Harvard prof on Houston over NYCEd Glaeser, the famous (in urban policy circles) Harvard prof, has a great column this week in the NY Sun on Houston over NYC. His analysis covers all the angles. I highly recommend reading the whole thing, but here are my favorite excerpts:
Houston, New York Has a ProblemFrom there, he goes into an excellent analysis of salaries, housing, taxes, transportation, commute times (and "quality"), and construction costs. Bottom line: our salaries are slightly lower, but our cost-of-living - and the higher quality we get for that cost - end up with us way ahead. Really, my excerpts don't do it justice. Please read the whole thing. Continuing:
By EDWARD GLAESER, Special to the Sun | July 16, 2008
The Southern city welcomes the middle class; heavily regulated and expensive Gotham drives it away.
New Yorkers are rightly proud of their city's renaissance over the last two decades, but when it comes to growth, Gotham pales beside Houston. Between 2000 and 2007, the New York region grew by just 2.7%, while greater Houston — the country's sixth-largest metropolitan area — grew by 19.4%, expanding to 5.6 million people from 4.7 million.
...Houston's great advantage, it turns out, is its ability to provide affordable living for middle-income Americans, something that is increasingly hard to achieve in the Big Apple. That Houston is a middle-class city is mirrored in the nature of its economy. Both greater Houston and Manhattan have about 2 million employees.
In Manhattan, almost 600,000 of them work in the idea-intensive sectors of finance, insurance, and professional services; only 2% are in manufacturing, and fewer than that in construction. Finance increasingly drives New York City's economy as a whole. By contrast, Houston is a manufacturing powerhouse that makes machinery, food products, and electronics, with a retail sector twice the size of Manhattan's and lots of middle-class jobs.
Housing prices are the most important part of Houston's recipe for middle-class affordability. In Gotham, the extraordinarily high housing costs aren't a problem for the hyper-rich. With enough money, you can live in a spacious aerie overlooking Central Park, shop at Barney's, eat at Le Bernardin, and send your children to Brearley or Dalton.
The abundance of poorer immigrant New Yorkers, in turn, tells us that for people simply seeking a lifestyle that beats rural Brazil, the city's many entry level service-sector jobs, wide array of social services, and extensive public transportation can offset high apartment prices.
But what if, like most Americans, you are neither a partner at Goldman Sachs nor a penniless immigrant? Consider an average American family with skills that put them in the middle of the U.S. income distribution — nurses, sales representatives, retail managers — and aspirations to a middle-class lifestyle. What kind of life will such people lead in Houston and New York City, respectively?
As always, comments are open, or you can check out the NYC reaction or the HAIF discussion thread. I like this comment in particular:
You thus get much more house in Houston and pay a lot less for it. Small wonder Houston looks so good to middle-class Americans.
Big-city boosters may like to think that rising gas prices will end suburban sprawl, but a far more likely response to expensive oil is a large switch to more fuel-efficient cars.
The Houston family is effectively 53% richer and solidly in the middle class, with plenty of money for going out to dinner at Applebee's or taking vacations to San Antonio. The family on Staten Island or in Queens is straining constantly to make ends meet.
The permitting process in Manhattan is an arduous, unpredictable, multiyear odyssey involving a dizzying array of regulations, environmental, and other hosts of agencies. A further obstacle: rent control. When other municipalities dropped rent control after World War II, New York clung to it, despite the fact that artificially reduced rents discourage people from building new housing.
Houston, by contrast, has always been gung ho about development. Houston's builders have managed — better than in any other American city — to make the case to the public that restrictions on development will make the city less affordable to the less successful.
But Houston's success shows that a relatively deregulated free-market city, with a powerful urban growth machine, can do a much better job of taking care of middle-income Americans than the more "progressive" big governments of the Northeast and the West Coast.
The right response to Houston's growth is not to stymie it through regulation that would make the city less affordable. It's for other areas, New York included, to cut construction costs and start beating the Sunbelt at its own game.
Mr. Glaeser, a professor of economics at Harvard University, is a senior fellow at the Manhattan Institute. This article is adapted from the forthcoming issue of City Journal.
The way I have always seen it is that you move to NYC to feel better about yourself. But you move to Houston because you already feel good about yourself.Thanks to Melissa, Brian, and Chris for the link.
- Another poor reaction, with weak arguments, IMHO. See their comments.
- The Austin Contrarian's insightful take.
- Longer complete version of the article in the City Journal. Hat tip to John.