Monday, April 26, 2010

Drew Carey and John Stossel tell Cleveland to learn from Houston

What started as a humble video segment for Reason TV has mushroomed into a lot of positive PR for Houston (and less than positive for Cleveland).  It started with famous actor and comedian Drew Carey working with the libertarian Reason Foundation on a video series about saving Cleveland, his hometown.  Houston is held up as a "best practice" example for land use regulation.  There are lots of suggestions and positive comparisons to Houston on red tape (minutes 29:20 thru 32), zoning (37:30), and opportunity (47:50). Yours truly has a short cameo at 38:55. (If you want to be able to jump around, the trick is to start playing it, then hit Pause. You'll see the grey loading indicator continue to download the video. Come back later after it's fully loaded and you'll be able to jump to any point you like.)

After the series was released to the internet and Forbes declared Cleveland the Most Miserable City in America, John Stossel at FOX Business News picked it up.  A friend of mine loaned me a DVD of the 45 minute show (thanks Nolte), but I haven't been able to find it online.  There are shorter segments about it here and here.  The first one jumps right into talking about Houston 16 seconds in, and the second one jumps into Houston around 40 seconds and 58 seconds in.  The Cleveland newspaper writes about the show here.

Unfortunately, one of the professors he has on the show to present the other side brings up another one of those Houston myths that just won't die: that you can build anything next to anything, including a strip club next to a day care center or school.  No, we have narrow nuisance and SOB regulations to prevent that.   We also have private deed restrictions. You don't have to prescriptively control everything to prevent the worst-case scenarios.

Then Bill O'Reilly picks up the story in an interview with Stossel (hat tip to Jessie):
STOSSEL: People go to where the weather is good. We already have...
O'REILLY: Well, you can't blame the city for the weather. I mean, look at Chicago. Great city, bad weather. Boston, come on. You can't blame the city for the weather.
STOSSEL: You can rank them for that. And you can blame the politicians for saying we're going to raise taxes to build our wonderful projects, and that's going to make things better. The cities that prosper like Houston are the cities that have fewer rules and lower taxes.
O'REILLY: But remember Houston used to be the crime capital? They cleaned that place up pretty well.
STOSSEL: But Cleveland has 22 zoning categories. Houston has none.
O'REILLY: Twenty-two zoning categories? Very hard.
STOSSEL: In Cleveland, to start a business, a politician bragged, "We could get you in there in just 18 months." In Houston, one day.
O'REILLY: One day? The problem with no zoning is you can have, you know, the No-Tell Motel right next to you. And...
STOSSEL: You could. But that rarely happens. And it's not an ugly city, Houston.
O'REILLY: No, I didn't say it was ugly. Who said it was ugly?
STOSSEL: Lots of people. No zoning. The city planner said it will be ugly. You will have...
O'REILLY: We have a lot of Houstonians watching "The Factor," and I love going to Houston. All right. There you are, the Forbes magazine list, and Stossel laying it down.

We've come a long way.  Five or ten years ago, you couldn't find many people - including libertarians - that were willing to hold Houston up as a land-use model in public because our reputation was so bad.  But now they do, and it's (slowly) changing our national reputation for the better.

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18 Comments:

At 10:37 PM, April 26, 2010, Blogger Rail Claimore said...

Opportunity is one reason I'm planning on moving to Houston if I don't have some sort of job before the year ends.

 
At 5:00 AM, April 27, 2010, Blogger Alon Levy said...

Houston's property taxes are actually higher than New York and Chicago's.

 
At 6:52 AM, April 27, 2010, Anonymous Anonymous said...

That may be true but in New York you have a city and state income tax. In Chicago you have a state tax.

The benefit in Texas is that you can make $1,000,000/year but YOU dictate how much you pay in taxes by the residence you decide to buy. In NYC and Chicago you are paying even if you live in a hovel.

 
At 8:00 AM, April 27, 2010, Anonymous kjb434 said...

Anonymous is right when it comes to taxes. The level you are taxed at in Texas is purely based on your choices on where you live.

I have a friend who makes $100k, but gladly lives in a studio apartment with rent of about $800/month. Because of his choice, he has more disposable income than if he lived say Chicago or New York and happened to find a place a with the same rental costs.

My parents live in Louisiana where their $275k valued home only pays $900 in property taxes a year, but their state income tax jumps way ahead of the higher property tax we pay in Texas. And their income combined is about what I make.

 
At 9:38 AM, April 27, 2010, Blogger Michael said...

>>but YOU dictate how much you pay in taxes by the residence you decide to buy

True, but you don't necessarily dictate your earnings, and therefore it is probably more difficult if you freelance or do contract work (or in a lean economy) to put down $300k on a house here. Paying $7-10k in property tax might be OK some / most years, but not OK in lean years. With more emphasis on income tax versus property tax those variations are taken care of a little bit better for you, and might encourage you to put slightly more money into your house.

Also, it would be nice if there was a website where you could enter 2 zip codes or street addresses, enter your expected income, and see which location you come out ahead in - in terms of property tax + income tax + expected square footage + land area that you could expect to get for a given price. Instead of just guessing (even though I think we'd still come out ahead in Houston).

Also, we need sales price disclosure here - so that our property taxes are based on the market rate of comparable properties, and not some sort of guess from the appraisal district.

 
At 11:02 AM, April 27, 2010, Anonymous poo bear said...

For those who know, are we trending towards more taxes, staying the same or trending away from more taxes?

I have a gut feeling it's trending toward being taxed more as well as towards more regulation. But I suppose as long as every other city is trending towards bigger government, we'll still be behind them in that respect.

 
At 6:58 PM, April 27, 2010, Anonymous Martin said...

poo bear,

There are going to be higher taxes for everyone going forward.

No one is willing (apart from maybe from folks at Reason), cut the major federal social welfare programs (Social Security and Medicare). Even the tea party people are protesting in the street with signs saying "Get Your Government Hands Off My Medicare."

That's evidence of not only the blatant ignorance of some in the the tea party movement but also the fact that even the right (extreme right?) in this country do not want to see major cuts in federal social welfare programs.

So to continue to fund these programs, given the demographic realities, everyone will have higher taxes in the future. It's simply reality. For the past 30+ years we have been living under the farce that we can have our cake and eat it too by cutting taxes while expanding government programs. Well, the piper will eventually come home to roost!

 
At 10:05 AM, April 28, 2010, Anonymous kjb434 said...

Michael, all the data you are looking for is readily available from your counties appraisal district.

Harris County's HCAD.org breaks out the property taxes for all real properties in the county by each entity that has jurisdiction. They even give 5 year and expand historical data on that property.

I'm not completely up to speed other county's online availability, but the information is ready available from their offices.

You have the ability to learn how much a school district, MUD, city, county, community college districts, hospital districts, port authority, etc tax you.

 
At 12:24 PM, April 28, 2010, Blogger Michael said...

KJB -

I know most of the items are available through HCAD or FBCAD etc, but if I'm trying to do a comparison of many cities it would be handy if a site would aggregate that information and allow searching and comparing multiple locations. I don't think it is very easy to figure out currently - without a lot of work for the consumer. Plus you have to know if you'd be eligible for homestead / elderly / disabled exemptions in various localities, etc.

 
At 12:11 AM, April 29, 2010, Blogger Alon Levy said...

Anon, KJB434: the vast majority of people do not make 1 million dollars a year. The super-millionaires are often quite comfortable in Manhattan.

The people who're leaving New York and California for the South are by and large middle-class, or occasionally upper middle-class. At an income of $100,000 a year, your average "What, me save money?" household often pays more in property taxes than in state income taxes.

Michael: the closest thing I know to the app you're suggesting is some maps you can find online for the percentage of income spent on housing and transportation per census tract. (It turns out that Greater Houston ranks dead in the middle of the US on the housing plus transportation metric, and so does Greater New York. The overall lower living costs in Houston come from cheaper groceries.)

 
At 8:42 AM, April 29, 2010, Blogger Tory Gattis said...

"percentage of income spent on housing and transportation per census tract."

As I've pointed out on this blog before, when housing is cheap, people may choose to splurge on their transportation (i.e. a fancier car). That's discretionary - not a cost of living. Everybody can choose a used Civic or Prius to drive around and keep their transportation costs very cheap.

If you look at the ACCRA stats that corporations use, they keep the standard of living constant across cities, and they find Houston to be the least expensive major metro in the country. It's just that a lot of us choose to spend that savings on tricked out trucks, SUVs, and luxury or sports cars rather than save it.

 
At 9:00 AM, April 29, 2010, Anonymous Martin said...

Tory,

One of the biggest costs of transportation here is the need to keep numerous cars per family. If a husband and wife work and you live in the outer suburban areas of Houston with little to no public transit coverage, you HAVE to own more than one car. That is not discretionary; that is a necessity!

I invite you to drive through some of the lower middle class areas of Houston (Aldine would be a perfect place). You will see 3 (sometimes more) cars parked in the driveways of suburban houses, often belonging to extended family (husband, wife, brother, kids, grandparents, etc.). To function out in that area of town, you are basically resigned to a car.

The need for multiple cars per family is part of the reason why transportation costs are so high here. I have family in other, better planned and more transit friendly cities and they get by fine with just one car. Add to that, the distances you have to travel just to get out of a neighborhood in some of these places (again, because of poor planning) and you are going to see higher transportation costs.

 
At 9:15 AM, April 29, 2010, Blogger Tory Gattis said...

I would argue it's no different than 95+% of the country's metro areas. And these families could certainly have chosen to live in town along Metro bus routes. But I'm betting they find cars much more useful, and affordable as well living in Houston.

 
At 9:15 AM, April 29, 2010, Blogger Alon Levy said...

Most of the cost of transportation is not discretionary: it includes gas and maintenance. The upfront cost of a car is high, but not that high. Linear depreciation on a good car works out to about $2,000 per year. The rest of the $6,000 or so the average American spends on transportation is mostly maintaining the car.

 
At 9:24 AM, April 29, 2010, Blogger Michael said...

>>I would argue it's no different than 95+% of the country's metro areas. And these families could certainly have chosen to live in town along Metro bus routes.

Chicago, NYC, Boston, DC, Philly, San Fran etc. clearly make up more than 5% of the nation's citizenry. If you are just going by number of metro areas, you may be right.

>>But I'm betting they find cars much more useful, and affordable as well living in Houston.

I don't think most people make a really informed choice as to where they live, how much it is going to cost, what kind of transportation needs they will have, etc. Witness the number of foreclosures / people walking away from mortgages, people using ARM mortgages with no understanding of them, etc. So to say that they prefer cars over better planning seems to me a stretch of the imagination. The reality is they probably did not have much of a choice - or did not know how to make a better choice.

Also a recent study shows that the thing that makes people most unhappy is a long commute and dealing with traffic, but it is one of the least important factors during the purchasing of a home - as compared with for instance the square footage of a home. That is - people do not make very good choices when buying a home.

 
At 9:36 AM, April 29, 2010, Anonymous Martin said...

Tory,

As far as major cities go, Houston, Dallas and San Antonio are pretty unique in their utter and almost complete reliance on the car. Atlanta and Phoenix are pretty close but even there it is easier to get around without a car than Texas cities. This is MUCH different than most other major cities.

People live out in the places like Aldine because of the price of real estate. It is cheaper out there; something you constantly champion about Houston (as you should). But I find it interesting that you are not willing to see that transportation costs are SIGNIFICANTLY higher here than other cities. I have lived on both the East and West Coasts (both with car and sans car) and I can tell you my transportation costs are higher here; and no, I don't have a "tricked out" SUV...I own a car that is 13 years old.

Alon,

And if you have more than one vehicle (as is required in many, many places in this city), you can multiply those operating costs (fuel, insurance, maintenance, etc.) by a multiple of 2, 3, even 4. Transportation costs are VERY expensive here.

 
At 10:04 AM, April 29, 2010, Blogger Tory Gattis said...

The 95+% guess was based on where population actually lives. The cities you list have good transit in the core, but that's a relatively small part of their population. Outside of that core, people still rely on their cars - even in the outer boroughs of NYC. Maybe not for their commute, but for almost everything else.

There is a *vast* difference in the yearly owning and operating cost of a used high-mileage low-cost vehicle and a new $40K+ low-mileage vehicle.

I'd also like to point out that those housing+transportation cost stats ignore the taxes that go to subsidize transit.

I agree people undervalue their commute in housing choices - which is one reason I support more toll roads so people will factor that into their choices. But, in my experience, most parents see it as a sacrifice they're willing to make for their family to get a nicer home and better schools for their kids to grow up in.

 
At 10:52 PM, April 29, 2010, Blogger Alon Levy said...

Outside of that core, people still rely on their cars - even in the outer boroughs of NYC. Maybe not for their commute, but for almost everything else.

Queens, Brooklyn, and the Bronx all have low car ownership rates. The outer reaches of those boroughs have a high rate of one-car families, as opposed to zero-car or multi-car families, but that still leaves a core of 4-5 million people who rarely drive. The size of such cores often depends on little more than planner competence, of which American cities have little and New York has none.

I'd also like to point out that those housing+transportation cost stats ignore the taxes that go to subsidize transit.

Taxes count as another part of living costs. So do environmental externalities. Otherwise, you'd have to dismiss all of rural and exurban America as a subsidy hog.

I'm almost certain that if you added back tax imbalances, the Bay Area would turn out to be the US's richest metro area, even after living cost adjustment. Its CSA sends about $5,500 per person to the federal government more than it gets back in spending. Houston runs a tax imbalance with the feds as well, but if I remember correctly it's not as large. Of course, this is because people pay taxes based on their income, not their living cost-adjusted income...

 

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