Sunday, November 18, 2018

Iconic urbanist Jane Jacobs would have loved Houston

I've been meaning to comment for a while on this excellent piece reinterpreting Jane Jacobs by Nolan Gray at the Market Urbanism site.  I *love* this, as she implicitly endorses much of the Houston model. FWIW, my own thoughts on Jane's model can be found at Market Urbanism here (or on this blog here).  Here are some of the key excerpts/points:
"I argue that we should interpret Jane Jacobs as a spontaneous order theorist in the tradition of Adam Smith, Michael Polanyi, and F.A. Hayek. Built into her work is a profound appreciation of the importance of local knowledge, decentralized planning, and the spontaneous orders that structure urban life. Needless to say, this is not the prevailing interpretation of the importance and meaning of Jacobs’ work. Two very different alternative interpretations prevail. In this post, I argue that both interpretations are mistaken."
She did NOT support a form-based code, nor was she a NIMBY:
"Between the publication of Death and Life and 1961 and her passing in 2006, Jacobs regularly advocated for performance zoning, a form of zoning that focuses exclusively on the negative externalities of new development. At the 1970 event, Jacobs even articulated the key issues that such a performance zoning code should focus, including noise, pollution, scale, signs, traffic generation, and demolitions (VMT p. 216). “Under performance zoning, far greater freedom of land use could be permitted than is now the case, with superior results for the environment.” Given that her theory of urban growth and change militates against stricter top-down land-use controls, and her advocacy of performance zoning suggests a viable alternative to the status quo, there is little reason that Jacobs’ observations about urban design should be taken as a blueprint for any kind of form-based code or transect zoning."
I highly recommend reading the whole thing.

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Wednesday, November 14, 2018

Amazon HQ2 winners vs. Houston

Today's guest post is from Oscar Slotboom:

Observations on Amazon's HQ2 Announcement

Regular blog readers may recall my October 2017 post where I assessed Houston's chances for winning HQ2 and concluded that Houston and Amazon were a poor match, and Houston had no chance of winning. Of course, Houston was not among the finalists, which in my view was a good result since it avoided the expenditure of local time and resources in a futile effort, although the Greater Houston Partnership may have gladly incurred the cost for the "prestige" of being a finalist.

Tory subsequently added his views (1, 2) on Houston's lack of finalist status
  1. Amazon did not want to compete with the oil industry for talent, since periodic booms make the industry flush with cash for raiding talent
  2. Amazon did not want to be seen squeezing Houston for incentives after Hurricane Harvey
A Good Business Climate with Low Costs Was Not Amazon's Priority
Now that we know the winners, it is clear that Houston was totally incompatible with Amazon's HQ2 desires. Houston's strengths are a low cost of living, ample supply of housing, and a good business climate, providing a lower cost of doing business. Finalists Atlanta and Dallas also have these strengths. Amazon chose the cities ranked #1 and #3 for the highest cost of living in the U.S. (chart from Monday's Chronicle). The much smaller operations center in Nashville slated for 5000 workers is a lower cost location, however.


(click to enlarge)
On Sunday the Dallas Morning News reported on the higher costs of living in NYC and DC, particularly housing, including these graphics.




It appears that the deciding factors were public transit and workforce availability in both cities, and enhanced ability to influence the federal government with the Arlington location (as well as being convenient to Jeff Bezos' DC home). New York state is reported to be providing $1.5 billion in incentives plus the potential for tax credits per eligible employee, while Virginia was reported by WSJ to "grant $550 million over 12 years as long as Amazon creates 25,000 jobs with an average wage of over $150,000."

In a Twitter post after the initial leak of the winners, Tory mentioned that the selection may be designed to attract a certain workforce, mainly recent college graduates and single 20-somethings who want to live in trendy cities, while frightening away 30-something family-oriented employees who won't be able to afford housing (or face super-long commutes) and 40+ workers who won't want to pay the premium to live in a trendy area. The smaller Nashville office, in contrast, may be attractive to everyone.
"Confirms my suspicions that tech companies strongly prefer cheap young single employees willing to work long hours over older family-centered employees that cost more and work less, so they pick cities as family-unfriendly as possible to drive that turnover."
Houston's Response
Of course, Houston's exclusion from the finalist list forced some introspection on our competitive position for attracting tech jobs, and spurred local leadership to strengthen tech-oriented startup activity, as was nicely reported recently by the Dallas Morning News.

But making Houston attractive to a big tech employer like Amazon will be very difficult and may have negative effects, since a workforce realignment to Amazon-style tech skills may weaken or starve the specialized and disparate STEM skills needed by local industries. But that's another topic.

Head Scratcher
While Amazon has massive revenue and a huge market capitalization, it reported good profits for the first time only this year, and is generally a low-margin operation. It seems that Amazon will have to pay higher wages for those 50,000 workers in NYC and DC, maybe much higher, as compared to other finalist cities. The Virginia incentives appear to require an average salary of $150,000 per employee, 50% higher than the $100,000 listed in the original Amazon requirement. Also, the majority of those 50,000 jobs are likely to be routine, run-of-the-mill IT and administrative jobs, not really requiring a premium workforce in an elite location and easily handled by a lower-cost workforce in Chicago, Atlanta, Dallas, or other finalist cities.

Biggest Losers
Chicago and Atlanta, which are both very qualified, have excellent downtown locations available, really wanted to win and were believed to offer substantial incentives. The #3 loser Dallas, which was less qualified due to weaker higher education and no prime downtown site, offered up to $1.1 billion in incentives for the full 50K jobs (or $550 million for 25K jobs). Maryland and Newark offered massive incentive packages but were passed over for other locations in their regions.

Houston can take solace in the fact that Atlanta and Dallas, which are our closest competitive/peer cities, both were shut out.

Cities that Win By Losing
Boston, Austin, and Denver, which all would sustain substantial negatives from the large Amazon presence.

The other finalist cities were not qualified and had no chance of winning, but did get some good press from being on the finalist list.

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Monday, November 05, 2018

Contrasting Dallas and Houston

A couple of items in recent months have highlighted differences in Dallas vs. Houston to me.  The first is this Urbanophile story about a "carpetbagger" critic of Dallas that is having a big influence on the city.  It just highlights to me how much more self-conscious Dallas is of its image - it went all-in on an extremely expensive and stupid commuter rail network, and now it's drinking the urbanist anti-sprawl kool-aid. Houston is full of pragmatic engineers not-so-concerned with looking good to the coastal elites.  Thank goodness.

Next is this article which is not so interesting in itself (typical anti-sprawl), but has some insightful graphs on college-degrees and incomes by the distance from downtown for different Texas cities.  Definite 'donut' effects, except in Austin, which is a little odd.  But I found it interesting that it shows how much more successful Houston has been at urbanizing with more high-incomes and college-degreed in the core than Dallas.  I'd attribute it to our lack of zoning allowing densification to meet demand - more apartments, towers, and townhomes.

(if the formatting of these graphs gets messed up, you can find them here)

Dallas-Fort Worth

While the suburbs still account for most of Dallas-Fort Worth’s population growth, downtown neighborhoods have seen the highest increases in college-educated residents and incomes.
Change in residents with a college degree, 1990-2012
0510152025Miles from city center-5010203040%
Change in per-capita income, 1990-2012
0510152025-5,000010,00020,00030,000$40,000

Houston

Houston’s urban neighborhoods and suburban developments saw increases in college-educated residents and incomes. But there were declines on both fronts in neighborhoods between those two areas.
Change in residents with college degree, 1990-2012
0510152025Miles from city center-5010203040%
Change in per-capita income, 1990-2012
0510152025-5,000010,00020,00030,000$40,000


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