Providing additional buses and drivers to handle the additional demand of a 36% increase in ridership from going fareless could cost up to $170m a year on top of Metro's roughly $700m budget, and they simply can't afford that.
The safety risks are substantial with "problem riders", which have been an issue when other agencies have gone fareless.
I was impressed with Metro's thorough analysis of six different scenarios, and satisfied that they came to the right (albeit unfortunate) conclusions. I agree that the cost and safety concerns are just too high for most of the scenarios they analyzed. They are still analyzing additional scenarios and I have suggested it would be interesting to add a scenario with a fixed-price unlimited monthly pass, including for Park-and-Ride riders. I’m not sure what the right price point would be - maybe at the equivalent of two local rides a day? - so $2.50 x 30 days = $75/month? I think that could get a substantial boost in ridership (especially Park-and-Ride commuters) without the safety concerns or major loss of revenue. We'll see what comes back...
"Texas Monthly told a story that a lot of people wanted to hear: loosely regulated housing markets like Houston have long embarrassed ideological opponents of free markets who insist that only rent controls and massive public subsidies can provide affordable housing. There is a ready audience for the argument that Houston’s affordability is a mirage. If you ever find an argument like this tempting, though, ask yourself: is it more likely that you’re mistaken, or that the millions of Americans voting with their feet are?"
Nobody wants to leave Houston! Well, I might be exaggerating a bit, but this CityLab piece shows Houston as the 9th most popular city for inbound apartment searches, but doesn't even make the top 20 for outbound apartment searches (which does include both Dallas and San Antonio). And Houston and Miami were the only top ten metros not on the outbound list - not bad company! I think that's a really nice sign for your city when there's a lot more inbound interest than outbound, even with the oil bust.
Houston Is Now Less Affordable Than New York City?!
"There are three kinds of lies: lies, damned lies, and statistics." -Mark Twain
This week the big Houston ruse was uncovered - the illusion unveiled. I know you're thinking I'm talking about a certain baseball team, but I'm talking about Texas Monthly's expose that Houston is less affordable than New York City. Evidently Houston has been suckering millions of people to move here with the false promise of affordability - and they all fell for it! (I guess because they're all bad at math?) Suckering that many people has to be one of the greatest frauds perpetrated in history, right? Well played, Houston, well played. But now the truth is out and it's all going to come crashing down.
As news gets around, hundreds of thousands of Houstonians will soon be putting their house on the market to move to NYC. Why wouldn't they? Clearly it's cheaper to live there. Texas Monthly and an "unbiased" nonprofit say so.
"Martha, call our real estate agent: we're selling the home and moving the family! It says right here we can give up our four-bedroom house and two SUVS, move to a one-bedroom apartment in the Bronx, and come out ahead!"
"Oh Bill, that's a great idea! I'm so ready to trade in the Escalade for standing-room-only subway rides - we'll save a fortune! But what about the taxes?"
"Well, it doesn't look like the study says anything about taxes, so they must not be an issue in New York..."
April Fools came early this year. Thanks, Texas Monthly.
Now we can move on to the dry, fact-based part of the response to the study:
There is absolutely no normalization of size or quality of what people get for what they pay - all they look at is what people are actually spending. In NYC, you might get a cramped apartment with roommates vs. your own house in Houston. Same with the transportation: tax-subsidized subway fares (and those taxes are ignored in the calculations) vs. your own nice car/truck/SUV.
By the calculations in this study, if you move from NYC to Houston and spend the tax savings on a better house and car, your life got worse because their percentage of your income went up! 🙄
Conversely, using the methodology of this study, NYC can zoom up to #1 by jacking up their taxes high enough to leave less than 40% of income available to their citizens for housing and transportation!
As I've said on this blog before, spending on a luxury vehicle (including depreciation) is *not* a basic cost of transportation, yet they include it in their figures. A person can get around Houston quite cheaply with a used Toyota Prius if they choose to. The fact that lots of people choose to splurge their extra discretionary income on a nice ride does not mean Houston is an expensive city to get around! The same line of thinking would say that people in West Hollywood spend a lot on clothes, so they must not have access to affordable clothing! 😅
According to this study, if you move from Houston to LA, you'll actually save money! Could that be because, after taxes, you'll just have less money to spend?
Also according to this study, if you move from Houston to San Francisco, you'll reduce housing and transportation from 49% of your income to 42% of your income! And yet for some reason, masses of Houstonians don't seem to be picking up and moving to San Francisco?
Comparison
of the costs of living in Houston v New York (MSA)
The test
of whether one metropolitan area is more expensive than another is the cost of
living --- the cost of all goods and services, not only housing and
transportation. The latest regional price parity (RPP) data from the US
Department of Commerce, Bureau of Economic Analysis indicate that the New York
metropolitan area has an RPP of 122.3 for all items (100.0 being the national
average). The Houston metropolitan area has an RPP of 101.7. The cost of living
for renters is thus 20 percent higher in New York than in Houston.
Other
factors would make this difference even more. The just-issued 16th Annual Demographia International
Housing Affordability Surveyindicates that the median house cost in
New York is 50 percent more expensive than in Houston (comparison of the Median
Multiple, the median house price divided by the median household income). This
is a bigger difference than among renters, with New York median rentals being
30 percent higher than in Houston, according to the 2018 American Community
Survey.
Finally,
state and local taxes are far higher in New York than in Texas. According to 24/7
Wall Street, New York taxation is about two thirds higher than in Texas.
New York has the highest state and local taxes according to this analysis,
while Texas ranks 45th.
Finally, just a self-reflection question for Texas Monthly: are you still actual critical-thinking journalists, or just clickbait publishers now?...
Media coverage for eliminating Metro fares, HTX accolades, growth, and density revolution - and are we really gentrifying that fast?
The featured news this week is that I was interviewed on both local NPR/KUHF and KPRC about my proposal that Metro eliminate fares. Hopefully, we'll hear some positive news on it from Metro during their upcoming board meeting.
Moving on to other items this week:
Chronicle: Houston gentrifying faster than other Texas cities, Fed analysis finds. What I think this analysis misses is that Houston's lack of zoning allows densification much more easily than other cities, and we have created tens of thousands of new apartments, condos, and townhomes near downtown in recent years allowing higher-salaried newcomers without necessarily displacing existing residents. I'm not saying gentrification and displacement is not happening (I'm sure some is), but average incomes can certainly move up substantially by adding new residents to new density without displacing existing ones.
"When you choose a place to live, you have to strike a balance between what you want and what you need. Big cities have lots of amenities and job opportunities, but they're often extremely expensive. Smaller areas tend to be a lot more affordable, but you might not be able to come close to earning as much money as you want in order to achieve your financial goals.
But if you want the best of both worlds, there's one city among the largest metropolitan areas in the U.S. that strikes the right balance. As research from The Ascent into salaries and costs of living discovered, the Texas city of Houston should be high up on your list if you want a major population center that won't strain your wallet.
...
One reason Houston has been able to keep itself as affordable as it has is that it lacks the extensive land use regulation that many similarly sized communities have. In many cities, zoning laws make it difficult for real estate developers to build new projects to provide more housing for residents, and that can keep housing prices artificially high. That hasn't been the case in Houston, where ample land has allowed the city and its suburbs to expand outward and support a growing population.
...
For those seeking a big-city experience but wanting to stick to a budget and even put some money in the bank, Houston offers an attractive balance. With everything a major metropolitan area can offer at a fraction of the price tag you'll find in many similarly sized cities, Houston's worth a closer look for those who want it all."
"Perhaps more impressive is how much Texas expanded from April 2010 (when the last official U.S. headcount was conducted) to July 2019. During that period, Texas added 3,849,790 residents, according to the Census Bureau. To put that into perspective, nearly 4 million people live in the entire state of Oklahoma. Texas' population jumped 15.3 percent from 2010 to 2019, the third highest growth rate behind the District of Columbia and Utah.
Experts cite economic and job growth — along with a low cost of living, a low cost of doing business, and low taxes compared with many other states — as drivers of Texas' population boom. Helping fuel the boom are substantial population spikes in the state's four largest metro areas: Austin, Dallas-Fort Worth, Houston, and San Antonio."
Finally, I'd like to end this week's post with a video of one of our COU events. It's a bit long, but a good one to leave on in the background while working at your computer. SMU-Cox Folsom Institute for Real Estate, the SMU Economics Center, and the Center for Opportunity Urbanism presented a lively discussion on Cities, Suburbs, and the New America, and Minorities, Immigrants, and Millennials in America’s Favorite Geography. The event featured presentations from former Secretary of Housing and Urban Development Henry Cisneros, author Joel Kotkin, and MIT Professor Alan Berger.
Three perfect days in HTX, growth forecasts, increasing our density, reducing homelessness, protesting property taxes, and more
Happy New Year/Decade everyone! Hope you enjoyed your holidays as much as I did (OC/LA w/ family). Lots of backlogged smaller items, but before we get to them, a short word about our sponsor: if one of your new year's resolutions is to save big money on electricity this year, My Best Plan is incredible at absolutely optimizing the lowest-cost electricity plan for you. I've known David over there for years (fellow Rice MBA), and his optimization algorithm is the best, bar none. And completely unbiased too, which can't be said for some of the other optimizers out there that have been uncovered as fronts for electricity marketing companies. Send him (or me) your latest electricity bill to get an estimate of your potential savings - it's free, and you have nothing to lose while potentially saving hundreds or even thousands of dollars (as he's saved me over the years).
On to this week's items:
The Greater Houston Partnership has released its 2020 Employment Forecast. Only time will tell if their vision is 20/20... (sorry, couldn't help myself! ;-)
Speaking of density, the City is moving forward with plans to allow more density (reduced setbacks and parking) near transit, but Michael Skelly doesn't think they're going far enough. I think it's a modest start that can be expanded incrementally to minimize opposition.
An open dialogue on serious strategies for making Houston a better city, as well as a coalition-builder to make them happen. All comments, email, and support welcome.
