Thursday, January 31, 2008

Home affordability in real-life context, top rankings, tunnel costs, a Portlander disagrees, renewable energy in Houston

The small items are piling up faster than ever this year:
"A household moving from San Jose to Austin would save more than $1,000,000 in purchase and mortgage costs for the median priced house. This is the equivalent of 17 years median household income in San Jose or 26 years in Austin. Moving to Atlanta, Dallas-Fort Worth, Houston or Indianapolis from San Jose would save more than $1,500,000, which is the equivalent of from 25 to 30 years of median household income in the less costly markets."

Wow. I don't know about you, but saving 25-30 years of income has an absolutely amazing impact on my quality of life... ;-)

In the footnotes, I also discovered that we're the second-fastest growing metro market over 5 million people in the high-income world, ahead of Atlanta and just behind DFW.
  • Speaking of rankings, came across some new ones:
Houston ranks # 1, Job Growth, by: U.S. Bureau of Labor Statistics

Houston ranks # 1
, Lowest Cost of Living and Least-Expensive Housing Among 24 Metropolitan Areas with Populations of More Than 2 Million, by: ACCRA Cost of Living Index

Houston ranks # 2
, Texas -- Best Business Climate in the Nation, by: Site Selection

Not bad. Not bad at all.

"Houston's exports jumped 28 percent to $53.3 billion in 2006, according to a new analysis of exporting data the U.S. Department of Commerce released Thursday.

The Bayou City maintained its ranking as the nation's second-biggest exporter, trailing the New York City region, which exported $66.2 billion in merchandise. Houston beat out Los Angeles, which exported $48.7 billion in 2006. ...

Free trade agreements with Mexico, Canada and Central America helped the city boost its exports, experts said."

This Portlander disagrees

I was astonished to see a letter in Wednesday's Chronicle from an Oregonian who says he likes what has been done to Portland. (Please see "Concept of city planning / Portlander's opinion.") As a recovering Portlander who worked for the city in the early days of its "transformation," I watched heavy-handed zoning tactics and the urban growth boundary make that beautiful town unaffordable to all but the affluent and childless. Traffic congestion rivals New Delhi or Rome.

While living there, I watched "new urban" planners change Portland from a rock-solid blue- and white-collar city with strong family neighborhoods to a kind of urban Disneyworld for aging boomers who want a place to play while they sip their lattes. No cars in the city center, no industry along the river and lots of expensive condos.

My husband, a native Portlander descended from settlers who traveled the Oregon Trail and put down deep roots, sadly watches our Oregon grandchildren grow up outside his hometown. High housing prices and mediocre schools have driven families out of the city. Unemployment is always higher than the national average, and Portland taxes are astronomical. The money goes to light rail and the creation of neighborhoods with a "sense of place" where nobody wants to live. (nice quip!)

Except for the world-class roses, Portland, Ore., has little that Houston should want to replicate.

Garden Ridge

  • Finally want to end on this random email I received. Good to see renewable energy initiatives congregating in Houston to diversify our energy base. More on extremely promising algae as renewable energy in this Chronicle article from late last year.
National Algae Association
4747 Research Forest Dr., Suite 180
The Woodlands, Texas 77381
inquiries(at) (I converted to no-spam format to avoid the spam spiders)
National Algae Association, The Woodlands, Texas
(February 1, 2008)
Announces the opening of its new headquarters serving all areas of the Algae industry.

Algae researchers and producers can come together to exchange ideas concerning the latest developments in Algae production and the products made from Algae. The Association provides an open exchange forum for the publishing of technical papers and the announcement of the results of research into the latest Algae related technologies. The Association also supports discussion and development of new markets that take advantage of the tremendous potential of Algae, not only as a source of renewable energy, but also in the exploration and development of other markets for algae products, such as cosmetics, pharmaceuticals and fertilizers.
For more information contact: inquiries(at) or 936.321.1125
That's it for this week. Have a great Super Bowl weekend.

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Monday, January 28, 2008

Development regulations

I thought I might comment on some of the weekend Chronicle stories regarding development regulation. I think Mike Snyder's article "Would more housing rules raise Houston costs?" did a fairly good job of being balanced, including input from Wendell Cox, Barry Klein, and Dr. Edward Glaeser - who echoed my point about most cities discouraging rental housing and keeping home ownership rates artificially high relative to Houston. In it he raises the question of why San Antonio - with planning and zoning - has lower median home prices than Houston.

Everything comes down to supply and demand - and when demand outruns supply, prices shoot up. Therefore, cities must act (or, more often, not act) to help supply keep up with demand. Lots of variables go into that equation, and those variables clearly differ across cities. Obviously, San Antonio is a much smaller city and metro than Houston, with a much smaller employment base, including many fewer Fortune 500 companies. It also doesn't have the same economic boom from energy, health care, and the port that we're seeing in Houston. San Antonio has plenty of land, and has obviously kept supply in-line with their more modest demand.

I know the Chronicle article focused on cities, not metros, but the size of the metro is a key issue, because of the overall population pressures on traffic and commutes (driving up demand to be closer in). San Antonio's metro is roughly 1/3 of Houston's. To be more comparable, let's look at similar size metros (around 4-6 million), all of which are more regulated to various degrees (source):
  • Houston - $156K
  • Boston - $415K
  • Philadelphia - $243K
  • Washington DC - $438K
  • Phoenix - $256K
  • Atlanta - $175K
  • Miami/FtL/WPB - $347K
  • Riverside/SB, CA - $377K
Moving on to the op-ed on historic preservation: you can't help but applaud the hard work by the owner to restore the old house. It's a great example of private historic preservation, which Houston is experiencing a great wave of. But there's a lot of old stuff out there. Should the government be the one deciding what's preserved and what's not? Or the market? It seems to me that if something is cool enough to be worth preserving, someone will step in and do exactly that (as they did here). And if nobody's willing to step in and do it, then maybe it's not really worth preserving?

I found her quote at the end a little perplexing:
But my friend's home will still be standing, assuming developers who run this town (and who I understand recently joined forces in a group calling itself "Houstonians for Responsible Growth") don't manage to convince local politicians that they should use their eminent domain powers to, say, build a strip mall in the name of public progress.
Is she kidding? Has this city ever used eminent domain for private development? I know it's an issue in some parts of the country, but that kind of comment/scenario just seems totally out of left field for Houston. The free market should work both ways: people shouldn't be trying to control others' property, but developers shouldn't be expecting government help to acquire land for their developments - and I think, for the most part, they don't expect that in this town. And I wouldn't expect a very friendly reception by city hall if they did.

Overall, the name of the game is balance, which is something I think Mayor White got right in his State of the City address. I'm glad he's asking for creative ideas on helping keep that balance while improving quality of life issues. It'll be interesting to see what sorts of solutions get proposed.

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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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Monday, January 21, 2008

Update on the Houston and Texas economy

Came across this interesting report ("Texas is Feeling Heat from the Housing Slump") from Wachovia profiling the Texas economy (hat tip to Hugh). A graph on page one profiles the major Texas Triangle cities since 2001, with Houston and San Antonio as big winners - mainly because we took almost no hit from the tech crash. Both Austin and Dallas tanked hard after the tech crash, but both have bounced back - Austin particularly strongly.
Houston also saw growth pick up a little earlier than the rest of the state. Strong global economic growth boosted demand for all types of energy products and set off a boom in the energy business. The technology sector also came back relatively solidly and healthcare continues to be a major growth engine. Job growth in the Houston area consistently ranks near the top of any major metropolitan area in the country and recent data from the Bureau of Labor Statistics suggests that gains have been slightly understated.
Page 10 focuses on Houston. Some key excerpts:
Houston is currently one the nation’s strongest job markets, with hiring up across nearly every industry. Growth in business and professional services, especially those related to energy exploration and development, remains exceptionally strong. The region’s vital health care industry is also seeing solid gains, leading to expansions at several area hospitals. ...

Population growth surged in 2006, reflecting an influx of new residents from New Orleans. Growth should return to its preexisting trend in coming years.

Home prices are rising modestly and remain a relative bargain compared to most other major business centers. But not even Houston’s robust economy can escape the effects of the housing slump. Sales and new construction have softened recently, although sales are holding up better than most other areas. ...

Nearly 4.7 million square feet of office space have been absorbed through the first nine months of this year. With little speculative space coming online, office vacancy rates have fallen to just 10.5 percent in downtown Houston and 12.1 percent in the suburbs. Strong demand for space has sent rents dramatically higher, particularly in the downtown area. Growing trade through the Port of Houston is driving gains in wholesale trade and distribution. Demand for industrial space remains exceptionally strong, particularly for well located, large industrial centers. Retail expansions are fueling demand for shopping centers, although the pace of expansions is slowing.
Impressive, but imagine the new downtown towers that would be under construction if Enron hadn't imploded. It alone cleared two buildings, not including all the other energy trading firms that crashed in their wake. They're bouncing back now, but downtown certainly would have evolved differently if they hadn't gone away in the first place...

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Thursday, January 17, 2008

Battery tech, baby boom 2, rail vs. ridership (and stadium), energy trading, and Texas job growth

An assortment of smaller items today:
  • Stanford researchers claim they can get a 10x improvement in lithium ion batteries. If the improvement can be manufactured affordably and reliably, it would certainly be a great improvement for laptops and cell phones, but the larger potential is plug-in hybrid cars that get through a typical commute-day using no gasoline at all. Toyota and GM are already announcing plug-in hybrids using existing battery technology for 2010 or so. This can only help their cost, weight, and performance. Good news for the environment, but another sign that Houston's oil & gas industry needs to be diversifying into a broader array of energy sources over the long-term...
  • Story out this week that the U.S. is having a mini-baby boom, with fertility rates far higher than most of the developed world (Europe, Japan). We're back up to 2.1 children per woman, which is the break-even replacement rate. They speculate on several reasons, but as I've noted before, when people become more affluent, they want more private space. If they can't afford more space (as is common in Europe and Japan), they compensate by having fewer children to keep household size down. The U.S. has just been through a seven-year housing boom with low rates and easy credit allowing people to move from rental apartments to home ownership, or upgrade to a larger home. The average house size in America keeps growing. It's only natural for a baby boomlet to follow.
  • Tom comments on an inauspicious op-ed in the LA Times pointing out that LA transit ridership dropped precipitously as they shifted money from affordable, extensive bus service to a rail network, and has only started to bounce back since the courts forced them to put money back into bus service:
"Taking all this into consideration and adjusting for inflation, the MTA has spent more than $11 billion since 1986 to build its rail network, and the effect has been to reduce total transit ridership on the system by more than 3 billion boardings. That's a bizarre result."

Metro's overall ridership has also dropped after the opening of the Main St. line, and this doesn't bode well for the larger network now being built. It's not just that the new lines will lead to more transfers and longer trip times (as they will), but they also use money that could have been used for more frequent bus service subsidized at lower prices to attract more riders. I do think the new network will help attract more people to the HOV express commuter buses (since they can easily get around town during the day without a car), but unfortunately I doubt that will be enough to compensate for the other ridership losses.
  • Speaking of rail, Christof notes that the proposed new eastside soccer stadium for the Dynamo also would block the eastside rail line, as well as almost all continuous east-west streets to downtown. It might still be able to get down Texas, but then we're talking about one of the only through east-west streets losing lanes for rail, creating a constricting bottleneck. Doesn't seem like a good move. Couldn't the stadium be shifted a couple blocks north or south to keep some through streets?
  • In case you missed them, a couple good articles from the Chronicle. The first is on the resurgence of the financial and physical energy trading industry in Houston since the Enron collapse. Most top-tier world cities have a major financial industry business base of some kind (including commodities trading in Chicago). That's the industry where the big money is: revenues, profits, salaries, and bonuses (just ask NYC and London). It's good that Houston is developing that leg of our economy to go along with oil and gas, the medical center, aerospace, and the port.
  • Here's the second item of note:

Forbes touts Texas as haven for jobs

Texas is a hot spot for jobs in 2008, according to

The publication released its third annual list of the 100 best cities for jobs. Austin was No. 3; Fort Worth, No. 5; Houston, No. 7; San Antonio, No. 11; McAllen, No. 33; and El Paso, No. 49. (where's Dallas? Ah, just found it at #18)

"It seems like the Lone Star State is the place to go if you're looking to start a career or continue the one you've got," said Matthew Kirdahy, a reporter with, who wrote the article.

Forbes compiled the list from Moody's data, including unemployment rate, job growth, income growth, median household income and cost of living, Kirdahy said. Salt Lake City was No. 1 and Wichita, Kan., was No. 2.

That's it for this week. Have a great weekend. It's supposed to be a bit chilly, but I guarantee it'll be a lot warmer than Green Bay or Foxborough...

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Monday, January 14, 2008

The fight over development regulations intensifies

Spawned by the Ashby Tower controversy, the news and opinion as been coming fast and furious in the new year on the fight over planning regulations. Enough creeping regulations have been working their way onto the City Council agenda to finally raise the ire of former Mayor Lanier and the development community, who have formed a political action committee called "Houstonians for Responsible Growth." (Chronicle story) They've partnered with noted anti-planning/pro-free-market activists Randal O'Toole of the libertarian Cato Institute and Wendell Cox. In fact, their "Preserving the American Dream" conference is coming to Houston in May, where they want to hold us up as a model vs. more heavily regulated, planned, and transit-oriented cities like Portland and San Jose.

Chronicle columnist Rick Casey has weighed in, as has David Crossley and blogHouston. Neal Meyer has a in-depth report on a meeting about the traffic ordinance, which sounds like a vague mess with the potential for lots of hassles and abuse. O'Toole himself has posted, but even better are the comments summarizing many of the issues. Then there's this pro-planning/regulation op-ed from the Sunday Chronicle. (Enough links for you yet?)

There's a lot of good material in the comments for many of these articles and posts too. Here's one from the Sunday op-ed that jumped out at me:
I own property in Austin as well as here in Houston. I have lived in highly-structured cities with strict zoning and I have lived in Houston where those are fightin' words. And this is what I have learned:

Austin is a mess. A beautiful mess, but many people in Austin are destined to live in small ramshackle shacks that they paid dearly for because of the planning and zoning process. Property values in Austin have gone nuts, which is good for me as an investor, but bad for those living on the bottom end of the income spectrum. The ones getting rich are those who are able to gain favor with the planning department for their particular vision for redeveloping this area or that area. Just look at the Muellar Redevelopment project -- building an artificial community and hoping it will stick. The whole concept of 'permeability' is great, until you realize it's really just a code word for 'retention ponds.'

Part of the power of Houston is this open and rational market for property. Why do you think that Houston is the MOST affordable city in the US? Why do you think employers are streaming into Houston? What other big, vibrant city in the US has this standard of living? It's amazing how much home, in as nice a neighborhood, the average working person in Houston can afford! Wasn't Houston just selected as one of the 'greenest cities' in terms of parkland and greenbelts?
The op-ed it responded to was a bit confused to me. Don't we already have regs addressing trees and permeability/water-retention? There seems to be a straight-forward market solution: the flood control district figures out how much it costs them to handle the runoff from a development, and either charges that (all-at-once or spread over time as taxes) or lets the developer build-in their own retention - their choice. This doesn't require comprehensive planning, just narrowly focused regs, planning and incentives by the flood control district.

Overall, I'm glad the Mayor and city council is going to hear from people like O'Toole and Cox with lots of stats and stories on the impacts of over-regulation. It's too easy for political representatives to pass regs as a knee-jerk response to vocal constituents while ignoring the costs, long-term impacts, and problems they cause for the silent majority. It's good for them to hear both sides and try to chart a balanced course that's good for the city as a whole as well as individual neighborhoods.

Unfortunately, the pressure is building. If the new Lanier PAC fights everything with a "give no ground" posture, the citizen pressure will continue to build until some sort of catastrophic event happens, like voters sweeping in a pro-planning Mayor and council that do some really radical damage to our unique and very successful model.

My recommendation: take advantage of the favorable political climate while we have a reasonable Mayor and city council, and while the well-respected 82-year-old Lanier is still healthy enough to engage. Come up with a comprehensive approach to how development should work here (as opposed to the current patchwork), including a set of principles and streamlined code on deed restrictions to make it easier for neighborhoods to enact consensus (i.e. super-majority) restrictions. In essence, find a free-market policy framework that makes 80% of the citizens happy and marginalizes the radical 10-20% anti-growth controllers, aesthetes, busybodies, and NIMBYs. Instead of duking it out between developers and planning advocates, find a "third-way" that acknowledges and addresses citizen concerns, but with a flexible free market approach instead of top-down comprehensive planning. Now that would be a fine and enduring legacy for Mayor White's final term in office...

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Thursday, January 10, 2008

Senator Hutchison Amendment Threatens HOV to HOT Conversions

Caught this in Bob Poole's most recent Surface Transportation Innovations newsletter from Reason. Considering that Metro is actively working on converting our HOV lanes to HOT ("high-occupancy toll" lanes - congestion-priced express lanes open to all, but discounted or free for traditional HOV vehicles), this is an unfortunate dropping of the ball by Kay Bailey...

The Omnibus Appropriations Bill signed by President Bush just before Christmas contained what appeared to be an innocuous little provision from Sen. Kay Bailey Hutchison (R, TX). It imposes a one-year ban on putting tolls on existing federal highways in Texas. Since it’s almost impossible to toll currently free highways under federal law, and since doing so requires a local referendum in Texas, this measure appeared to be purely symbolic—a nice feel-good response to the populist anti-toll movement in the Lone Star State.

But then the people at TxDOT and FHWA started reading the fine print. They figured out that not only does this measure reverse—for one year, and just for Texas—provisions that have been in place since the 1991 ISTEA reauthorization (such as using tolls to rebuild ailing non-tolled bridges and tunnels on the Interstate system), but it also apparently forbids the conversion of existing HOV lanes to HOT lanes. And a number of such projects are in the planning or implementation process in Texas (as in other states).

Back in 2004-2005, I spent more days than I wanted to in Washington, DC, walking the halls of Congress and meeting with various transportation groups, as debate raged over the specifics of tolling and pricing measures to be included in what became SAFETEA-LU. Although there was lots of disagreement over tolling of existing general-purpose lanes, everybody involved in those debates agreed that converting HOV lanes to HOT lanes was an option all states should have—i.e., that by now there was ample evidence that HOT lanes are a good idea, and states should no longer have to get special permission (and a Value Pricing Pilot Program grant) in order to do such conversions. The idea was that the time had come to “mainstream” such conversions. And that’s how SAFETEA-LU left things.

Whether it meant to or not, the Hutchison amendment has now thrown a monkey wrench into efforts already under way to convert HOV lanes to HOT lanes, such as the PPP project on I-635 (LBJ Freeway) in Dallas, and potentially the I-30 express toll lanes (under construction) which are planned to initially open as HOV lanes, with tolling phased in later.

These appear to be unintended consequences of the way the measure was drafted. I hope Sen. Hutchison will support a technical correction to make it clear that her measure applies to not tolling general-purpose lanes, leaving HOV-to-HOT conversions free to proceed, as Congress intended. (Note: for more details on the provision, see Peter Samuel’s commentary at )

Hopefully it will get reversed. In any case, at least it's only for one year. I'm not sure if Metro is on any conversion schedule that happens that quickly, but I'd like to hope so.

The newsletter ended with the following local quote supporting privately financed toll roads:
“When capital comes to the state, we all win, because that means more jobs with good wages and good benefits for the people of Texas. . . . So if someone is willing to come from Chicago or some foreign country and bring capital to the state, we should be greeting them at the border with open arms. The Legislature failed to do this in the last session, and I think that’s a mistake that will hurt us long-term in our efforts to attract capital to this state and help build roads that will end the congestion.”
--Bill Hammond, CEO of Texas Association of Business, speaking at the 2007 Texas Transportation Forum

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Monday, January 07, 2008

Vietnamese-Americans flocking from SoCal to Houston

Over the holidays, the LA Times ran an interesting piece on the mass migration of Vietnamese-Americans from southern California to Houston (hat tip to Joel). Lots of good excerpts in here. Bold highlights mine.
Vietnamese Americans are lured to the Texas city by cheap real estate, a lower cost of living and a burgeoning cultural enclave.
Nguyen is one of many Vietnamese Americans from California who have flocked to Houston, lured by cheap real estate, a lower cost of living, bountiful business opportunities and a thriving, growing Vietnamese community.

Houston offers a slice of the American Dream to Vietnamese Americans who couldn't find it in California.

In San Jose and Orange County, home to the country's largest Vietnamese enclaves, skyrocketing rents and staggering housing prices -- even in a down market -- have become too much for some.

"At first, we thought California is the best," Nguyen said. "It's sad to move from a place we know so well. But here we own a beautiful house and are very comfortable."

Vietnamese business owners from California have followed, expanding or moving their operations to take advantage of the burgeoning community and the lack of heavy competition that defines the teeming streets of Orange County's Little Saigon.

The Vietnamese American migration to Houston is a typical California story, particularly in immigrant communities where residents found their first footing in the Golden State but left for places where the cost of living was lower and the opportunities more abundant.

The exodus of Vietnamese Americans is part of a larger shift in California: As the economy weakens, more people are leaving. An annual study by the state Department of Finance released Wednesday showed that 89,000 more people moved out of California than moved in from elsewhere in the U.S. in fiscal 2007.

Houston's Vietnamese community, now the third largest in the nation, numbered about 85,000 in 2006 -- up a third in just six years, according to U.S. Census figures. (HAIF says 160-180K in the Houston metro; enclaves ranked here)

Community leaders and real estate agents in Houston say they started seeing an upswing in Vietnamese Americans from California five years ago, driven mostly by the city's cheaper housing. Although Hurricane Katrina brought in displaced Vietnamese Americans from Louisiana, residents say the California migration is much larger.

As people have flocked in, Houston businesses have capitalized, reaching out to Vietnamese Americans in California. Real estate agents have advertised houses in California's Vietnamese newspapers. Developers have tried to persuade businesses to expand to Houston. And talk shows on Radio Saigon Houston have spread the word of the booming community in simulcast shows picked up on California stations.

Houston is no longer the Vietnamese community's "best-kept secret," said Thuy Thanh Vu, the radio station's co-owner.

Houston's housing tale is remarkable. Real estate agents boast of clients who sell their California homes, pay for new ones in Houston at a third of the price and have enough left to invest.
The median price for a single-family home in the Houston area is $145,390, according to the Houston Assn. of Realtors. In contrast, Westminster's median housing price is $520,000 and Garden Grove's is $475,000, according to DataQuick Information Services. In San Jose, it's $640,000.

"For what you pay for your mortgage in Houston, you can only afford a rat's hole in California," Vo tells clients.

Vo makes sure to put Houston's best face forward. She picks up prospective California clients from the airport and puts them up in hotels -- free of charge -- for a few nights. She drives clients around the Vietnamese areas, stopping at restaurants she's sure will impress them.
Vietnamese businesses have sprouted in pockets throughout Houston, with most concentrated on a four-mile stretch of Bellaire Boulevard in the city's southwest area. The thoroughfare has striking similarities to Bolsa Avenue, Little Saigon's main drag.

There are Vietnamese supermarkets, large Catholic Vietnamese churches, Buddhist temples and restaurants hawking bowls of noodles that to visitors taste as good as those served in Little Saigon's pho houses. There are Vietnamese-speaking doctors, lawyers and real estate agents. Even the hottest Vietnamese pop stars stop in Houston.

Some Vietnamese-owned businesses from California see Houston's thriving enclave as an untapped market and have expanded their businesses.
But Ho saw many open fields in Houston, which he believes will one day be home to new stores. Plus, the rent for opening a warehouse in Houston is about a third cheaper than in California.

Vietnamese American investors also are pumping millions of dollars into the area, which still has plenty of open space to build shopping complexes and housing subdivisions.

Developer Luu Trankiem is planning to open the New Saigon Shopping Plaza next year, a high-end center on 32 acres near Bellaire Boulevard. The plaza's seven high-rise buildings come at a price of about $300 million.

"You cannot afford to build something like this in California," he said, estimating it would cost three times as much in Southern California.
Trankiem said he saw more opportunities for new businesses in Houston than in Little Saigon, which is congested with thousands of nail salons, restaurants and mom-and-pop shops in fierce competition.

"Houston is the last frontier for investment in the Asian community in the United States," Trankiem said.

Beyond Vietnamese-run business, prospective stores for the plaza also include Ann Taylor and Starbucks, mainstream shops that Little Saigon developers would have trouble luring to its worn-out strip malls.

Houston's Vietnamese enclave also benefits from its diversity. It's next to a long strip of Chinese businesses. Korean, Latino and Pakistani stores also pepper the area. In contrast, Little Saigon caters mostly to Vietnamese Americans.

Trankiem believes Houston's Vietnamese enclave could one day be the bigger, better, higher-end sister to Little Saigon.

Even so, Houston has its challenges. The oppressive humidity forces many to stay indoors during the summer, and some people who have bought homes for investment purposes have had trouble finding renters.

But those who have made the move have found the American Dream at near-bargain rates.

Nguyen's parents, who still rent in California, plan to move to Houston when they retire.

And she's thinking about opening an insurance business. She never thought that was a possibility in Little Saigon, where renting office space is expensive and there are too many competitors.

"Over in California, you're just average people," Nguyen said. "But here, you become upper middle class. You have more money than people over here. You can buy houses and do business."
More support for Houston as an Opportunity City. And it's not just SoCal Vietnamese-Americans. Has anybody else noted the surge in out-of-state license plates driving around lately? They're coming from all over. The secret is getting out.

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Thursday, January 03, 2008

2007 Highlights

I'm back from the holidays, having successfully dodged the travel-wrecking ice/snowstorms of Chicago (the best Christmas gift/miracle I could ask for) to visit the inlaws. It's time for the Fall 4Q07 quarterly highlights post, which in this case sums up all the highlights from 2007. These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument.

Don't forget we offer an email option for the roughly twice/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link (Atom) (or RSS 2.0) is also available. As always, thanks for your readership, and I'm looking forward to an even better 2008.

From Summer 3Q07:

From Spring 2Q07:

From Winter 1Q07:

And don't forget the highlights from the first two years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging).