Thursday, March 27, 2008

Population vs. job growth and Houston vs. DFW

A lot of stories recently about population and job growth nationwide. You may remember from a couple weeks ago that Houston was the #1 metro in the country for job growth in 2007. Now we have two new sets of Census numbers. One shows that Harris County was 3rd for population growth in 2006-07 behind Maricopa/Phoenix and Riverside, adding almost 60,000. Looking at 2000-07, we're 2nd:
Maricopa County, Ariz., had the largest numeric increase from 2000 to 2007, adding 808,000 residents. Harris, Texas (535,000); Riverside, Calif. (528,000); Clark, Nev. (461,000); and Los Angeles, Calif. (359,000) followed. Texas was the home to nine of the top 25 numeric gainers, and California to six.
The other Census release focused on metros, where we had the 4th-largest gain last year behind DFW, Atlanta, and Phoenix. Texas had 4 in the top 10, including Austin and San Antonio. The AP article has some great excerpts:

Experts credit much of the growth in the South to relatively strong local economies and housing prices that are among the most affordable in the U.S.

"People are running away from unaffordable housing, from the economic slowdown," said Karl Eschbach, a state demographer in Texas. "I would expect Texas to stay at the top of a slowing game."

According to figures compiled by Eschbach, 16 percent of Americans who moved to other states between July 2006 and July 2007 came to Texas, which led the nation for the second straight year in that category.

Home prices continue to be a big factor. A report earlier this month by Global Insight found that housing prices in the Dallas area were undervalued by as much as 30 percent.

Ann Sekesan, a pharmacy technician, moved her family from Pennsylvania to suburban Fort Worth last June after seeing spacious homes in Texas for under $200,000 on a television show.

"After we saw that on TV, my husband and I looked at each other and said, 'Have you ever been to Texas?" Sekesan said. "It's amazing the size of a home you can get down here. It's just incredible."

Mike asks why those cities were able to draw more population than us even though we had more job growth. One factor may be calendar 2007 job growth vs. July-to-July census numbers. But yeah, I still find that confusing too. Usually the rule of thumb is 1 job for every 2 new people. Kids and retirees could be a big piece of it. Retirees especially: I think a lot are trying to sell their expensive east/west coast house at the peak and move somewhere cheaper, but stay within an easy/cheap flight of their old home for visits (esp. grandkids): Phoenix and Vegas for the west coast, Atlanta and Charlotte for the east. And a lot of people could move and then struggle to find a job - or they displace a native already holding that job.

I found a chart of Atlanta job and population growth over the last decade. They had several years in the last slowdown with very low and even negative job growth - even while still adding tens of thousands of new people each year. Their unemployment rate did move up, but not as much as you'd expect.

Focusing on DFW, I can think of three good reasons why their population growth stays higher than us:

1) DFW and Atlanta have larger "draw zones" than Houston for domestic migration trying to stay within a day's drive of home. Quoting a previous comment of mine:

"One growth factor people tend to overlook is simple geography. Young people tend to move from smaller towns and more rural areas to the nearest major city to make their life and career (trying to stay within a day's drive of their parents). DFW's "draw zone" is huge, stretching for hundreds of miles in all directions before running into potential major-metro competitors like Denver, Chicago, and Atlanta. Houston, because we're on the Gulf Coast, as well as having DFW to the north and Austin-SA to the west, has a more constrained "draw zone"."

2) There is a "sweet spot" city size in the 1 to 3 million range which has most big city advantages with fewer of the drawbacks, like traffic. Most of the fastest growing cities (on a % basis) are around that size, like Vegas, Austin, San Antonio, Charlotte, Raleigh-Durham etc. Ft. Worth offers that size town while still providing access to megapolitan amenities within a short drive, esp. DFW airport with its tremendous number of nonstop flights. In a lot of ways, it's a best of both worlds.

3) High humidity makes summer heat much more unpleasant. People want to cool off when they sweat, and then have that sweat evaporate. DFW, Atlanta, and Phoenix offer that dry heat alternative (not to mention Austin and San Antonio), while having just about as mild a winters as Houston.

In a lot of ways, it's amazing that we even keep up with cities like DFW, Atlanta, and Phoenix given the many "genetic"/geographic/climate disadvantages we start out with (i.e. nothing we can do about them). Energy and the Port certainly help make up a big part of the difference, but I think our aggressive infrastructure investments (esp. freeways) and our relatively unregulated dynamic/vibrant development environment are key success factors as well.

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26 Comments:

At 10:31 PM, March 27, 2008, Anonymous Anonymous said...

For Atlanta, that works out to 54.6% of the population employed in 1996 vs. 48.9% employed now - an almost 6% drop, though the unemployment rate is only 0.8% higher.

-Is this due to an aging population (more retirees) or people no longer looking for work?
-Is this trend seen across the country?

 
At 7:43 AM, March 28, 2008, Anonymous mike said...

"In a lot of ways, it's amazing that we even keep up with cities like DFW, Atlanta, and Phoenix given the many "genetic"/geographic/climate disadvantages we start out with (i.e. nothing we can do about them)."

I really don't see where you're coming from on this. There is no national perception that Houston's weather/geography is any worse than those cities, except maybe Atlanta. Dallas is surrounded by hundreds of miles of featureless prairie - compare that to the beach we have down here. Phoenix has the worse reputation for heat of any American city. A friend of mine from Dallas was visiting north Houston recently, and he remarked "I really wish we had these kinds of trees in Dallas. Houston is so different."

I think your comments on this have been somewhat tendentious - "Houston is so disadvantaged compared to those cities; only through the miracle of our unfettered free market have we been able to keep up." It's starting to wear a little thin.

 
At 10:58 AM, March 28, 2008, Anonymous Anonymous said...

Doesn't all of this somehow incorporate the idea that endless growth at a high rate is a good? AT some point the costs outweigh the benefits. And God knows the social costs are becoming overwhelming. As crime rates soar, more must be expended for police and jails and prisons. Thus of course, taxes go through the roof. If all this population growth were in the "high" end of the population spectrum, the costs to the existing community would be much less. Sadly, we can't yet regulate who comes here. Maybe that needs to be addressed.

 
At 11:34 AM, March 28, 2008, Blogger Michael said...

I was thinking the same thing as Mike. Houston being at an extreme disadvantage to the other sun-belt cities, and saved by our highway system and free-market, seems specious at best.

What's this about a "draw zone" for Dallas? Seems like Houston's would be pretty large as well. Plus we are closer to Mexico and Latin America.

As for climate, apparently people from Vietnam, China, and India and other parts of Asia (not to mention Mexico) view Houston as a tropical oasis - since they are settling here in droves. And Houston's climate is apparently similar yet more moderate than some of the areas these immigrants are coming from. Now, it could be argued, Houston has reached a tipping point - where the previous immigrants are luring the current immigrants. If the choice is Houston vs. Dallas, they will come here because their social network is bigger here.

As for climate comparison with Phoenix... I'd have to go there again to think about that. But 110's in the summer and 80's-90's in November doesn't sound that appealing to me, even if it is a dry heat.

-Mike

 
At 12:09 PM, March 28, 2008, Anonymous Anonymous said...

Just to touch on the weather topic...

In general, it's very hard for people from the West coast to get used to the humidity. I went to school over there and many people are so spoiled by that weather that they can't stand it at places like here. I know we're not just talking about a West coast perspective, but I thought I'd throw that in there. Anyway, wouldn't yall say that most people in this world come from humid climates anyway?

 
At 12:57 PM, March 28, 2008, Blogger Tory Gattis said...

To answer anon: yes, growth is good. Studies have shown it always leads to higher GDP, earnings, innovation, and wealth *per capita*. See this older post for details:
http://houstonstrategies.blogspot.com/2007/08/why-city-growth-and-size-matters.html

 
At 1:12 PM, March 28, 2008, Anonymous common_sense said...

First off...Atlanta "dry heat?" Have you ever been to Atlanta?

Second, I agree that some of the growth may be from retirees. Phoenix and Arizona in general is a retirement mecca, although it is not just West Coasters. Phoenix is a magnet for people from the Midwest; Chicago transplants everywhere running from the snow.

Atlanta and Dallas, although probably having more retirees than Houston, are not really retirement centers. People are moving to those cities because of jobs (just like Houston). Atlanta especially is a big place for young, highly educated professionals from Northeast schools.

I suspect one reason that Houston is not growing as fast as other cities (perhaps) is simply because of general public perception. My personal experience is that there are a lot of people who think Houston is an ugly city and hence not that appealing. Many people don't even consider it.

I actually like the city, but even I know that aesthetically, the city is pretty ugly. The biggest reason for this seems to be BECAUSE of this seeming complete reliance on the "free market" to solve all the problems.

 
At 1:56 PM, March 28, 2008, Anonymous mike said...

anon,

I wasn't aware that people from the "high end" of the spectrum - I assume you mean "rich people" - commit less crimes than people from the "low end." How do you suppose we regulate it so that only "high end" people come to Houston?

 
At 12:48 AM, March 29, 2008, Blogger spuck said...

Anon#1, common_sense, et al.:

http://www.sptimes.com/2003/08/11/news_pf/Columns/Guess_who_s_leading_i.shtml
"Without better marketing, a compelling tax climate and improved senior services, the commission said, more seniors once destined for Florida will choose other places for their retirement.

True, some other states with fewer people are on a growth track with seniors. Nevada and Arizona are the two fastest-growing states in the nation, followed by Georgia, North Carolina and, finally, Florida.

Even so, by almost any recent census measure, Florida remains the nation's domestic migration mecca."

Since then the term "half-backs" has been popularized to describe the movement north from Florida, getting a closer flight to friends and relatives back in the Northeast.

US Census believes that Georgia's 55+ population was 1.44 million in 2000 and 1.84 million in 2006. That's a rate of growth *almost* double the state's overall growth rate of 14.4% 2000-2006.

 
At 3:47 PM, March 30, 2008, Anonymous Anonymous said...

To ask a provocative question, why do we really want retirees?

They use services at a higher per-capita rate than younger people, they don't pay their fair share of taxes (Texas offers numerous tax breaks for over-65s, and much of Senior spending in not subject to sales taxes) and they don't fuel the economy by consuming at the same rate younger people with growing families and incomes do.

 
At 8:00 AM, March 31, 2008, Anonymous Anonymous said...

Retirees aren't much different than illegal immigrants are that are draining our health and education systems. Well, retirees will most likely speak English and aren't in our schools.

And they legally use these resources.

 
At 12:14 PM, March 31, 2008, Blogger Brian Shelley said...

Tory,

I think the census may have updated their 2006 population growth estimate. According to the 2007 data we were the fastest growing metro by population in 2006. Growth of 186K. This jives a little closer to the 90-100K job growth numbers. Perhaps this year's estimated growth of 120K will be updated higher next year.

 
At 1:38 AM, April 13, 2008, Anonymous Anonymous said...

Atlanta, Dallas, Houston.... just be goddamned glad you live where you live and quit spliting hairs about who's growth is more or better.... bet on Houston though with $100 oil JC Penny and Coke won't trump Chevron and Exxon...

 
At 9:19 PM, May 28, 2008, Anonymous lopez said...

but does houston has better jobs?or only to live?

 
At 10:03 PM, May 28, 2008, Blogger Tory Gattis said...

Houston does have higher salaries than average, mainly due to the high paying energy jobs.

 
At 9:09 PM, May 30, 2008, Anonymous lopez said...

what's the best part to live in houston and safest?

 
At 9:53 PM, May 30, 2008, Blogger Tory Gattis said...

Wow. That's a tough question. It really depends on what you're looking for. If you want to live in the urban core, anything inside the loop 610 but west of downtown will work. If you want the nicer suburbs, there are a lot of them: all along west I-10, Sugar Land to the southwest, The Woodlands to the north, Clear Lake to the Southeast, and plenty of others. I like Meyerland just south of Bellaire, because it's affordable but with good access to the core (10-15 mins most places). In general, eastern Houston tends to be more industrial and lower income, with somewhat higher crime, although there are really all ranges of neighborhoods all over the city. Crime tends to be pretty localized in the lower income areas - you'll know if you're in a risky area.

 
At 9:19 AM, May 31, 2008, Anonymous lopez said...

well i was thinking of the memorial part near the memorial (west of the city)city mall or clear lake city near space center which one is better?

 
At 10:57 AM, May 31, 2008, Blogger Tory Gattis said...

Both are nice. Memorial is closer to the energy jobs, Uptown/Galleria, and the urban core (with a nice new freeway finished this year), but can be more expensive. Clear Lake is less expensive and great if you work in aerospace (NASA) or want to be near the water (boat owner?), but the 45 freeway to/from the city is quite congested. I would not recommend it if you're going to work in the city, unless you're working downtown and willing to take the HOV express commuter buses.

 
At 10:07 PM, May 31, 2008, Anonymous lopez said...

in memorial what kind of spots are really nice to go like parks,malls, amusment parks,ect and what nice apartment and not to expensive. now in clear lake city what kind of spots are really nice to go like parks,malls,amusment parks,beaches,ect and what nice apartments not to expensive?

 
At 10:37 PM, May 31, 2008, Blogger Tory Gattis said...

Don't really know much about nice apartments in either, although I'm sure there are plenty. Just gotta surf the web.

Memorial:
Galleria (one of the most upscale and largest malls in the country), Memorial City mall, Katy Mills mega-mall a reasonable drive

Memorial Park and Bear Creek/Addicks Reservoir, Hermann Park with zoo a short drive

Clear Lake:
Baybrook Mall
Kemah walking/shopping/eating district on the water (it's on the inlet that connects Clear Lake to Galveston Bay, so there's a constant parade of boats)
Some waterfront parks on Clear Lake and Galveston Bay
Galveston a short drive: beaches, Strand shopping, Moody Gardens, Schlitterbahn water park

 
At 9:19 AM, June 01, 2008, Anonymous lopez said...

do you know what's the best beach in texas?

 
At 9:57 AM, June 01, 2008, Blogger Tory Gattis said...

I'm not a beach expert, but my understanding is the closer to Mexico, the better: South Padre is the best, followed by Corpus Christi. Galveston beaches are not great, but OK. Moody Gardens has a very nice one they groom (I believe), and has lots of children's play areas (water park type stuff), but they charge admission. A season pass is pretty affordable though:
http://www.moodygardens.com/Seasonal_Fun/Palm_Beach/

 
At 10:41 PM, June 24, 2008, Anonymous lopez said...

hey have you ever went to denver,colorado? if you have whats a good place to live?

 
At 7:01 AM, June 25, 2008, Blogger Tory Gattis said...

No more Houston, eh? I know little about Denver. Friends in Castle Rock and Boulder seem to like it, but those are both long commutes to central Denver. Ft. Collins has been winning best city awards.

 
At 7:14 AM, June 25, 2008, Blogger Tory Gattis said...

Check out the graphic here on Denver's suburbs:
http://www.iht.com/articles/2008/06/24/business/exurbs.php

 

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