Monday, February 25, 2013

Houston dominates America's growth corridors and makes the case for the world's highest standard of living

The Manhattan Institute has just released a new report by Joel Kotkin on "America's Growth Corridors", which outlines four key corridors that are still growing strongly in an otherwise anemic U.S. economy: the great plains, the Gulf coast, the inter-mountain west, and the manufacturing belt of the southeast.  Houston figures into the report quite prominently as the largest city among the four growth corridors.  If you don't want to read the whole pdf, I recommend searching on "Houston" to find the key elements.  Here are some of my favorite Houston excerpts:
In Houston, for example, the massive Texas Medical Center is now the largest concentration of medical facilities in the world. [It] now ranks as the country’s 12th-largest business district in terms of square feet, ahead of downtown Los Angeles, with plans to expand so that it will rival Philadelphia’s (the seventh-largest) in size by 2014. 
Houston, the clear center of the Third Coast economy, has emerged as one of the country’s megacities. Over the past decade, Houston has had one of the largest increases in employment of any major metropolitan area—up 15 percent between 2000 and 2011.
Houston, Dallas, Baton Rouge, and Tampa have seen stronger rates of growth in the numbers of educated people moving into their areas, more so than such cities as New York, Los Angeles, Chicago, and San Francisco.
Houston and Dallas already have a higher rate of international immigration than such traditional magnets as Chicago, Washington, and Philadelphia. A recent Rice University study found that Houston now surpassed New York as the country’s most racially and ethnically diverse area. 
Today, Third Coast ports Brownsville, Tampa, and Houston have some of the highest rates of foreign immigration in the nation. Traditionally, this migration has come largely from Mexico and Latin America, but newcomers are increasingly arriving from Asia as well. Over the past decade, Houston’s Asian population has expanded by 160,000, or 70 percent, and the city is now home to the eighth-largest Asian population in the nation. Houston’s Asian migration is growing 50 percent faster than migration flows to such established Asian hubs as New York, San Francisco, Los Angeles, and Seattle.
When adjusted for cost of living, wage earners in Houston, Dallas, and Austin, as well as most corridor cities, earn much more than residents of New York or Los Angeles.
This is particularly notable in Houston, which has had one of the strongest increases in manufacturing over the past decade of any major city
The region is now home to several of the country’s leading ports, led by Houston and New Orleans, which also boast the first- and second-fastest growth in custom district traffic among the top five districts, outpacing New York, Los Angeles, and Detroit.
In the future, many Third Coast ports will likely increase trade with Asia. The scheduled 2014 opening of an expanded Panama Canal, with double its current capacity, will likely shift some Asian trade from America’s West Coast ports to its Third Coast. Houston will likely benefit most; the city expects a 15 percent jump in Asian trade after the canal expansion project is complete. In contrast to ports in the Northeast and California, virtually all the Third Coast ports—and many on the southeast littoral as well—are in the process of large-scale expansions.
But, by far, the most important and interesting tidbit in the report is the chart at the bottom of page 15:

As you can see, Houston simply dominates it at #1 with $75k (!!).  DFW and Austin are a distant second and third at $63k, and they fall from there.  This is reinforced by a similar statistic in a recent City Journal article on the Texas Growth Machine (hat tip to Jessie), which notes:
"Adjusted for cost of living, Texas’s per-capita income is higher than California’s and nearly as high as New York’s. Factor in state and local taxes, and Texas pulls ahead of New York."
This further backs my argument that Houston has the highest standard of living in the U.S. (and likely the world) among major metros.

Of course the dominant factor in cost of living is housing, so this strongly validates Texas' free market approach allowing supply to meet demand (if avoiding the housing crash didn't already prove that point).  And Houston's very substantial $12k advantage over even other Texas cities points to the incredible value of no-zoning in keeping housing and other costs of living low (including commercial office and retail costs).  For more on how that works, check out my Opportunity Urbanism op-ed here.  And that leads me to end with this awesome graphic that I just love (hat tip to Josh).

UPDATE: I'm often sharing the linklove with CultureMap, but they're not sharing back :-(

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At 7:50 PM, February 25, 2013, Anonymous Rich said...

Wouldn't Houston have better transit, though, if Metro lost its monopoly and companies like got to offer bus services here too?

I see that the rail line extension's opening has been pushed back once again, this time to 2014:

Are the delays intended to pad relevant Metro employees' and their pet contractors' salaries?

At 8:18 PM, February 25, 2013, Blogger Tory Gattis said...

I do think we need competition in the commuter bus market. Harder to do that with the local lines.

I'd guess the delays have a simple reason: things are running over budget, so tasks get stretched out so Metro's cash flow can catch up.

At 10:40 AM, February 26, 2013, Blogger Jardinero1 said...


Why do you not think local buses wouldn't benefit from more competition? Local operators can judge and serve local markets with small buses better than Metro planning execs sitting in an office on the North Loop or Downtown.

At 11:35 AM, February 26, 2013, Blogger Tory Gattis said...

Don't get me wrong - I'm a big believer in competition. But a local bus network has a lot of interdependent complexities that make it hard - esp. coordination of schedules and transfers. Commuter buses are the right place to try it first, since they don't have any dependencies to the rest of the transit system.

At 4:09 PM, February 26, 2013, Blogger Jardinero1 said...

The complexities and inter-dependencies are precisely why market forces and competition are a better determinant for where buses should run than any single planner or group of planners at metro headquarters.

There are many, many under served communities in the Houston Metro service area. The only reason that private bus lines don't run in them is because they are specifically prohibited by law. The rationale for the ban is exactly what you just offered up. The question I ask is: Should a community go without mass transit altogether or have a slightly imperfect one cobbled together by market forces and entrepeneurs?

At 4:34 PM, February 26, 2013, Blogger Tory Gattis said...

If you're asking if private jitney services should be legally allowed, the answer is absolutely.

At 5:52 PM, February 26, 2013, Blogger Jardinero1 said...

That is actually what I am referring to. Metro does a very good job, already, of running the big buses on the highest demand routes.

At 6:58 PM, March 03, 2013, Anonymous Rich said...

Why aren't more jitney services allowed here? Protectionism for Metro's bureaucrats? That reminds me of life back in Washington D.C. The feds dislike competition...

As for the difficulty involving transfers, if you're referring to ticket credits from one line to another, it seems that that problem can be remedied just as different banks' credit cards can be accepted at different stores.

Competition's good to have. The postal monopoly on delayed mail service needs to end, as well.

At 8:30 PM, March 03, 2013, Blogger Tory Gattis said...

Jitneys are technically illegal so as to keep private operators from skimming Metro's best routes. I think it's a city ordinance. But there are some narrow exceptions that were opened up for The Wave.


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