Monday, July 30, 2012

Metro's big decision and a potential solution

The Metro board is deciding this week on the referendum ballot language regarding general mobility payments (GMP - a quarter of their 1% sales tax goes to city and county entities for general transportation projects, typically roads).  Options include keeping it as-is, getting rid of it entirely, or anything in between, including capping it at the current dollar number and letting the growth increment go back to Metro for transit projects.  The hard part is getting it down to a simple Yes/No choice for the ballot.

Without additional money, Metro will not be able to build the University or Uptown LRT lines anytime in the next decade+.  As I've been saying for a long time, it was a *huge* mistake that Metro built the lowest-value lines first (connecting the fewest key destinations) - they consumed all discretionary dollars and are unlikely to impress voters with their metrics once they are running, thus making it harder to get support for future lines, including the far more valuable Universities line.  Metro is also, unfortunately, following in the footsteps of many other transit agencies: underestimate rail costs, over-promise, under-deliver, and then go back to voters threatening draconian cuts if they don't get additional funds - usually bus service, but in this case critical road funds.

Christof Spieler of the Metro board lays out the overall situation excellently here, including lots of good numbers.  He also has a pretty interesting compromise referendum proposal that would still get the western part of the Universities line built while maintaining the GMP, mainly by relying on the City of Houston to use part of its GMP to do a lot of the prep work along the line.  Unfortunately it also leaves TSU and UH students twisting in the wind if the want to go west, requiring multiple transfers on a very circuitous route - not to mention an ironically named Universities line that wouldn't connect any actual universities (except UST).

Josh Sanders of Houstonians for Responsible Growth lays out the pro-GMP case here.  HRG also has a poll out showing 69% of voters want to increase or keep the GMP as-is (poll details).  To the average Houstonian, road improvements are a higher priority than transit.  Both in his article and in our own conversations, Josh laid out some disturbing points:
  • Metro's last referendum promised a 50% increase in bus capacity, but instead they have cut it 15%
  • METRO promised it would be able to complete the 3 light rail lines by 2012 and would do so with the approved voter bond capacity and Federal assistance.  Not one line has been completed and their costs have substantially acceded their original estimates.
  • Cost for the 3 light rail lines was to be an estimated 1.6 billion dollars, now running well over 3 billion
  • The purpose of extending the 2003 GMP agreement 10 years was that METRO was going to have a substantial amount of work done and there would be evidence on capital costs, operating costs, and ridership numbers to allow for the public to make an informed decision on what the GMP should look like going forward.  None of that information is available because METRO is so far behind schedule.
  • METRO currently has over 500 million dollars of unfunded pension liabilities. 
UPDATE: Some other stats from a public Metro presentation by Walt Mischer, a former chairman of the GHP Transportation Committee and supporter of the 2003 referendum:
  • Actual rail costs are running 3.3 times higher than original cost estimates.
  • Rail lines under construction are running $140 million per mile (!).  That's 3 miles of light rail = 1 Reliant Stadium = 600 lane-miles of major thoroughfare road construction (!!).
  • Overall Metro ridership continues to drop, even during substantial population and job increases.
Given that tax increases will almost certainly be required if local entities lose the GMP, Metro asking for some or all of the GMP back is, in essence, a request for a taxpayer bailout.  Ugh.

I'm not really sure what the right answer is.  I tend to favor something between keeping everything as-is (i.e. the "Metro's chickens come home to roost" scenario) and Christof's proposal.  But there might be an intriguing alternative.  What if Metro kept the GMP as-is, but to raise funds for the Universities line, it sold its HOV/HOT lane network to HCTRA or TXDOT (who I think would do a better job managing and expanding it) and sold its commuter buses and Park-and-Ride lots to private operators?  Metro would get the capital it needs, and Houston could get the vastly more effective commuter transit system it needs: a comprehensive urban network of HOT lanes (maybe branded as “MaX Lanes (Managed eXpress Lanes) - moving the maximum number of people at maximum speed”) connecting all of the job centers and residential areas.

These lanes, in turn, may be best utilized by a private express bus/shuttle/van and park-and-ride market providing single-seat service connecting every suburban residential community with each of Houston's decentralized major job centers.  Private shuttle operators could compete on routes, schedule, reliability, price, service, and amenities like wifi and laptop trays.  These services, in turn, could enable Houston to hold on to and even grow our job and tax base rather than see them dispersed to the far suburbs because of increasing traffic congestion (the new Exxon Woodlands mega-campus is a canary in the coal mine here).  It could also be of great benefit to employers, allowing their employees to be more productive during their commutes (especially email).  Finally, it could also open up new job opportunities to Houstonians by bringing additional options within their acceptable commute range.

I don't know how much money Metro might raise with this approach.  They say they've put $1+ billion into the HOV network.  I'm guessing the net present value of the expected cash stream from them being converted to HOT lanes is far less than that.  Don't know what the P&R land or buses are worth.  But I'm guessing they might get into substantial hundred-million dollar numbers, which would have to be a boost for the Universities line.  An option at least worth exploring?

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Monday, July 23, 2012

Houston's Walled Garden

My friend Neal and I were in a tall building recently looking out over the city, and noted that there is an interesting phenomenon in Houston.  There are now enough tall buildings to almost outline a new zone.  If you go from the Medical Center up to Downtown, west along Allen Parkway/Memorial, south along 610/Post Oak, back east to Greenway Plaza, and then southeast to return to the Medical Center (here's a satellite map of the area - sorry I'm not skilled enough to overlay an outline; UPDATE: a rough outline map by a HAIFer) there is an almost continuous - well not continuous - but a substantial line of skyscrapers.  And it's pretty green within that zone, as least from an elevated viewpoint.  And we named it "The Walled Garden".  Somewhat similar aesthetically to New York's Central Park or Chicago's Millennium Park, but much larger and, of course, not a public park.  It does, in my stretched definition, contain the key parks of central Houston: Hermann, Discovery Green, Eleanor Tinsley/Buffalo Bayou, and Memorial (my concept, my boundaries ;).  It also contains such key areas as the Galleria, Highland Village, River Oaks, Upper Kirby, Montrose/Neartown, Midtown, the Museum District, Rice University and the Rice Village.

"Inside the Loop" is a very common phrase you'll hear in Houston.  I'd like to think "The Walled Garden" could be a similar such phrase describing a narrower zone where young singles want to live (as evidenced by the explosion in apartment construction within it) vs. more family-oriented areas like West U, Bellaire, The Heights, or the various neighborhoods of the east side.  It could also be used for branding and attracting young talent to Houston, like the way people talk about the Near North Side/Lincoln Park in Chicago or Santa Monica in LA or Manhattan in NYC.  By having a unifying label over the area, it's easier to promote it.  And I think "Houston's Walled Garden" has a pretty appealing ring to it.

Now if only they could only fill in the gaps a bit, maybe with a tower somewhere near Ashby and Bissonnet?... ;-)

UPDATE: other options might be "Skyscraper Garden" or "Tower Garden"?  Thoughts on all options or others welcome in the comments.

I'll end with a few small misc items to close out the post:
Finally, I completely agree with the recent op-ed in the Chronicle advocating to keep the Battleship Texas at the San Jacinto battlefield (WSJ story).  They attract far more visitors as a combination than separate.  Trying to get kids to go see an empty battlefield?  Boring.  Oh, there's a real battleship there too.  Cool!

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Sunday, July 15, 2012

Does Houston have the highest standard of living in the world?

Last week New Geography/Forbes ranked Houston the #1 city where paychecks stretch the farthest, based on cost-of-living adjusted average wages.
In first place is Houston, where the average annual wage in 2011 was $59,838, eighth highest in the nation. What puts Houston at the top of the list is the region’s relatively low cost of living, which includes such things as consumer prices and services, utilities and transportation costs and, most importantly, housing prices: The ratio of the median home price to median annual household income in Houston is only 2.9, remarkably low for such a dynamic urban region; in San Francisco a house goes for 6.7 times the median local household income. Adjusted for cost of living, the average Houston wage of $59,838 is worth $66,933, tops in the nation.
Furthermore, #2 Silicon Valley, even with all those high-paying high-tech jobs, was a pretty distant second at $61,581.  Nobody else on the list cracked $57k, a whopping $10k below us.  We didn't just barely win - we crushed it.  If that doesn't speak to the incredible power of no-zoning to minimize the cost of living, I don't know what will.  It's also a major endorsement for the city philosophy of Opportunity Urbanism (TEDx video), where we had similar data (see chart).

Based on that ranking table, I think Houston has a pretty strong case for the highest standard of living in the United States, at least among major metros (we're not looking at Greenwich or Malibu here folks).  In turn, I think that makes a pretty strong case for the highest big city standard of living in the world, given that most other countries/cities have similar or lower GDP/capita and much higher costs of living, especially housing.  If you can think of one that might best us, I'd love to hear about it in the comments along with any data you might have.  Without comparative hard data, it's impossible to make an airtight case, but I think it's pretty solid.

Given this new accolade, I'm thinking we might have to add another nickname to Houston's list:
"Middle Class Mecca"
UPDATE: more evidence/data at the bottom of this post.

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Sunday, July 08, 2012

First class bus, DART declining, big data, big port, debunking creative class, and more

It's been too long since the last smaller items post and the queue has been building rapidly...
In his ini­tial cri­tique, Peck said The Rise of the Cre­ative Class was filled with “self-indulgent forms of ama­teur microso­ci­ol­ogy and crass cel­e­bra­tions of hip­ster embour­geoise­ment.” That’s another way of say­ing that Florida was just describ­ing the “hip­ster­i­za­tion” of wealthy cities and con­clud­ing that this was what was caus­ing those cities to be wealthy. As some crit­ics have pointed out, that’s a lit­tle like say­ing that the high num­ber of hot dog ven­dors in New York City is what’s caus­ing the pres­ence of so many invest­ment bankers. So if you want bank­ing, just sell hot dogs. “You can manip­u­late your argu­ments about cor­re­la­tion when things hap­pen in the same place,” says Peck. 
What was miss­ing, how­ever, was any actual proof that the pres­ence of artists, gays and les­bians or immi­grants was caus­ing eco­nomic growth, rather than eco­nomic growth caus­ing the pres­ence of artists, gays and les­bians or immi­grants. Some more recent work has tried to get to the bot­tom of these ques­tions, and the find­ings don’t bode well for Florida’s the­ory. In a four-year, $6 mil­lion study of thir­teen cities across Europe called “Accom­mo­dat­ing Cre­ative Knowl­edge,” that was pub­lished in 2011, researchers found one of Florida’s cen­tral ideas—the migra­tion of cre­ative work­ers to places that are tol­er­ant, open and diverse—was sim­ply not happening. 
They move to places where they can find jobs,” wrote author Sako Mus­terd, “and if they can­not find a job there, the only rea­son to move is for study or for per­sonal social net­work rea­sons, such as the pres­ence of friends, fam­ily, part­ners, or because they return to the place where they have been born or have grown up.” But even if they had been pour­ing into places because of “soft” fac­tors like cof­fee shops and art gal­leries, accord­ing to Ste­fan Krätke, author of a 2010 Ger­man study, it prob­a­bly wouldn’t have made any dif­fer­ence, eco­nom­i­cally. Krätke broke Florida’s Cre­ative Class (which includes accoun­tants, real­tors, bankers and politi­cians) into five sep­a­rate groups and found that only the “sci­en­tif­i­cally and tech­no­log­i­cally cre­ative” work­ers had an impact on regional GDP. Krätke wrote “that Florida’s con­cep­tion does not match the state of find­ings of regional inno­va­tion research and that his way of relat­ing tal­ent and tech­nol­ogy might be regarded as a remark­able exer­cise in simplification.” 
Per­haps one of the most damn­ing stud­ies was in some ways the sim­plest. In 2009 Michele Hoy­man and Chris Far­icy pub­lished a study using Florida’s own data from 1990 to 2004, in which they tried to find a link between the pres­ence of the cre­ative class work­ers and any kind of eco­nomic  growth. “The results were pretty strik­ing,” said Far­icy, who now teaches polit­i­cal sci­ence at Wash­ing­ton State Uni­ver­sity. “The mea­sure­ment of the cre­ative class that Florida uses in his book does not cor­re­late with any known mea­sure of eco­nomic growth and devel­op­ment. Basi­cally, we were able to show that the emperor has no clothes.” Their study also ques­tioned whether the migra­tion of the cre­ative class was hap­pen­ing. “Florida said that cre­ative class presence—bohemians, gays, artists—will draw what we used to call yup­pies in,” says Hoy­man. “We did not find that.”
Finally, Eric recently interviewed me over lunch for his "Houston, we have a Solution" blog if you'd like to check it out.  It's hard to compress the subtleties of an hour conversation into a few paragraphs (ask any journalist that's talked to me - I am not the master of the short sound bite or pithy answer), but Eric does an admirable job of getting to the rough essence of my answers.

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Sunday, July 01, 2012

Spring 2Q12 Highlights

It's time for the Spring 2Q12 quarterly highlights post. 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; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search). They're not quite as useful as they were when I was still doing multiple posts each week, but still have some value (at least for me).

Don't forget we offer an email option for the roughly once/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link is also available in the right sidebar. As always, thanks for your readership.

And from Winter 1Q12:

And don't forget the highlights from the first few 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) and most definitely in the 5th birthday retrospective.