Sunday, March 04, 2007

Density and mixed-use in Houston

I generally assume most of my readers also read the Chronicle, so I don't usually spend a lot of time pointing out things you probably already saw. But today there are three good articles on Houston's urban development landscape: on density increases inside the Loop, increasing numbers of high-density mixed-use projects, and the difficulties putting together those types of projects, with some good discussion of the various factors that must be considered. The table doesn't seem to be online, but the paper had a table showing that inside the loop (97 sq.miles) has grown from 433,000 people in 2000 to 525,000 today, and may reach almost 700,000 by 2035, an increase in size and density of 60% from 2000.

While this increased density is increasing the local traffic, it's still better to have it going short distances on the local street grid than long-distance from the suburbs on the freeways. And I think it is a key part of Houston's core revitalization. Not just the new housing, but all those people are supporting all sorts of great new and enhanced amenities in the core with their discretionary income: restaurants, theaters, stores, etc. I drive in the core all the time, and the traffic is noticeable, but the grid seems to handle it pretty well most of the time.

It's also heartening to see the mixed-use thing finally starting to take off in Houston, even without the "safety" and "guidance" of comprehensive planning. A few key excerpts caught my eye:
The impending wave of mixed-use construction reflects the willingness of developers to take risks based on the city's current prosperity and projections that the Houston area's population will grow by 3.5 million in less than 30 years, said Kent Dussair, president of CDS Market Research, a Houston-based consulting firm.

Cities such as Dallas, Atlanta, Phoenix and Austin are already in various stages of building urban-style projects, while Houston, "with the strongest economy of the bunch," is playing catch-up, he noted.
I think this is at least partially because of our townhome boom, which zoning prevents in most of those other cities. I imagine most of the buyers in those cities would prefer a townhome on their own land if it were available, but since it's not, they settle for a condo in a mixed-use project. In terms of total units being built in their cores, I'd line up Houston against any of them.

Building multi-use projects can prove so costly that some won't take the risk.

Trammell Crow Co. and Morgan Group changed their plans to build an integrated mixed-use project on 24 acres near the corner of Richmond and Weslayan because they didn't think it would work.

"The numbers just got too big, the cost too high and the yield too low," said Michael Morgan, CEO and co-chairman of the Houston-based Morgan Group.

After touring the country studying other mixed-use projects, "we discovered the ones that were economically successful were the ones that had government help," Morgan said. The group has instead opted to build an apartment complex next to what will likely be a big-box retailer.

Ouch! That's a bit scary to read. I have read that many of the developments in Portland have required government subsidies. But it looks like Houston may get quite a few without subsidies. The market will respond with a product people want to buy as long as the planners and regulators allow it.
However, there is a danger of overbuilding in Houston, because it's so easy to enter the market, he said: "You don't know who your competition is going to be, whereas in older cities, it's a long, drawn-out process to get a building permit."
Sounds great to me: Houston citizens get plenty of options at low prices. Ironically, more planned and regulated cities like Atlanta, Miami, and Las Vegas are the ones facing a glut of overbuilt condos right now - not Houston.

City officials say parking, setback and other development rules could change in response to two planning efforts that began last year.

Van Meter consulted on the city's urban transit corridors initiative, which is developing strategies to promote mixed-use projects and other forms of urban development along the path of the Main Street light rail line and five other rail or bus rapid transit lines, mostly inside Loop 610.

Meanwhile, a committee of the City Planning Commission is examining mixed-use and transit-oriented development policies that might be effective in Houston. Both efforts should lead to recommendations to Mayor Bill White and the City Council by this summer, said Marlene Gafrick, the city planning director.

Since Houston doesn't have a zoning ordinance, the recommendations will involve a combination of rules and incentives to produce the desired result, Gafrick said.
Looking forward to what they recommend...

10 Comments:

At 8:16 AM, March 05, 2007, Anonymous Neal Meyer said...

Tory,

You noted that many mixed use projects have been getting government help and that seems to be true everywhere. Even here in H-Town we just read of the Pavillions project downtown which got a $14 million handout and even then they backed out of a residential component which was supposed to be condos.

I am agnostic about mixed use development. If they build it and the people come, then great. If a development fails, then it fails. Other things we have to think about is whether we have adequate sewage, electrical power, and so on.

One of the nice things about those dreary, uninspiring, and deplored big box shopping malls and supermarkets is economies of scale and scope. You can simply get lots more stuff into them at cheaper prices. I'd never thought I would say this but one of my favorite places to shop at these days is Home Depot.

 
At 8:42 AM, March 05, 2007, Anonymous Neal Meyer said...

One other idea about density I forgot to post. It may well be that the slowly increasing density we are seeing around our area is the subtle reaction of thousands of players real estate market (and millions of their customers) to higher oil and natural gas prices. That is in addition to the readily observed ideas such as older suburbanites getting tired of the commute and younger people wanting be where the action is.

It is nice that this is happening without the "need" for philosopher king planners to "guide" things along.

 
At 9:45 AM, March 05, 2007, Anonymous Mike said...

I think the fact that Houston has a stronger economy than those other cities has more to do with the price of oil than the fact that we allow townhomes to be built anywhere.

It's so easy to dismiss the long permit process of other cities when you don't see exactly why the process is taking longer and what kind of neighborhood is being created there vs. here.

I'd love to see just one acknowledgment on this blog of the disastrous character of some of the new townhome incursions into neighborhoods rather than just gleeful cheering of how cheap everything is.

 
At 12:50 PM, March 05, 2007, Blogger Tory Gattis said...

Sorry, Mike. I've toured most of the townhome areas, and I think most of them look great - even in the Heights, where most match the look/style of existing residences. In other areas, I think there's some great architectural variety too.

 
At 2:03 PM, March 05, 2007, Anonymous Anonymous said...

Very interesting information.

I wonder where they came up with the statement that the inside-the-loop population "may reach 700,000 by 2035." It seems clear that it may very well reach that level long before 2035, assuming present trends or anything close to present trends continue.

Even if we assume the same nominal growth in the future that we've seen in the past 7 years (i.e., +92,000 every 7 years), the inside-the-loop population would reach 709,000 in 2021; 893,000 by 2035. That doesn't seem like an unreachable, or even unlikely, projection, given that such populations would result from a declining growth rate... 21.2% from 2000-2007; 17.5% from 2007 to 2014; 14.9% from 2014 to 2021; 13% from 2021 to 2028; and 11.5% from 2028 to 2035.

If we were to project out the percentage growth rate of the recent past, we would reach 772,000 by 2021; 1,134,907 by 2035.

 
At 3:00 PM, March 05, 2007, Anonymous Mike said...

I said "some" of the townhome incursions... a lot of them do look good. But I think most people can agree that things have not gone well in a lot of these neighborhoods. Is there any neighborhood where you think that the juxtaposition of town homes with older housing stock looks less than great, and where you can see the need for restrictions?

 
At 4:11 PM, March 05, 2007, Blogger Tory Gattis said...

I thought maybe the Heights, but almost everything I saw there seemed to fit pretty well. I'm sure there must be stuff somewhere that doesn't, because some people seem agitated. I think they're working on some sort of enhanced deed restrictions.

 
At 4:30 PM, March 05, 2007, Blogger Tory Gattis said...

Anon: I agree, the projections don't seem to extrapolate from current trends, but instead slows down. I wonder if they did an analysis of deed restricted land vs. not inside 610, and then assumed a slowing after all non-deed-restricted land goes townhome, with some assumptions about continued growth in towers/condos/apts/mixed-use.

 
At 8:23 PM, March 05, 2007, Anonymous Brian Shelley said...

Neal, ideally I would be agnostic about mixed use development as well, but pragmatically I see the current buzz surrounding them as a way to help bring more "liquidity" to the city. If people want more of this, we can help foster it by dropping setback rules, parking rules, along transit routes. There are lots of lazy thinkers who want to introduce command/control legislation to create an ideal. The free market thinkers need to be right there proposing legislation that would help the dreamers and the developers get what they want by adding freedom instead of letting "philosopher king planners" run the show.

 
At 9:45 AM, March 09, 2007, Blogger David said...

That's an interesting comment, because it is the very "philosopher king planners" who are arguing to reduce the setbacks, parking, and so on that makes urban development illegal in the City. This discussion is really on its head because of this kind of hatred of others, which appears to blind people to what the others are actually saying.

 

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