Sunday, December 10, 2006

A cautionary warning from Australia to Houston

Today we have an interesting item from Down Under - a report titled "The Tragedy of Planning - Losing the Great Australian Dream" (thanks to Hugh for the link). It laments the extremely high housing prices in Australia due to tight land use regulations, and makes some very favorable comments about Houston and Texas. Their housing is similar in price to most of California, with the median house between 6 to 9 times the median income (actually, LA and San Diego get as high as 11 times). The rule of thumb is to spend no more than 2.5 times your income on a house, which is about where the median house is in Texas relative to the median income.

Some excerpts of interest.
If Australia were applying the liberal systems to development that prevail in Texas for example, a house/land package price would at least halve. Australia’s ration-induced high prices for new developments on the periphery lift prices throughout the city.
Page 66 has an interesting statistical comparison section and table between Texas and Australia, which are very similar in many ways.
Australia has a much larger land area, and thus a much lower population density. Texas has a larger and faster-growing population, a larger economy and crams even more of its population into its five largest cities than does Australia. Texas has more folk who speak a language other than English at home and more residents who were born outside its borders than does Australia.

Nevertheless, they are broadly similar societies.

Since Texas has (much) less land, a greater population, is faster growing and is more productive (both overall and per person) and has an even larger share of its population in its five major metropolitan areas, it would seem likely that housing would be much more expensive in the metropolises of the Lone Star State than in the cities of our island continent.

Yet precisely the opposite is true.
And the comparative section ends with this conclusion:
Texas is a much less linguistically homogenous jurisdiction than Australia, with a higher rate of population growth and migration-in of people born outside its borders. But it is clearly much more able to provide housing policies which are in the general interests of its inhabitants, rather than the preferences of a narrow group of urban planners reflecting the interests of wealthier members of society. In particular, it does not provide policies where, due to constricted supply, demand pressures from newcomers price people out of home ownership. More liberal land use policies are themselves not an inconsiderable aid to social harmony in a diverse society.
Emphasis on that last point is mine. Something to keep in mind as the Houston Planning Commission works on its "Plan to Plan." How do we avoid the negative side effects of planning observed in other cities?

3 Comments:

At 8:27 PM, December 11, 2006, Anonymous Anonymous said...

Tony,

Those pushing planning on Houston terrify me. I truly hope that our city leaders resist the temptation to futher control our lives through land use regulation. The great thing about Houston is that people are free to choose the lifestyle that they want, not what groups of elite "planners" think that they ought to want. Property rights are stronger in Houston than any other large city in the world, but they have slowly eroded over the years. Think about the silly minimum lot size requirements foisted on property owners in the heights. When will the erosion stop? Will Houston land use decisions be made through politics or will the owners continue to have control? Those of us that believe Houston is better without zoning and its people are freer without government intervention must provide a counterarguemnt to the nonsense propogated by the elite "planners." If not, Houston may become just like everywhere else. That would be a trajedy.

-Nathan

 
At 8:53 PM, December 11, 2006, Anonymous Brian Shelley said...

I am continually amused how the U.S. is the only country where "liberal" does not equate to free market capitalism.

Even with the current housing slowdown don't be surprised to see values in many over regulated markets continue their upward march in the near future. I have yet to hear of any cities making marked changes to their development policies. The embarrassing folly of intense zoning and regulation will grow more glaring as each year passes.

 
At 12:38 PM, December 12, 2006, Anonymous Anonymous said...

"Will Houston land use decisions be made through politics or will the owners continue to have control? Those of us that believe Houston is better without zoning and its people are freer without government"

It's actually the residents in the Heights screaming for protection. They thought they had minimum lot size won until a developer backdoored the priciniple of the ordinance.

 

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