvements.  Evaluate the potential for additional new reservoirs and detention parks.
  6. Consider cross-connecting reservoirs and bayous using high-voltage power-line rights-of-way so areas at risk for overflowing can have alternate drainage channels. One possibility would be to connect the Addicks and Barker reservoirs to White Oak and Braes Bayous to reduce stress and flooding on Buffalo Bayou (see power-line RoW map here and note the dotted lines on the west side near the reservoirs connecting to both bayous).  If such channels had existed during Harvey, thousands of homes near the reservoirs would not have needed to flood during reservoir releases (as Dallas News exposed in this story about a never-implemented 1996 plan under I10).
  7. Use Harvey as a new modeling benchmark for flooding. Projects can be evaluated on a cost-benefit basis for property value that would have been removed from Harvey flooding.
  8. Reinstate ReBuild Houston, including a new ballot this fall if necessary. Popular support seems assured after Harvey.
  9. Consider relaxing minimum parking regulations in favor of additional stormwater retention.  Allow new developments or re-developments to tradeoff parking for additional stormwater retention.
  10. Consider special purpose/TIRZ districts in specific watersheds for mitigation projects in those watersheds.  These projects would be paid for by the tax-increment value increase of properties removed from the floodplains.
  11. When adding new taxes or fees for drainage funding, consider market-based incentives that give property owners credits to reduce their tax with water retention improvements like green roofs, cisterns, water barrels, permeable pavers, and detention ponds.
  12. Don’t let Harvey’s rainfall make us lose sight of Houston’s high storm-surge risk (especially in the industrial Ship Channel) and the continuing need for the Ike Dike or mid-bay solutions.  Evaluate potential financing of these projects with the savings from resulting flood insurance rate reductions.  Eric Berger also pointed out that we've grown complacent about the risks from very high winds, since nothing higher than a Cat 2 hurricane has hit us since the early 60s.  Construction standards should be revisited.
  13. Harvey exposed the need for elevated roads to help evacuations and first responders get around the city during flood events.  As Houston further develops its network of Managed eXpress (MaX) Lanes (see below), consider elevating them to provide this network.  This is the quote that made me think of it: "It seems like there would be a way to create an elevated road that helps people get out all the time [rather than rely solely on low-lying, water-conveying roads]."  -Wesley Highfield, professor of marine sciences at Texas A&M University at Galveston who specializes in flood resilience in an interview here.
  14. Businessweek just profiled the app that came out of Superstorm Sandy flooding in NYC, and now it’s being adapted for NOLA and Portland – maybe Houston should too? Flood Insurance Is Hard. This Hurricane Site Can Help – Bloomberg
One thing Houston is really good at is engineering, and this is really just a large cost-benefit engineering optimization problem that should be manageable: calculating what $X investment will yield in $Y benefits in terms of property protected from future flooding.  Figuring out the right answers should be complex but relatively straightforward. But I acknowledge the politics will be trickier. Fingers crossed our representatives are up to the challenge, even if it involves a few tax increases.

The second item is a video of my recent MaX Lanes presentation to the HGAC High Capacity Transit Task Force Workshop (complete report here). The first 11 minutes are my presentation followed by 10 minutes of Q-and-A.  The first question is from Carrin Patman, Chairman of METRO.  Later in the same video, Sam Lott from TSU has a great presentation on autonomous vehicles.


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Monday, October 02, 2017

Assessing Houston’s Chances and Suitability for Amazon HQ2

This week we have a guest post from Oscar (Erik) Slotboom analyzing Houston's chances for Amazon HQ2.  Chris Tomlinson also weighed in at the Chronicle. And I'll weigh in with my own thoughts at the end, including a silver lining option I think we have a real chance with!

Assessing Houston’s Chances and Suitability for Amazon HQ2
Amazon’s request for proposals by October 19 for its planned second headquarters dubbed HQ2 has unleashed a frenzy of interest across the countryThe New York Times has designated Denver as the city to beat, and a leading site candidate in the area is a large tract halfway between Denver and Boulder along highway 36, an office park which curiously was originally developed by Houston’s Phillips 66 to target alternative energy research. Denver’s front-runner status seems justified, since it has the Rocky Mountain high (in more sense than one!) and does not have any fatal flaws which could knock out other likely leading candidates, such as high housing costs and inability to build new housing (Boston, NYC, California), poor business climate and/or government finance (NYC and Chicago), inadequate infrastructure for a 50K workforce (Austin), lack of coolness (Dallas-Fort Worth, Atlanta), and lack of tech workforce in numerous cities, including Houston. There are plenty of rankings and lists of contenders on the web, and not a single one I’ve seen mentions Houston as a candidate (1, 2, 3, 4, 5, 6).

North Texas has been especially interested and eager, with daily press reports of sites that local interests are promoting, including a detailed proposal for Victory Park by Hillwood (Perot’s firm) and Hines, as well as numerous other sites including the planned Texas Central rail station , Reunion arena site, the Valley View mall redevelopment site in North Dallas, the State Fair site at Exposition ParkPlano, and many more. Local interests are submitting up to 50 sites, which are being filtered for one unified submission.

The Houston Business Journal reported that Houston will likely submit a bid. But in contrast to North Texas and other cities, there’s been negligible reporting of HQ2 activity in Houston. Which leads to the questions: how extensive is the local effort, does Houston have a chance, and would HQ2 even be a good fit for Houston?

Amazon’s Requirement
Amazon’s RFP spells out their wishful wish list, and there is no magical place which meets all their desires. So Amazon’s decision will be based on which criteria are most important, and perhaps only Jeff Bezos knows what will drive the decision. And Bezos may already have preferred location(s) in mind and is using this exercise to maximize the incentives to be offered by increasing the sense of competition.

Looking at the RFP, here is the number of lines dedicated to each criteria category:

Lines in RFP on the subject
Houston’s position
Site and Buildings
Probably average or below
Likely to be less than other big cities
Below tech hubs
Overall Logistics
Sustainability and Environment (mainly site buildings)
Depends on the building site
Business Climate
Quality of Life
Average or below
Good (congestion is a factor)
Average or below
Public transit, bikes and pedestrians
Below average
Very good

If Amazon’s decision criteria are in proportion to the RFQ space, then issues like public transit, culture, and quality of life may not be as important as numerous press reports have suggested, which would work in Houston’s favor. The facility site, incentives, workforce, and logistics appear to be most important. On the other hand, business climate and housing, Houston’s strengths, are not among top categories in the RFP. Most cities including Houston are going to struggle to meet the real estate requirement, either with downtown sites or ready-to-build suburban sites with around 100 acres. Cities with suitable sites under single ownership will have an advantage.

Houston’s Chances
First things first: will the risk of hurricane disasters and potential major disruption to business operations be a fatal flaw for Houston, especially with Harvey fresh on everyone’s minds? There’s a good chance the answer to that question is yes, especially since Seattle is at risk for a major earthquake, and a near 100% safe location for HQ2 makes sense from the business perspective. But the RFQ makes no mention of operational continuity, so let’s assume we’re still in the running.

Sites: Amazon is open to anything and everything, but ideally wants 500,000+ sf by 2019 with space to expand to 8,000,000 sf, which is equivalent to eight of Hines’ newly built 48 story 1,050,000 sf office tower at 609 Main.While there is plenty of vacant space in Houston, I can’t think of a location which is an ideal match for Amazon, especially given the 2019 deadline for phase 1 space of 500,000 to 1,000,000 sf.

This web post suggests three sites in Houston: 800 Bell (former ExxonMobil office), the 150-acre East River site , and the Astrodome.  While 800 Bell is empty and available, it was completed in 1963 and its exterior design screams early 1960s retro, which is probably a negative. Can it be renovated to meet modern standards, everything including LEED standards , trans-gender restrooms and ceiling heights? While the originally planned renovation would have redone the exterior, I’m inclined to think Amazon will want something newer than a 54-year-old building. On the plus side, there are plenty of vacant lots around 800 Bell, and it is downtown, if that’s what Amazon prefers.

I surveyed the East River site last week and I think it is a nonstarter. Approaching it from interstate 10 on Hirsch, you pass through a disadvantaged neighborhood with pre-WW2 housing and vacant lots – definitely not attractive. The east side of the site is bordered by warehouses, and going east along Clinton you’ll find more warehouses, industrial facilities, and a scrap yard. Buffalo Bayou along the site has a large cliff-like dropoff to the water, as well as bulkheads along the water, and is not much of asset in its current state. The north side of the property along Clinton is modern housing, which is not a vibrant urban scene Amazon may be seeking for a downtown location. In addition, there is no site work in progress yet, and the only office building is the old KBR building. I just can’t see Amazon wanting to bring potential recruits to this site, it won’t impress.

The Astrodome may have potential. Harris County has already slated $105 million towards its conversion to a parking garage and event center , and that money could be redirected to an office conversion. Once the Dome is reduced to a shell, you could build multiple levels of offices in a ring around the perimeter inside, potentially getting up to 1 million square feet of offices overlooking the field area, creating one of the most distinctive offices anywhere with myriad possibilities for the center field area and maybe catwalks up high. Somewhat like a smaller version of the Apple headquarters inside a dome. There’s plenty of parking, land for additional buildings is available probably for free since it is publicly owned, and it has good transportation access with the freeway and light rail. On negative side – potentially a show-stopper – is the need to coexist with the Houston Livestock Show and Rodeo, which may be possible for a smaller presence but not for a 50,000 person campus.

The former downtown post office site could be a potential candidate for downtown, but may not be large enough and the developer’s current plan would need to be totally redone. Of course there is plenty office space in the Energy Corridor, such as the 1.4 million sf campus Conoco has recently abandoned , but environmentally-oriented Amazon will probably not want to be anywhere near an oil and gas industry cluster. There could be suburban sites readily available in a suburban area like the Woodlands, but the challenge is to deliver 500,000+ sf by 2019 with sufficient space for massive expansion.

In summary, Houston does not appear to have ideal candidates for the site, so we don’t have any advantage in this crucial category.

Incentives: Houston will of course offer something, but most likely it will be much less than others will offer (and rightfully so, since there’s no compelling reason to give away the farm for Amazon, like Wisconsin did for Foxconn).  Incentives are unlikely to be an advantage for Houston.

Workforce and Education: We’re going to rank behind tech hubs in the important workforce category, and we’ll probably be in middle of the pack in terms of education. Conclusion: there is no advantage for Houston in these categories.

For education, I can’t help but lament the demise of the proposed University of Texas Data Science Center.  This new campus could have been a big plus in Houston’s bid, as well as being a tremendous asset to the region to prepare our workforce for the future. The University of Texas name would have brought prestige and resources that others can’t match. The cancellation due to narrow-minded political interests was a huge loss to Houston. (Disclosure: I’m a Texas Ex.)

Other Factors: For the remaining factors Houston will have advantages in business climate, logistics and housing, but lag behind others in public transit, culture and quality of life (or at least outside perceptions of those -Tory). Overall, no net advantage.

Which brings up a larger, more philosophical issue: are Amazon and Houston a good fit? If Amazon wants to duplicate its Seattle culture, image, and workforce dynamics, probably not. Being in the world’s leading oil and gas center may not be consistent with their values. The high-growth Seattle tech scene is a totally different workforce dynamic with abundant tech workers and high churn. Amazon is notorious for its high turnover rate. Houston’s lack of rival tech employers would provide a more staid, subdued employment scene.

Wildcards for Houston which could put us in play
Diversity: Page 5 of the RFQ calls for the “presence and support of a diverse population”. Houston would probably rank #1 among all contenders in this category, both domestically and in terms of immigrants. With the increased scrutiny of workforce diversity and inclusion in the tech industry, Houston would be a much better place to recruit black and Hispanic workers than Denver, Boston, and Austin, and certainly at least as good as any other place.

Sites and Building: Page 2 states that Amazon has a preference for “communities that think big and creatively when considering locations and real estate options”. As mentioned above, an office in the Astrodome would be highly unique and something that no other city can duplicate, and likely very attractive to millennials due to the coolness factor. But that’s only if the Astrodome is in play for Houston’s proposal.

Health Care: Does Amazon have any future aspirations of being in the health care industry beyond prescriptions?  If yes, the Texas Medical Center workforce and strong medical education system is among the best in the country.

The scuttled University of Texas data science center: Can this project be resurrected as part of Houston’s proposal? It seems unlikely in the short time before the Amazon deadline, but if it can be resurrected it would be very helpful in closing the education gap.

Jeff Bezos Houston connection: He attended elementary school in Houston at River Oaks Elementary from fourth through sixth grade. Does he have fond memories of Houston, or does he prefer to avoid Houston? 

Downtown Freeway plans: The $4 billion plan to rebuild and expand Houston’s downtown freeways to relieve congestion is expected to move forward in the 2020s. Most or all competing cities except Dallas have nothing in the works even remotely this ambitious for center-city highway infrastructure. Will Amazon view this as a plus?

Airports (Tory addition): fantastic nonstop air access to all of the Americas, if they want to drive an international expansion across Latin America.

The chances of Houston being selected seem very unlikely due to our lack of strength in the key categories. And that’s not necessarily a bad thing, since Amazon is probably not a good fit for Houston.

Just about every city with at least 1 million in population will submit a bid. For most cities (including Houston), this isn’t about winning, but it is about showing what you have to offer, and also that partnerships with Amazon are desired and valued. Amazon will continue to need distribution sites and regional offices, and here’s a chance to show Amazon our strengths, so when they need that next logistics facility, they’ll know we’re a good place to do business. So, assuming that Houston will submit a bid, the Greater Houston Partnership should be sure to highlight our strengths in logistics and transportation.

Amazon’s RFP says the final site selection and announcement will be in 2018. And North Texas should calm down and not get overexcited. Most likely, they’ll also be on the losing end.

Tory Commentary
In general, I pretty much agree with Oscar. I also think there's a more fundamental issue, which is that Amazon doesn't want to compete with the high-paying energy industry for local talent (especially if there's another oil boom!), nor does the energy industry want Amazon poaching their hard-recruited talent, especially technical talent. I just don't think there's much appetite here for Amazon, and the feeling is probably mutual.  

Also, I think Amazon wants to be the "big fish in a small pond" (or maybe 'modest lake' for sufficient scale) wherever they go, with dominant influence (think Mercedes or Airbus in Alabama or BMW or Boeing in South Carolina), and that just wouldn't be the case in Houston with so many major Fortune 500 corporations here.  They certainly would be in Denver though, and I agree with the NYTimes it's the most likely winner if they put a competitive incentive package together.

The silver lining: The most interesting wild card from Oscar's analysis is the UT data science center: if somehow those became synergistic campuses (maybe using the Astrodome or old Astroworld land?), it would certainly be a major differentiator vs. other cities.  Even if we didn't win the HQ2, they may circle back for a major secondary office (data science + Americas intl HQ?)... a consolation prize worth shooting for?

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Sunday, September 17, 2017

Great excerpts from Hurricane Harvey coverage

Apologies for the very long gap time since my last post - vacation, eclipse totality, and Hurricane Harvey (with many national journalist phone interviews, including these at WSJ and NYT) followed by a hurricane-level wave of work has kept me more than fully occupied. But I have accumulated a great set of Harvey-related links and excerpts I've been wanting to share for a while. I know this is very long vs. my usual post - just consider it making up for the lack of posts over the last many weeks, so dig in and please enjoy.
"And yet, this week I suspect we’ll mostly see another side of Houston: its scrappy sense of humor, and its extraordinary and very Texan largesse. Houston responds to disaster with fortitude: the city absorbed two hundred thousand Vietnamese refugees in the nineteen-seventies, and it currently resettles twenty-five of every thousand refugees that the United Nations resettles anywhere—that’s more than any other city in America, and more than most countries. After Hurricane Katrina, Houston took in a quarter of a million evacuees, and, aided by Mayor Bill White’s multimillion-dollar resettlement program, as many as forty thousand people stayed... in Houston, Harvey is already showing how an individualistic work ethic and a spirit of collective generosity can and have to coexist."
"Nationally, Houston has a lousy reputation. It's too hot, too humid, and too, well, too sprawly. It is all of those things. And don't tell the Houston Convention and Visitors Bureau I said this, but it's not a great city to visit. There isn't much to do here that's touristy, especially during our sultry summers. But here's a little secret: Houston is a great place to live. It's the opposite of, "It's a nice place to visit, but I wouldn't want to live there." Rather, Houston may not be a nice place to visit, but you would want to live there. I do."
“If Harvey happened in 1850 instead of today,” added historian Phil Magness on Facebook, “the results would be nearly identical in terms of land flooded…No zoning law or ban on parking lot construction would ever have ‘fixed’ anything about that.”
Magness later added a video from Texas Archive showing Houston’s central Buffalo Bayou after a 1935 flood, at a higher level than it is now, despite the city having far less impervious surface back then."
"Myth #1: Better land-use planning could have significantly alleviated this flooding.
Fact:  50 inches of rain would have devastated any city. Even this article acknowledges that the loss of wetlands from 1992 to 2010 accounted for about 4 billion gallons of lost capacity to absorb storm water. Harvey had already dropped 15 trillion gallons as of two days ago. The total is certain to be far higher."
"And if the region begins to put stricter regulations on building, there is a chance that one of Houston’s great lures — affordable housing — may disappear. This is a concern for Joel Kotkin, the urban theorist and author who has been a great champion of Houston’s lax regulation policies. 
“If you put the kind of super-strict planning shackles on Houston, that would be
the way to kill it,” he said. “Why would you live in a hot, humid, flat space if it was
Like many others, he was quick to praise Houston’s energy and optimism, and said the city would recover. The Texas author Larry McMurtry, a former Houston resident, agreed. 
“Houston will accept anybody who’s got hustle — it respects energy more than
any place,” he said. “Houston is a very resilient city, and it will overcome.”
"And yet, the pundits have largely given up on casting blame for the disaster — with a few exceptions, of course. And the reason is simple: The example set by both Houston's leaders and its people has been too inspiring. 
Houston has always been underrated. It's the energy capital of the United States, the most international metropolitan area in the country and, as we've all now seen, the kind of place where hundreds of people will naturally respond to a major catastrophe by, for example, rescuing random strangers, using their rowboats."
"When a storm of this size hits such a large city — the fourth-largest in America — the financial cost will always be extraordinary. But the courage, neighbourliness and generosity that Texans have demonstrated in recent days are no less so. Nature’s fury may be awesome, but mankind’s resilience is greater still. That ought to be the real lesson from Houston."
"If there’s one lesson I’ve learned as an outsider looking in, it’s that there’s a sense of purpose to these people like I’ve never seen. A central passion runs through Texans unlike any other American identity. Pride percolates here. It’s something people who aren’t from Texas just can’t grasp. We may have a docile sense of civic pride for our hometowns, but nothing like this state demands of its residents.
That sense of purpose and absolute unwillingness to bend in their pride is why Texas will only become stronger in the wake of Hurricane Harvey."
"We are a great nation. We forget. But what happened in Texas reminded us. It said: My beloved America you’re not a mirage, you’re still here."
"Beyond not segregating uses, Houston’s approach to planning is unique in that it doesn’t artificially limit densities or throw up barriers to dense urban redevelopment. This is generally good if you care about housing affordability or racial segregation, since it keeps NIMBYs from blocking new multi-family housing. Unlike San Francisco or Boston, Houston lacks a lot of the discretionary reviews and “neighborhood vetoes,” making it much easier to convert single-family homes in high-demand areas into apartments or townhouses. This also makes dense infill redevelopment much easier, which allows cities to grow up and become more dense. Where the zoning in most cities pushes new development out into the suburbs, Houston keeps it easy to add more housing in desirable urban neighborhoods. Ironically, if we are concerned about destructive greenfield development, Houston’s lack of zoning almost certainly helps more than it hurts."
Actually, I've got even more, but I'm going to cut it off here and save them for next week.  We're also working on a COU briefing on Harvey lessons which I will share as soon as it's published.

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Monday, August 28, 2017

Hurricane Harvey


Saturday, August 05, 2017

Where should Houston's innovation district be?

As Houston has recently reinvigorated efforts to support a tech innovation startup community, the idea of a concentrated "innovation district" has been raised to create a critical mass to concentrate Houston's dispersed initiatives.  The Chronicle article mentions EaDo, Montrose, and the Rice Village, all of which I think are bad ideas.  My own inclination was Midtown at first, but the more I thought about it, the more Downtown makes the most sense, specifically concentrated around the Main Street Square to Preston rail stops.  There are several reasons.

The first and most important reason is that Houston needs to concentrate the startup activities from entrepreneurs all over the metro area.  Because of the tremendous amount of commuter bus service concentrated there (including Metro's central transit center), downtown is the obvious choice.  An Exxon employee out near The Woodlands that quits his job and wants to work on a startup merely has to hop on an express bus downtown to join the community - no transfers required (or a quick transfer to the rail line).  Even if they don't ride the bus, all our freeways point there too - and that works both ways as well: it will be easy for entrepreneurs downtown to go visit customer and partner companies all over the city. Additionally, Rice, UH, and med center students and faculty to easily get there on rail lines.  In fact, I think they need to cut a deal with METRO for an affordable monthly rail pass for any members of Station Houston or other incubators there.

Other reasons downtown makes the most sense:
  • Plenty of unused office space, especially more affordable Class B space (maybe even the old Exxon building?)
  • Recent college grads love living in Midtown, which would have a short rail ride up to the offices.
  • Tons of walkable bars and restaurants for entrepreneurs to mix and mingle in.
  • Several parks within walking distance.
  • Short ride to TX/RX Labs for product design and prototype manufacturing.
The more you think about it, the more sense it makes.  I hope they're taking a serious look at it.

Additionally, this might be a good time to mention my other "big idea" for supporting innovation in Houston: give all the big company employees around the city (especially the energy companies) an option to invest up to a tiny percentage of their 401k funds in local venture capital (a Houston-focused "special situations" fund). Even if capped at 1-5% of their portfolio, that could still put tens or hundreds of millions of dollars into local VC, which would be a huge shot in the arm for Houston's startup scene.

Finally, it's worth stressing how critical this endeavor is to Houston's future. Nobody knows how the energy future is going to play out - especially when it comes to electric cars or renewables - or how it will affect the oil industry, but no matter what, Houston will have to adapt, and having a strong innovation scene will make that much, much easier and more likely to keep Houston thriving instead of going the way of other rust belt cities.

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Monday, July 31, 2017

Houston #1 renovator, culinary bragging rights, cash-out parking, global HTX, and more

This week I'm digging into a few older links I probably should have posted earlier, but somehow didn't get around to:
"...compel employers who provide free parking to offer transit benefits (like a pre-tax bus pass) or a cash payment to workers who find another way to the office. The goal here isn’t to stamp out cars, but to let the non-drivers “cash out” the value of "free" parking. Research suggests this sort of “parking cash-out” works. A series of LA-based case studies by UCLA urban planner Donald Shoup found these programs can decrease the number of drivers who motor alone to work by 17 percent, and increase rates of carpooling, transit riding, biking, and walking." 
"Everything’s big in Texas—including home renovations.
Houston homeowners, with a median budget of $704,000, outspent remodelers in 74 other U.S. metro markets, according to an analysis of building permits for high-end projects.
“People are feeling really good about the city, and the amount of money they can put into their houses,” said Stephen McNiel of Creative Property Restoration, a builder in Houston."
    Definitely a sign of the high standard of living here (average salaries adjusted for the cost of living) that people can afford to spend so much on home renovations.
    "With full recognition that our credibility is suspect, I nonetheless come today to proclaim Houston one of the great eating capitals of America. I mean (and here I mount the mechanical bull) far better than anywhere else in Texas, better than anywhere else in the Southwest, better for that matter than in my current place of residence, Washington, D.C. That the nation’s fourth-largest city is no longer one gigantic steak platter for oil barons should not constitute breaking news. One can go on about the city’s indigenous assets, such as its array of Gulf Coast ingredients and its surprising multiculturalism. 
    But the main reason for Houston’s culinary ascent is economic. This became clear to me one afternoon last fall while eating at Étoile, a vibrant French restaurant that opened in 2012 near the city’s famed Galleria mall, and whose chef and owner, Philippe Verpiand, hails from Provence. After running a restaurant in San Diego with his wife, Monica, for seven years, Mr. Verpiand decided in 2011 to check out Houston. What he discovered, he told me, was that the Bayou City “is very affordable and full of people who like to go out at night and spend money.” It costs probably one-third less to build and design a restaurant here than in California, he said, adding, “I can afford to pay sous-chefs full time and be able to spend the weekends fishing and duck hunting with my boys.” 
    Such cost savings are passed on to Houston’s consumers, who can enjoy a first-rate meal here for maybe two-thirds of what such a dinner would come to in New York or San Francisco."
    Finally, continuing our series of COU videos on Texas cities, this week's focus city is San Antonio, a city I visited last weekend and really enjoyed despite the 100+ degree heat.  The Pearl District is the most impressive industrial re-adaption I've ever seen - Houston needs something similar!

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    Wednesday, July 26, 2017

    COU Houston video, market urbanism, Super Bowl impact on HTX, open transportation markets in TX, and more

    Before getting to this week's items, I want to put in a plug for Scott Beyer's new Market Urbanism Report website (introductory video here). Definitely worth checking out and subscribing if you're a fan of the type of stuff I discuss on this blog. His intro:
    "For about a decade, there’s been a growing bipartisan consensus that America’s cities need liberalization. This consensus formed because of the problems our cities now face thanks to government control. Urban housing supply has been artificially limited by regulations, causing price inflation; publicly-run transportation systems create gridlock and delay; and other services are riddled with patronage."
    Definitely check it out. And here's a good introduction to market urbanism to go with it, with three key arguments:
    1. Housing is expensive, in part, because of bad regulations.
    2. Don’t underrate the importance of bottom-up solutions to urban problems.
    3. More money isn’t the solution to America’s urban transit woes.
    Moving on to this week's items:
    "No city in America runs on anything resembling a free-market model. But Texas' major cities are probably the closest thing, with vast improvements to their economies and living standards to show for it. Their looser land-use laws mean that housing supply grows quickly, stabilizing prices. Their lighter tax and regulatory structure helps businesses locate there and grow. And—shenanigans from the governor's office notwithstanding—their openness to immigrants means they have cheap and robust labor forces.
    Another thing Texas' toll roads have accomplished is greater mobility. The Dallas and Houston metros, in particular, have been the nation’s two fastest-growing metros by net population since 2010. But their congestion levels are not as bad as similar-size metros, according to traffic studies by Inrix and TomTom. This is because they've expanded highway capacity to accommodate population growth, acknowledging that the laws of supply and demand apply to roads like with anything else. Perhaps more crucially, though, they’ve priced the use of these roads, to avoid a tragedy of the commons. And it has worked at creating many excellent, self-funded roads: as I can attest from having lived last summer in Houston, Dallas and Austin, toll roads proliferate throughout each metro, are free-flowing, and charge users electronically, so that they're not having to stop and pay at booths."
    "In many ways, Houston’s Super Bowl was a tremendous success. On the field, it was perhaps the most exciting game in the 51-year history of the event. The weather was perfect, the mild Texas winter providing a comfortable respite for visiting fans and media. For locals and visitors alike, the events at Discovery Green and throughout the Super Bowl Live experience offered engagement with the event regardless of whether they could afford a (minimum) four-figure ticket to the game itself. Taylor Swift had a good time! So did Sting, The Goo Goo Dolls, Travi$ $cott, and the other entertainers who visited and performed for the crowds.
    Still, even with the fuzzy math of an economic impact report, the Houston Super Bowl was a success.
    The impact of Super Bowl 51 on Houston also highlights the significance of events like the Houston Livestock Show and Rodeo, or SXSW and the Austin City Limits Festival in Austin... Cities around the country compete, year after year, with aggressive bids for the chance to host Super Bowls. The Rodeo happens every year and brings in more money, while SXSW annually serves as a recurring pitch to the 85,000 or so people who come to town that Austin is a cool place to live, work, run a business, and spend money. No matter the exact numbers, the Super Bowl seems to have worked out for Houston—but the most impactful events seem to be the ones that are annually in our backyard."
    Finally, our COU video on Houston has just been released! I'm really proud of it - it came out great. Definitely check it out - it'll make you proud to be a Houstonian.

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    Friday, July 21, 2017

    Localism, piling on DART, Honolulu rail disaster, simple fix for housing, big ice, and more

    Apologies again for the posting delay. I recently returned from a great AEI-COU event in DC, including a fantastic speech by Senator Mike Lee on the importance of localism (vs. federal control of everything).  More local control seems like a bipartisan issue both parties could get behind. You may find some of their follow-up links of interest:
    "Thank you for your interest and participation in AEI's recent event "Localism and social capital: Sen. Mike Lee (R-UT) on why federalism is key to restoring civic connectedness and faith in the American government." We wanted to share the event summary and video with you; please feel free to share these with friends or colleagues. For more information on this topic, check out Arthur C. Brooks' publication "It’s better when all politics is local," Andy Smarick's publication "The infinite information problem and state centralization," and Peter J. Wallison's publication "Decentralization, deference, and the administrative state." 
    Moving on to this week's items:
    "Notwithstanding the massive investment in rail over the last two decades made throughout the country, only about 4% of the total daily trips made by Americans are on any form of transit, and less than 2% on rail. Bus ridership has been unchanged for the last two decades. It would be interesting, but ultimately impossible to know how bus ridership might have improved if even a fraction of the billions spent on rail had instead been invested in improving the bus service. 
    With the advent of disruptive transportation technologies like ride sharing, self-driving cars and the electrification of transportation power systems, any further investment in this highly inflexible technology would be folly. We need to be building a transportation system for the next century, not the last one. 
    But there is something akin to a religious belief in rail that I have never been able to understand. The late, great Bob Lanier best summarized it: 
    "First, rail's supporters say 'It's cheaper.' When you show it costs more, they say, 'It's faster.' When you show it's slower, they say, 'It serves more riders.' When you show there are fewer riders, they say, 'It brings economic development. When you show no economic development, they say, 'It helps the image.' When you say you don't want to spend that much money on image, they say, 'It will solve the pollution problem. When you show it won't help pollution, they say, finally, 'It will take time. You'll see.'" 
    Dallas' multi-billion dollar experiment with rail has proved Mayor Bob right. Sorry to all my friends that continue to believe rail is the solution to our mobility problems, but time is up."
    "It’s really not that complicated. Seattle has a housing shortage. Every occupied new unit of higher cost housing translates to one less higher income household competing for a limited amount of existing housing. And whenever there are more people who want housing than there are housing units, it will be the poorest who lose."
    Finally, our Center for Opportunity Urbanism has been creating a series of videos for Texas cities. Houston's isn't ready yet, so this week we'll start with Austin's:

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