Thursday, January 24, 2008

Texas strength, planning debate, losing Kirby's trees, Metro

The smaller misc items have been piling up quickly since last week:
  • Just got the announcement of the new Metro Park-and-Ride in Katy. What makes it notable is that they're using the parking lot for the Cinemark theater out there, which is a great way to add service and save money by not buying land for Metro-only parking lots. There are plenty of well-located parking lots out there that aren't used much on weekdays, like movie theaters and large churches, and it's great that Metro is tapping them for better commuter services. Bravo, Metro.
  • David Crossley announced some bad news on the Kirby widening: many of the nice trees (including some great live oaks) people thought were going to be saved, are not going to be saved, according to the City Forester. All of this just to add a few inches to the existing lanes. Not cool.
  • An article in today's Wall Street Journal evaluating the real estate markets in 28 major metros only rated two of them as "Strong", with "good job-growth prospects and moderate housing inventory in relation to sales": Dallas and Houston. The broader article is about weakness in areas that had been holding up, like the Pacific Northwest, North Carolina, and even Manhattan. Texas is starting to look like the "last man standing" in this country's economy...
  • Christof has an insightful post on the planning debate, with "Six things you might not know about planning." While I agree that deed restrictions can be as constricting as zoning, what's good about them is that they're neighborhood-level controlled, voluntary, and residential-only (typically, although some commercial developments do use them). Commercial properties tend to be free to redevelop as they wish, including dense mixed-use. Deed restrictions allow neighborhoods to protect themselves while allowing everything else to flex as needed with the market - and that's a good thing.
  • You probably saw Randal O'Toole's anti-planning op-ed in the Chronicle on Sunday. Wendell Cox also got one in the Houston Business Journal. Crossley wrote a response based on home ownership rates, to which I commented:
The home ownership rate is not a good statistic in this case. Most cities discourage "undesirable" rental housing/apartments via zoning, permitting, approvals, etc., but Houston is wide open to it - thus we end up with a larger number of renters as a percentage of the population (supply is allowed to meet demand). The key metric for measuring the availability of home ownership to those who desire it is median multiple of house prices vs. incomes, where Houston is comfortably below 4x vs. much higher ratios in other major metros around the country.
While we don't agree on everything, I'll end with my favorite excerpt from Randal's op-ed:

As Harvard economist Edward Glaeser observes, "places with rapid [housing] price increases over one five-year period are more likely to have income and employment declines over the next five-year period" because the rules that drive up housing prices also drive away employers.

Government planning spins out of control when it attempts to be comprehensive, prescriptive and long term. Comprehensive planning attempts to account for all of the impacts of any government action.

Prescriptive planning attempts to control how private landowners use their land. Long-term planning attempts to look decades into the future. No one can really predict the future, so such plans do far more harm than good.

Instead of comprehensive, prescriptive, long-range planning, government agencies should limit themselves to the short-term plans needed to carry out their missions. Houston comes closer to this ideal than any other major American city.

Houston's lack of zoning and heavy regulation have led to an evolving system of private covenants and deed restrictions that respond to changes in tastes and demand for housing. The Harris County Toll Road Authority builds roads in response to transportation needs as expressed by people's willingness to pay tolls.

Houston should not attempt to write a comprehensive land-use plan or try to control or limit land uses in a misguided effort to improve livability by controlling where or how residents live. To preserve Houston's livability, affordability and growth-friendly environment, Houston should focus on maintaining a responsive government that provides the services people need, not one that is merely carrying out the latest planning fads.

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5 Comments:

At 3:47 PM, January 25, 2008, Blogger Brian Shelley said...

The problem with Crossley and some of Wendell Cox's arguments for and against zoning using emprical statistics only takes you so far. Sure, for those who are willing to pour through reams of data and fully vet the appropriateness of each variable we could probably come to a conclusion.

The the little math nerd in me concieves the volume of development as the integral of a function of supply and demand. Any integral when subject to a constraint function will have an equal or lower value. (Assuming all positive numbers). That is, you can't restrict choices and expect more demand.

Interesting dichotomy from Christof. I would be interested in seeing a plan without zoning. This, I might be able to get behind.

 
At 7:54 PM, January 26, 2008, Anonymous common_sense said...

Part of the reason Houston may have such a high number of renters is because the property taxes are so high. Compound that with no income taxes, it often makes sense to rent.

 
At 2:07 AM, January 27, 2008, Anonymous Anonymous said...

renters still have to pay property tax. Landlords will just fold a higher property tax into the rent.

 
At 8:41 PM, January 27, 2008, Blogger Michael said...

The point is still valid - Houston's housing prices are in part lower than the national average because a Texas buyer can expect to pay 2.5% of the home's value (approx) every year in the form of property tax. So, do you really want that 500 K house? Or could you settle for a 200 K house, a 100 K house, or perhaps renting?

I don't disagree that the property tax is still coming out of the renters pocket, but I may be interested to see if there is any bias in the valuation of apartment complexes. I know that single-family homes in the $1 million range are routinely appraised at 30%-40% or more beneath their market value, for instance, whereas for 200 K homes, the appraisal value is generally around 85%-100% of market. If the same bias were true for apartment complex valuations, then it would make that much more sense to rent.

Also, as the article in today's paper showed, Houston prices are not significantly different (and in most cases are higher) than other major Texas cities that have zoning (Dallas, Fort Worth, San Antonio).

 
At 10:59 AM, January 28, 2008, Blogger Brian Shelley said...

Repeating Michael's comment. If anyone does have good data comparing appraisal values and market values, I would love to see it.

 

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