Monday, November 24, 2008

Smithsonian on Houston

Smithsonian Magazine had a recent essay on Houston from a local transplant creative writing professor who's lived here on and off for a decade. He has some really touching things to say about his adopted city, plus a few things I'm not as agreeable with.
I used to joke with my friends in the Northeast that every fall I descend into Texas like Persephone, only to return, come spring, into the light. But after a few years, my feelings about the place shifted. I can tell you everything that's wrong with it: no zoning, bad air quality, impossible climate. Tiny, malicious mosquitoes so tough and persistent you get bitten on Christmas Day. Poor drainage, so that the ubiquitous storms create floods of biblical proportion. It's harder to name just what it is about the place that's gotten under my skin, holds my attention here, makes me want to come back.

In spite of its international petroleum-based economy, its layered ribbons of freeways and corporate spires, Houston still feels Southern. Imagine a hybrid of New Orleans and Los Angeles, with a dash of Mexico City thrown in.
My readers know my regular defense of our lack of zoning - and he himself later points out the vibrancy of our constant change and redevelopment. He's got a point on the air quality and the climate, although it's been noted by others that at least you don't have to shovel or scrape humidity off your car, sidewalk, driveway, or lawn. Drainage is getting better, and I personally have found the mosquitoes relatively mild the last few years (maybe I'm just lucky or in the right part of town?).

As far as the comparison to NOLA and LA, I see the similarities with our Southern culture and sprawl, but I'd also mention that NOLA is a city run by old families and LA has superficial culture that worships celebrity, beauty, and gossip - neither of which apply to Houston. We have a no-nonsense, get-it-done business culture with an openness to newcomers - coupled with a lack of polish that you would expect in a city of energy, health care, transportation, and NASA (none of which are image or marketing-driven industries). I like the what-you-see-is-what-you-get honesty from that lack of polish, but it also has a downside with our weak brand image as a city.

He continues on to our friendly Southern culture, then moves on to our future-orientation:
This particularly Southern social fabric, with its suggestion of a slower pace of life, no hurry in all the world, is eroding. That's not entirely a bad thing; in comes new energy, more urbane possibilities, new futures. Since Houston is about transformation, it seems by nature to be a city without much allegiance to history. If there were a motto on the town flag, I think it might read NO NOSTALGIA.
That's a characteristically Houstonian attitude: What's so hot about yesterday? Let's go forward, let's see who we can be now. A historical preservation organization has been raising concerns that a handsome Art Deco theater in the city's River Oaks neighborhood will be torn down to build a high-rise. But I've come to understand the principle at work, if not its application: Houston is about the new, about transformation and ambition, the making and remaking of the self and the environment. Of course we make mistakes, but in ten years they're gone, and there's space for the next set of possibilities.
Hear, hear. Read the whole thing. It'll renew your fondness for this town. Also scroll down for some great comments too from more fans of our fair city.

Hat tip to HAIF.

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Thursday, November 20, 2008

Is the Texas Medical Center a result of free markets or government?

First, in case you missed it, the Chronicle editorial board backed Christof, Carroll, and I's op-ed from Sunday in their own op-ed this morning calling for Houston to get its fair share of the federal infrastructure stimulus spending on intelligent projects with long-term benefits. Hope our political representatives are taking notice.

Moving on, this is a post I've been saving up for a while based on an interesting email conversation, which I will reproduce here in edited form:

From Niraj:
Do you believe that the deliberate clustering of an industry is a good thing economically-speaking? I'm personally interested in the answer in regards to the Texas Medical Center, which in my mind is one of three clusters in Houston (along with energy and aerospace).

My libertarian friend Chris (also a fan of your blog) was stumped when I asked him this question. He believes generally that the clustering of the medical center is a good thing for Houston's economy because it attracts NIH research money as well as healthcare workers and professionals.

He also believes market forces could have led to this clustering (but not necessarily that it would have), and thus there was no need for government or philantrophy-based direction. In the end, he concluded the de-centralization of medical facilities in the Houston area (e.g., Methodist and St. Luke's building hospitals in Sugar Land, the Woodlands and Katy) is better economically speaking, as more consumers are being served and efficiently so, and that market forces are making this happen.

So in addition to my question above, what is your opinion on whether the clustering of institutions as has happened in the TMC is possible by market forces alone?
My response:
Industry clustering is absolutely a good thing that has been studied by economists over the years. By having a larger critical mass of talent, expertise, and money, more good things happen in a virtously reinforcing circle (like, of course, tech in Silicon Valley, finance in NYC, autos in Detroit, or entertainment in LA). The suburban decentralization is just good sense: keep the top specialists at the TMC, and let people attend the easier suburban locations for routine care. They'll come into town for the important stuff.

The thing is, I consider philanthropy *is* a market force. It's still individuals acting of their own free will without govt interference. The TMC clustering happened because of philanthropy, and it hasn't happened in other cities because it didn't there. I tend to think natural forces for hospitals would decentralize them so they each have a niche region they dominate. That's good for the hospital, but doesn't yield the clustering benefits (mainly around research and their spinoffs). The clustering benefits the city as a whole, but I'm not sure it completely benefits the individual hospitals, who face stiff competition right next door to each other. Of course, that competition is what drives their high performance.

Hospitals need to differentiate themselves from the competition just like any other business. Normally, one of the easiest factors of differentiation is geographic convenience to potential patients. That would spread them over the city, and each would probably be close to "average" in each of its departments. But the "market" does not just include hospitals and patients, but city-boosting philanthropists. They think, "if we can get the hospitals to cluster, they will have to differentiate on factors other than geographic convenience, like top-notch specialty departments different from the other hospitals around them, and that will make health care an export industry beyond the city, boosting its economy." That's a harder route to differentiation, so the hospitals need an incentive to participate by clustering. I believe that incentive in TMC's case was free land from the philanthropist.

Now, in some cases, like cancer, it's clear MD Anderson rules, and if someone has serious cancer, that's where they go, regardless of their local suburban hospital. But other specialties are more competitive, so the suburban branches help boost differentiation based on geographic convenience (as well as being closer to populations most likely to have good health insurance), but the most sophisticated specialties are still centralized for the necessary critical mass.
Niraj response:
After reading about the TMC's history (which your email prompted me to do), it seems some credit ought to be given to state and local governments. For one, state-sponsored institutions -- UT-Houston dental and medical schools, UT MD Anderson cancer hospital and the UH pharmacy school, among others -- invested into the TMC and spent billions of dollars to build facilities in the TMC. Also, agreements of the land owned by the MD Anderson trust (now the TMC trust) was given special tax status (no or low tax, I imagine) by local government. City and state government have given deeds to land to the TMC or its member institutions, and vice versa.

This information came mostly from the TMC website here and here.

So it appears on a second reading that philantrophists envisioned the TMC cluster and gave birth to the idea, that is they made it into a reality, in the 1940s by buying and donating land, creating a trust and a governing body and convincing a few institutions to move there. Then, government began to support the project (by giving land, creating a no or low tax zone, enhancing infrastructure and building state institutions on the land) and thus fueled the nascent cluster's growth.

Do you think, based on what I've described, that the medical cluster in Houston was given birth and growth thanks to both free market forces (namely philantropy) and government both, the two working in concert?
My final response:
It's hard to say how the TMC would have evolved differently without the govt support you mention. I still think it would be big and important, but maybe not as much - with slower growth. There's no doubt govt can create good things by directing its resources. The question is always whether better things would have happened if those resources had stayed in the market and been deployed that way. The overall track record for govt is not great, but that doesn't mean they haven't had some very significant positive impacts.
Looking forward to your thoughts in the comments.


Sunday, November 16, 2008

Six Federal stimulus infrastructure projects for Houston

In case you missed it as the lead op-ed in Sunday's Outlook section, and since Chronicle links are notorious for rapid expiration, I posted a complete copy below. It came out of a brainstorming lunch Carroll organized with the three of us and Robin Holzer from the CTC. Topic: if there's going to be massive federal infrastructure stimulus for the economy, what would be the wisest investments for Houston? Unfortunately, they listed the names in alphabetical order, when in reality mine should have been last. Carroll sparked it and Christof was the primary author, as well as the brilliant coiner of the "brain train" label. Let me know your own thoughts in the comments.

Update: The Chronicle editorial board backs us up with their own op-ed.

Put Houston on the right track
Build these projects to prepare the city for the future

Houston Chronicle Nov. 16, 2008

The Great Depression was a tough time for America, but it left us with an enduring legacy of good infrastructure. Bridges built in the 1930s bring commuters into San Francisco. Dams erected in the 1930s power the Northwest. An electric railroad from the 1930s carries high-speed trains from New York to Washington, D.C. A 1930s national park in the Great Smoky Mountains has twice as many visitors as any other national park. And in the 1930s, power lines brought rural Texas into the 20th century.

Today, as our economy continues to stall, congressional leaders are discussing a second stimulus plan. In the Nov. 2 editions of the Chronicle, New York Times' columnist David Brooks suggested building infrastructure. That makes sense: Unlike cars or flat-screen TVs, highways, railroads, and parks are made from local materials by local labor, so stimulus dollars circulate longer in the local community and in the country.

If there is going to be a stimulus bill, we need to make sure that Houston gets its fair share. That should mean funding the projects that are already in the funding pipeline, like light rail expansion. But it also means an opportunity for new projects.

So what projects can the Houston region build now that our grandchildren will look back on in 70 years and say, "That was a great idea"? Here are six.

The Brain Train from College Station through Houston to Galveston. Today, cities gain much of their economic strength from their intellectual strength, from engineers, scientists, medical researchers and MBAs. So we can strengthen our region by connecting intellectual centers and employment centers. That's what regional rail can do: one line, connecting Texas A&M, Prairie View A&M, University of Houston-Clear Lake, the Johnson Space Center and UTMB-Galveston to the urban rail network that will include Downtown, Uptown, the Texas Medical Center, Rice University, Texas Southern University, and the University of Houston-Downtown and Central campuses. All that brainpower, connected by fast, convenient, Wi-Fi-enabled trains, creates one connected, more prosperous, region. And the same rail line also carries commuters to work.

Greener, more effective bayous. In the 1950s and 1960s, the Army Corps of Engineers lined Houston's bayous with concrete. Today, we know better. Natural banks actually handle floodwaters better, and they're not eyesores. Reconstruction of the bayous, and protection of upstream open space like the Katy Prairie, reduces flooding, reduces water pollution and creates wildlife habitat. Moreover, the crowds on the jogging path in Memorial Park, the families picnicking in Hermann Park and the kids filling the fountains at Discovery Green demonstrate that we need more parks. The bayous offer an opportunity to create new public parks all across Houston and its surroundings, as the unfunded master plan for Buffalo Bayou proposes. Projects like these are already underway on Sims and Brays bayou; we need similar improvements along the rest of our waterways.

A less-congested U.S. 290. Serving a huge swath of northwest Harris County, 290 makes for a miserable commute. That can be fixed by adding new lanes in the form of the proposed Hempstead Toll Road, rebuilding the 290-610 interchange, and bringing on- and off-ramps up to modern specifications. The same project could also grade separate the adjacent railroad line, reducing congestion on surface streets while enabling commuter rail and add a bike path. Studies have been done and design is under way; what we need is funding.

Twenty-first century freight rail. A locomotive can move 10 times as much freight on a gallon of diesel fuel as a truck, and it doesn't take up space on our freeways either. Moving more freight by rail would reduce costs, reduce congestion and reduce the demand for oil. But our freight network is at capacity, and its antiquated infrastructure is disrupting neighborhoods, especially in the East End. We need upgraded lines, grade separations and new freight yards. And since Houston is one of the country's largest ports and railroad centers, federal funds for upgrades here would bring benefits across the southwestern and midwestern United States. The recent Houston-region freight rail study lays out a blueprint.

An air pollution superfund. The pollution in our air isn't all our doing — Houston refines oil and processes chemicals for Dallas, Denver, Detroit and countless other places. But we're the ones who breathe those emissions. These local costs stemming from a national benefit are a strong argument for federal grants to pay for upgrades to pollution control equipment.

Complete streets. We've been upgrading our freeways for decades. But surface streets haven't gotten the same attention, as anyone who's driven to the Galleria knows. A good surface street moves cars effectively, safely accommodates bicyclists, pedestrians and transit riders, provides access to homes and businesses, and beautifies the urban environment. To get there, we need to rebuild streets, upgrade intersections and add streets where there are gaps in the grid. That won't be cheap. But if surface streets are more effective, they'll actually reduce how far people need to drive and take loads off of freeways, reducing the need to spend money there.

Building these six projects would help the local economy in the short term, but it would also help us in the long term by building connections to research and education, improving access to job centers, reducing flooding, adding parks, cleaning the air and moving goods more efficiently. That's stimulus we can believe in and that our grandchildren will thank us for.

Spieler writes about transportation in Cite Magazine and on his blog, Intermodality. Gattis writes the Houston Strategies blog. Robinson is an associate professor at Texas Southern University, a former Houston City Council member and chairman of the Houston Citizens Chamber of Commerce.

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Thursday, November 13, 2008

Canada fights carpools, TX economy and housing holds up, smart grid, and more

Some smaller misc items:
  • This is the kind of government regulation run amok that drives me nuts, as Canada beats up on a web site that helps people carpool! I've always liked Canada as a country and enjoyed vacations there, although I've heard they're over-regulated and over-taxed. This example drives that home.
  • This recent PMI report says Houston is one of the lowest-risk residential markets in the nation, along with Dallas and Fort Worth. CA, FL, AZ, and Nevada top the list of high-risk areas. Hat tip to Mark at PMI, which is holding a HOPE NOW foreclosure workshop for at-risk homeowners this Saturday at Lakewood Church (8am to 2pm, prep here).
  • New American City interviews Randal O'Toole, The Antiplanner, which I discovered because it actually links back to me. Quoting Randal:
"So, I’m a pragmatist. I don’t a vision of what a city should look like, I have a vision of a process that allows people to live in the kind of city they want to live in. There’s a significant amount of people that want to live in a city like Manhattan or San Francisco. And there’s a significant amount of people who want to live in a city like Houston. And what I want is a process that allows people to live in whatever kind of city they do want to live in. I think that if a process were implemented that basically allows property owners to do what they want with their property as long as they’re not directly harming other people, and basically allows people to decide how they’re going to get around based on the real cost of transportation – making sure that auto drivers pay the full cost of their travel and making sure that people who ride transit pay the cost of they’re transit, with, perhaps, subsidies for low-income people who need help – if they have that kind of system I think most American cities would look a little more like Houston and Omaha then San Francisco or New York. But we’d still have dense areas – we’d still have Manhattan, we’d still have downtown San Francisco, for the people who want to live in places like that. [for O’Toole’s thoughts on Houston, go here]"

Check out the whole thing, were he discusses the fundamental impracticalities, meager benefits, and tremendous waste of addressing the "evils" of cars with forced density and rail transit.
CenterPoint estimates:
  • Overhead power lines with wood poles - $105,600 per mile
  • Overhead power lines with steel or concrete poles - $264,000 per mile
  • Underground power lines - $2.64 million to $3.7 million per mile
Ouch. I think that pretty much settles the "bury the lines" argument. The "smart grid" option sounds much more cost effective.
Sorry for the irregular posting schedule the last couple weeks. I hope to get back on track next week. Have a great weekend.

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Wednesday, November 12, 2008

An image overhaul for Houston?

Lisa Gray's Chronicle column last week on an image overhaul for Houston re-sparked my interest in a topic I've explored many times on this blog: our identity. First, some excerpts from her column:
Houston's brand

Martin is at her best talking not about history and sociology, but about the stuff she really knows: marketing. Right now, she says, Houston's brand is in trouble.

The world thinks of us (and with reason) as a city built on oil, the headquarters of the world's petroleum industry. In this era of global warming and disappearing fossil fuels, Martin says, that's not the image you want. It's an "anxiety brand."

Anxiety brands play to consumers' uncertainty or fear. Hillary Clinton made herself into an anxiety brand, portraying herself as the seasoned, known candidate, less frightening than her (then) unknown competitor. The result was about what Martin would have predicted: effective at first but not long-term. People don't like anxiety brands.

Martin suggests that Houston could instead become a "compassion brand," known for its friendliness and big heart. When Hurricane Katrina showcased that side of our civic personality, people in other cities were surprised — just as they're surprised, once they get here, to discover Houston's openness to newcomers and its easy racial diversity. We could be known for our niceness — a city akin to Minneapolis, a brand like Kleenex or Dove soap.

Alternately, and more powerfully, we could be an "idea brand," a brand that seems magically new and transformative. The iPhone is an idea brand, says Martin, and so is Barack Obama.

But if Houston became an idea brand, what would its idea be?

All kinds of energy

Stop being the Oil City, Martin urges. Instead, be the Energy City.

Trumpet Houston's pioneering work in new technologies, such as solar and wind power. At the same time, talk about the other kinds of energy that animate the city. Let the world know about the Art Car Parade, about the Menil, about the opera and ballet and Discovery Green. Encourage the city's art scene to grow. Show the world that, while other cities see their economies are drooping, we remain vital — a place where new ideas can fly, new companies can thrive. Make Houston a place where energetic people want to spend their lives.

"Houston has a story to tell," Martin says. "And that makes it powerful as a brand."
While she's right about many of our traits, I'm not a fan of "Energy City." Yes, in theory it can be stretched to encompass the things she talks about, but I think the vast majority will hear it and go no further than, yeah, Houston has the energy industry. Reviewing my old posts on different identity options, I keep coming back to "Open City of Opportunity" as my favorite, or, in an extended version, "Texas' Open City of Global Opportunity." It definitely qualifies as an "idea brand" that reinforces our true identity, with encouraged collective behaviors (nice, friendly, open, entrepreneurial, etc.), rather than a simple brand image.

As an aside: at the conference I just returned from, one of my dinner table conversations focused on Houston. The first vibe I was getting from people was, "Is that really where you want to live?" But after I talked about the lack of zoning and the vibrancy and diversity that creates (I even threw out that Houston might, in spirit, be "the Hong Kong of America"), I could see their opinions shift in a much more favorable direction. I think people are starting to recognize how much new energy gets sucked out of their cities with heavy land use controls.

I'd love to hear your thoughts on Houston's identity/image/brand in the comments...

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Tuesday, November 04, 2008

Houston's great competitive advantage

Different cities have different competitive advantages, from climate to geography to industry clusters to amenities, but Houston has one that stands apart from every other major city in the world: our free market in land use. Brian at the Live Oaks blog makes one of the best short cases I've ever seen for property rights, limited land use regulations, and no-zoning. He starts out discussing the benefits Houston has enjoyed:
For more than 80 years zoning advocates have made dire predictions about Houston's future. Without zoning, we have been told, our city would become unlivable, we would not attract businesses, and we would collapse into a myriad forms of depravity. These predictions have not come true.

Houston's economy has grown steadily and consistently. Housing costs have remained stable. The cost of living has remained well below the national average. All of these economic benefits are the result of Houston's relative freedom.
Next he moves on to an even more compelling moral case for strong property rights. I wanted to do more excerpts, but almost every paragraph makes a good point that builds on the one before it. You just need to read the whole thing:
The Star of the Lone Star State
On an unrelated note, I'm traveling later this week to a conference in Austin, so the next post will be next week.

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