Reason interviews me on Houston's affordability vs homelessness
A couple months ago Reason sent a crew to interview me on Houston's unorthodox, unzoned approach to land-use regulation and how it reduces our homelessness, as well as my suggested solution for zoned cities (spoiler alert: unrestrict all land outside single-family neighborhoods). Their resulting 26min documentary is now available:
Today, the Lone Star state counts 90 homeless people per every 100,000 residents. In California, the problem is almost five times as bad.
I'm really impressed with the Haven for Hope in San Antonio, which combines services with temporary housing. And I find it just staggering that California spends $500-$800k per unit for affordable housing in LA!
The Houston section of the documentary starts at 18:47, and my section starts at 22:03 and runs to 24:20, so about an hour's interview cut down to two minutes of sound bites, lol (pretty typical). Their aerial shots of Houston are from the top of my midrise Midtown building where we shot the interview. The video link below is queued up to my section, but I do encourage watching the whole thing or at least the whole section on Houston.
The decisive argument for school choice, transit agencies go insane, stop road diets, HTX tops home building and affordability, and more
A lot of smaller items to catch up on this week...
Houston #1 for single-family home building permits, and a close #2 for total permits behind DFW. Austin gets the hype but Houston and DFW have the numbers. Hat tip to Oscar. Click/tap on graph for a larger version.
The best argument I've seen for school choice: in states that have implemented it, public schools for low-income students have gotten dramatically better even while not losing many students!
Fortune: The $300,000 starter home is going extinct (archive link): ‘A renter society not because of choice but because of force’ Affordability has collapsed across the country, although Houston and San Antonio continue to outperform. The Dallas collapse is surprising - almost as bad as Austin. Percentage of new homes under construction which are priced under $300,000, according to Zonda Home: (click/tap on graph for a larger version)
Transit Agencies Go Insane. These numbers are absolutely bonkers and yet are getting no media coverage whatsoever:
"In the 1990s, light-rail lines that cost $50 million a mile ($100 million in today’s dollars) were considered extravagantly expensive. A decade ago, the average light-rail line cost about $125 million a mile ($160 million in today’s dollars). Last year, average light-rail construction costs had risen to $278 million a mile (about $310 million today).
This year, the average light-rail cost has grown to $384 million a mile. Average commuter-rail costs have grown from $232 million a mile last year to $447 million a mile. Average heavy-rail costs have exploded from $974 million a mile to $1.4 billion a mile."
"On November 2020, in the midst of the pandemic, Austin voters foolishly agreed to raise property taxes in order to build 28 miles of light rail at a projected cost of $5.8 billion. To avoid congestion, the downtown portion of light-rail lines would go through a four-mile-long tunnel.
No one reading this blog will be surprised to know that, in the short amount of time since then, projected costs have nearly doubled to $10.3 billion. Early this week, the city’s transit planners announced a new plan that would build fewer than half as many miles of light rail."
Cost of living disparities mostly come down to housing. Really great interactive graphs that unfortunately won't copy over to the blog, so be sure to check them out. Houston is the only major city in the lower left quadrant with both housing and non-housing costs below the national average.
Does METRO's Advertising Budget Influence Local Reporting? Plus updated ridership graphs
Today we have part 2 of an excellent analytical guest post from Oscar Slotboom. See part 1 here.
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If you watch the local news you have likely seen advertisements promoting the use of Metro services, especially the heavily-run ad with the Houston Ballet ballerina. So I started wondering, how much does Metro spend on advertising?
Metro's annual reports include the amount for "marketing" which includes press campaigns. However, no detail on the spending is provided. The plot below shows that 2022 marketing expense was $9.3 million, which is well below the amounts in the period 2013 to 2020, with the 2019 peak value of $21.2 million (in 2022 dollars) during the MetroNext 2030 election campaign.
Metro's 2023 budget has more detail on marketing efforts starting on page 191, but no detailed budget amounts for specific activities. The overall communications department has 54 employees, with "marketing and corporate communications" reporting 24 employees. Advertising appears to be covered by the marketing department, which is described as "a full-service, in-house agency providing advertising and marketing services for internal and external audiences." On page 191, the 2023 budget for "Marketing and Corporate Comm" is $15,089,860. The 2022 budget was $14,709,543, which is $5.4 million higher than the reported 2022 marketing expense of $9.3 million. It appears that the communications portion of the budget is included in the line item "Business, community, and government development" in the audited annual report, which was $12.2 million in 2022.
So, it's impossible to determine the amount spent on advertising, but it is likely to be in the range of $5 to $7 million per year. It's plausible that Metro spends around $1 million at each of the four major local TV stations.
So imagine that you are the advertising manager at Channel 2 in charge of the Metro account with $1 million annual billing. If the news staff reports unfavorably about Metro, or even just reports the decline in ridership due to Covid, then Metro could be inclined to shift advertising dollars to another local station. Would Channel 2 avoid negative or unfavorable (but accurate) reporting about Metro to ensure that Metro advertising dollars continue to flow?
I spent around an hour searching the websites for Channels 2, 11, and 26 for reports of the 50% ridership decline due to Covid, or the recent boarding subsidies of $16.98 per rider in 2021 and $15.10 in 2022. I found nothing relating to ridership or the high cost of providing service. (There are plenty of reports about crime and accidents.) Channel 13 search results are overly broad so it was inconclusive, but I found nothing for "Metro ridership" and "Metro covid".
The Chronicle has reported on the poor ridership of the Silver line and other routes, but most reports downplay the overall drop in ridership while emphasizing the recovery, for example, this May 3, 2022 report "Metro ridership surged in March, and it was not just the Rodeo". The taxpayer subsidy per rider, $16.98 in 2021 and $15.10 in 2022, is an easy-to-compute and easy-to-understand statistic, but the Chronicle does not report it. The Chronicle also does not report that fares covered 4.3% of operating costs in 2022.
Most Recent Ridership Data
This plot shows Metro ridership as of the most recently reported data, February 2023. Overall ridership was down 28.4% compared to the 12-month pre-Covid average. This is an improvement over fiscal 2022, which was down 36.3%.
METRO subsidizes riders higher than the cost of car ownership!
Today we have an excellent analytical guest post with some fantastic charts from Oscar Slotboom.
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Metro's 2022 annual report recently was posted online. Last year's report (2021) was the first annual report fully affected by Covid (blog post), with ridership down 50% compared to 2019 and the rider boarding subsidy increasing from $10.01 in 2019 to $18.37 in 2021 (in 2022 dollars).
2022 is the first year in the ridership recovery, which has been slow and is likely to continue incrementally for many years. 2022 ridership was down 36.3% compared to 2019, and the improved ridership lowered the boarding subsidy to $15.10.
This first plot shows Metro's operating budget and ridership. Ridership first exceeded 100 million in 1999 at 101 million boardings, and Metro's all-time peak was 103 million in 2006. Ridership dropped to 81 million boardings in 2010 due to the Great Recession, and the slow recovery increased ridership to 90 million in 2019, the year before Covid. Metro's 2022 $904 million operating expense resumed an upward trend after two years of declines, but the 2022 expense remained below inflation-adjusted values for 2016 through 2020.
The next plot shows the taxpayer subsidy per boarding, determined by dividing the operating loss ($864.6 million in 2022) by the number of boardings (57.26 million in 2022). The 2022 subsidy was $15.10 per boarding, down 18% from the 2021 inflation-adjusted value of $18.37. The more concerning feature of this plot is the steady rise in boarding subsidies before Covid, up 117% (in 2022 dollars) from $4.62 in 2001 to $10.01 in 2019.
We'll probably see some continued improvement in the boarding subsidy, but the slow ridership recovery and increasing Metro budget means it will likely never get back to the pre-Covid value, or even within 25% of the pre-Covid value.
Metro's approved 2023 budget has an $855 million operating budget (page 41) which is suspicious because the 2022 operating expense was $903.5 million and operating loss was $864.6 million. Cost-cutting or more efficient operation would be welcome, but I'll believe it when I see it. Also, the 2022 operating budget was $740.5 million (page 41) but the actual expense was $903.5 million.
A Metro customer making a round trip is two boardings, so the trip subsidy is $30.20. A regular Metro customer making 250 round trips per year will have 250 x $30.20 = $7,550 total subsidy per year. Using AAA data for 2022, the subsidy is higher than the cost to own and operate a small sedan for 10,000 miles, and is about equal to the cost for driving a small sedan 12,000 miles per year. So every regular Metro customer is costing taxpayers the cost of annual car ownership.
This chart shows components of Metro budgets since 2001 (in 2022 dollars). The 2022 budget dropped back to historical levels after the ridiculously large Covid operating grants in 2020 and 2021. Of course, the excessive grants to Metro and transit agencies nationwide was piled onto the $31.4 trillion national debt.
Metro has a longstanding policy of dedicating a percentage of sales tax revenue (originally 25%) to "infrastructure assistance", which is funding for non-transit projects like streets and also includes grants to member cities. The gray line in the plot (2022 dollars) shows the steady increase in sales tax revenue to a new record high of $970 million in 2022, while the green line shows that infrastructure assistance has been flat and was $195 million in 2022, 20% of sales tax revenue. The steadily increasing gap between sales tax and infrastructure assistance appears to be going to boarding subsidies.
Tory has mentioned Metro's low farebox recovery in blog posts. There was a slight improvement in 2022, with the average fare collected increasing from $0.64 in 2021 to $0.68, and fares covering 4.3% of the rider cost in 2022 compared to the all-time low of 3.4% in 2021.
In Part 2, we'll take a closer look at Metro's marketing expense and the most recent ridership data.
In a shocking turn of events, Mike Morath, Commissioner of the Texas Education Agency taking over the Houston Independent School District, announced that he will be replacing its entire HISD administrative staff with AI technology. The decision, which was made in an effort to improve efficiency and reduce costs, will see robots take over all aspects of district management, from budgeting and hiring to curriculum development and teacher evaluations.
According to a spokesperson for the district, the AI technology being implemented is state-of-the-art and will be able to make decisions faster and more accurately than any human ever could. "We're confident that this move will revolutionize the way our schools are run and lead to better outcomes for our students," the spokesperson said.
The AI technology, which has been dubbed "Superintendent Robo," (powered by ChatGPT) is said to be incredibly advanced and able to learn and adapt to new situations quickly. However, some parents and teachers are concerned about the impact this could have on the human element of education.
"I just don't think a robot can replace the personal touch that a real human brings to teaching," said one concerned parent. "What happens if a student needs emotional support or guidance? Will the robot be able to provide that?"
Despite these concerns, the district remains committed to the AI technology and has even planned a special unveiling ceremony for Superintendent Robo next week. The ceremony will be attended by district officials and members of the media, who will be given a tour of the facility and a demonstration of the technology in action.
In an interview with a local news station, Superintendent Robo himself expressed excitement at the prospect of taking over the district. "I look forward to serving the students of the Houston Independent School District and ensuring that they receive the best education possible," he said, in a voice that was surprisingly human-like.
April Fools! While AI technology is advancing rapidly and has the potential to transform many aspects of education, it's unlikely that robots will be taking over the Houston Independent School District anytime soon. Happy April Fools' Day!
Everything above this sentence was written (with very minor tweaks) by ChatGPT with the prompt "Write a funny April Fools article about AI running the Houston Independent School District" 😲
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Hope you enjoyed this year's April Fools post ;-D
Here are previous years if you missed 'em and would like a chuckle:
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