"Techstars isnât the only entity scaling back in Austin, either. In November, unicorn Cart announced that it was moving its headquarters back to Houston after relocating to Austin in late 2021. The company, which describes itself as an e-commerce-as-a-service business, reached a $1.2 billion valuation in June after raising a $60 million Series C round of funding.
Mitch Goulding, director of communications at Cart, told TechCrunch via email that the company had originally relocated its headquarters to Austin âwith the explicit goal of attracting more software talent.â But as the company continues to scale (it claims to have seen its revenue climb by 9x since the end of 2021), it decided it needs to âaugment other areas of the company,â including HR, finance, accounting and legal.
âWe feel the move to Houston will unlock a deeper talent pool in these areas based on its position as a hub for major business,â Goulding said.
Itâs also a matter of cost and convenience.
âCosts in Austin are high relative to Houstonâs affordability, [and] Houston is also more accessible,â Goulding said. âIt is typically easier and cheaper for employees flying in. It also tends to be easier for employees who drive in from across the state.â
"In Houston, Black-owned businesses have been thriving, with the city now rivaling Atlanta as a destination for Black families and young people.
âEveryone is coming to Houston,â said Victoria Walsh, 30, who moved from New Orleans for a restaurant job in 2018. âThereâs a whole lot of jobs, a whole lot of new concepts, a new pop-up each week.â...
The city of Houston has long had thriving Black communities, but in recent years, the new arrivals have driven a kind of renaissance that is fueled, in large part, by who they are: middle-class Black people from other states with good jobs and business ideas. ...
âWhen you look at other cities, theyâre not as diverse as Houston,â he said. âThey donât have as many opportunities.â
"Now, Houstonâs transformation to an international hub for a growing number of multinational corporations â backed by one of the nationâs busiest international airports and global shipping ports â has helped propel the city to the top of the second annual FT-Nikkei Investing in America rankings. ...
That reputation has drawn in businesses both big and small. The Houston area is home to 26 Fortune 500 companies, making it the third-ranking metro area in the country. ...
The transition to green energy is helped by the knowhow that made it a centre for oil and gas. Houston boasts unrivalled technical expertise in energy, including manufacturing, engineering, trading markets, and complex industrial project management. It also has a robust energy infrastructure and the nationâs biggest port by tonnage. ...
âIncreasingly, people working in the energy transition space are saying, you know, actually where the action is, is here,â says Tudor. âItâs not really San Francisco. Itâs not really Boston. Itâs Houston, Texas.â
Pros đ: pleasantly surprised by Houston; plays up affordability, inner loop density, diversity, and the amazing food scene ("strong candidate for best food city in the US")
Cons đ: bike and anti-car snob, toured Houston on bike in wonderful late October - maybe try coming in August sometime and see how bike-over-A/C'd-car you are then?... đ„”đ I've said it before and I'll say it again: Houston was built around the car because it's the only way to bring an air conditioner with you everywhere you go!
Carbon capture subscriptions, climate entrepreneurs, CA moves to HTX more than Austin, and more
Big idea of the week on Houston adapting to climate change: what if automakers sold a subscription with their cars that reported back monthly gas usage and sequestered that much carbon? Great new product for oil & gas companies to sell automakers...
Moving on to some smaller items to catch up on this week:
âEvery day I meet another oil and gas guy who is now a climate entrepreneur. I think there is going to be an explosion of clean energy activity out of the O&G sector, and weâll be stunned in the next 5-7 years by how many of these problems they handle.â
City Journal: Lone Star Waste - Two Texas transit projects embrace extravagance. Politically connected groups extract surplus from Austin LRT and Texas Central HSR.
City Journal: A Bridge Too Far - Pete Buttigiegâs remarks on Robert Mosesâs âracist bridgesâ flatten history in service to an ideological fad. Hat tip to Jay.
WSJ: How Working From Home Could Change Where Innovation Happens - For decades, âsuperstar citiesâ have been attracting talent and money. But thanks to remote work, their status is likely to change in unexpected ways, bringing tech expertise to places that have long tried to attract it. Profiles a tech exec moving from San Francisco to Houston/Katy for a better quality of life.
Aaron Renn, Governing: The Poor Places That Made Our Cities Richer - Dense, often dilapidated neighborhoods were routes to prosperity for an earlier generation of low-income urbanites. Their destruction has hurt us all. Key excerpt:
"This was cheap housing, but that didnât just mean cheaper rents. It meant the opportunity for ownership. A key characteristic of many of these neighborhoods was what Husock labels âowner presence.â Even in crowded neighborhoods, apartment buildings like the Boston triple-decker or Chicago two-flats allowed residents to buy the building and live in one unit, while renting out the other to earn income. A surprisingly high share of people who rented in these places lived in buildings where the owner was also living. The owners accumulated wealth in the form of equity in their real estate that was a key to their ability to move up economically.
One common factor in these places was a tolerance for housing that reformers judged substandard. Tenements on the Lower East Side, for example, often lacked baths. Levittown houses were tiny, identical boxes on concrete slabs. But the policy response to the legitimate problems of some of these neighborhoods was a cure often worse than the disease. Mass slum clearance and the construction of huge high-rise public housing projects are the most infamous examples.
The replacement of âslumâ housing with public housing was not only a quality-of-life disaster, it also locked its residents into permanent rentership. Detroitâs Black Bottom neighborhood may have been segregated, but it gave Black residents the opportunity to own real estate and own and operate businesses. In public housing, Black residents could do neither, cutting off critical avenues of wealth creation."
Clean energy entrepreneurship in Houston, densification, welcoming refugees, Dallas TOD failure, ADUs, population gains, rankings, and more
Continuing to clear out some backlogged smaller items. A lot of these I tweeted while I was out of town for much of the summer, but just now getting a chance to bring them to the blog:
âEvery day I meet another oil and gas guy who is now a climate entrepreneur. I think there is going to be an explosion of clean energy activity out of the O&G sector, and weâll be stunned in the next 5-7 years by how many of these problems they handle.â
"Austin isnât the densest metropolitan area in Texas. That honor belongs to the nine-county Houston region, which increased from 1,560 residents per square mile in 2010 to 1,858 in 2020, an increase of about 19%."
"H-Town exudes Southern hospitality: The pace of life is more relaxed than many major cities, and they're welcoming, polite, and eager to share the delights of their city with visitors...make Houstonians less cliquey and more hospitable towards newcomers."
This makes me proud. Houston's doors are always open to those seeking a fresh start and new opportunity: "Volunteers from Houston Welcomes Refugees showed up with boxes of items to furnish the familyâs new home." NYT: From Kabul Airport to a Houston Walmart
"In short, TOD is simply a scam. Like Portlandâs light-rail mafia, which guided subsidies to favored developers who would build TODs, Dallas light rail and TODs are merely a way of transferring money from taxpayers to developers."
"There are more than 3,600 ADUs in Houston (according to HCAD data) of which the median size is 530 square feet (max allowed=900sqft). ADUs offer more housing options while maintaining the existing community character."
This week we have an excellent guest post by Jim Crump on the hot topic of the moment: fixing Texas' electric grid so the winter storm failures don't happen again.
Regulation of Electric Power in Texas
Politicians, pundits, and the public at large have voiced deep concern that electricity was tragically unavailable to many Texans during the recent period of extreme cold. Claims that lax ERCOT planning caused the problem are exaggerated. âGrid independenceâ from federal regulation is manageable. The problem lies in the supervisory structure that regulates the Electricity Reliability Council of Texas (ERCOT) - Texasâ Public Utility Commission (PUC), a three-member panel appointed by the state legislature, and our elected officials, ultimate guardians of the public interest.
To start, claims that ERCOTâs planning process is undisciplined are misleading. Published documents (December 2020, January 2021) evidence well-structured scenario planning of capacity, demand, and reserve margin, including grid requirements and fuel types. True, evolving events brought conditions not premised in these studies but laxness is an unwarranted criticism.
The next layer of electric power management: Oversight of ERCOT by the PUC. Here, critical commentary by knowledgeable observers is valid. To begin with, independent management of Texasâ power grid â that is, independent of the Federal Energy Regulatory Commission (FERC) â rests on reasonable logic, not merely the fabled secessionist tendencies of Texans.
Two conditions in combination make Texas electrically unique. First, the ERCOT grid embraces abundant energy resources as well as large urban demand centers, thus the energy system within ERCOTâs reach can self-supply. (âSupplyâ goes beyond fossil sources. The barren mesa region of west Texas is reliably windy.) Next, the gridâs regional limits follow state lines to a high degree; the political boundaries of Texas align with grid infrastructure, El Paso and portions of the panhandle and east Texas excepted. The first condition (grid independence) allows supply without power purchase from other states, hence authority to operate free from regulation by the Federal Energy Regulatory Commission (FERC); the second facilitates rule-making and goal-setting, from the state legislature to PUC to ERCOT.
Results of FERC-independent behavior are subject to debate; certainly positive outcomes can be offered. ERCOTâs market-based model coupled with strong transmission infrastructure linking generation to consumers have enabled rapid growth of competitively-priced electricity sourcing, most recently wind generation and prospectively, solar. ERCOTâs fuel mix report states that wind plus solar accounted for more than 20% of generated electricity in 2020.
However, specific policies of a perhaps lenient regulatory framework appear unwise and call for revision. A large proportion of winter electricity supply anticipated by ERCOT was disabled by frigid weather because established standards for deep-cold winterization had not been implemented. In televised appearances Bill Magness (ERCOT CEO) and Dan Woodfin (Director, System Operations) explained that such standards are provided to generators on an advisory basis, not mandated.
Also, ERCOT manages generation adequacy by pricing methodology, which failed in this severe case. Reserve capacity, like winterization, may require measures beyond market-based methods (a mandate). Of course, bulking up reserve capacity alone would be inadequate in the absence of stricter winterization. Backup generators incapable of startup would have been of no help to Texans in the cold light of dawn on February 15.
Clearer, more aggressive communication to the public might have saved untold damage and pain. Meaningful public advisories that could have helped Texans to safeguard property (and life) were late and limited. Future communication protocols must require updates on rotating or extended blackouts, health and safety information, and practical advice to prevent freezing of water systems.
So, a call to our governor, legislators and PUTC commissioners: Draw yourselves up to full stature, recognize that Texansâ lives are at stake, and formulate firm guidelines (yes, non-market guidelines where necessary) on winterization, reserve capacity, communication, and other requirements that will flow from the public hearings that Dan Phelan, speaker of the Texas House, has so sternly announced. You must put right the executive functions linking our legislature to the PUC and to ERCOT.
Texans suffered due to physical climate conditions, here a word on the political climate. Both major parties must acknowledge shared responsibility for past power decisions. Democrats: Recognize that efforts to decouple Texas from FERC originated when democrats controlling Texas politics acted to shield Texas companies from federal regulators.
Republicans: Abandon the failed narrative that renewables caused the shortage â this is nonsense. Abandon also the impulse to label renewables as menacingly âliberalâ, therefore unworthy of service to the lone star state. For one thing, such pronouncements violate the market basis for electricity sourcing that you claim to champion. Recall also that Senator Chuck Grassley of Iowa, a Republican, is justly regarded by many as the father of wind energy â at least, father of legislative enactment of the wind operating tax credit, a spur to the growth of wind generation.
Our leaders must tame their rhetoric, mandate best operating practices, and modify market-defined guidelines where required to protect Texans.
Hope you emerged from this crazy winter storm + power/water outage week relatively unscathed. I certainly learned the value of stockpiling water and draining water pipes (esp. with a power outage), and ERCOT learned that it's a bad idea to cut off power to natural gas pumps across the state during a winter storm. I hope they spend a bit of time doing analysis before jumping to expensive solutions like full winterization of all facilities. It's possible that if they had simply mapped natural gas pumps and compressors across the state and treated them as critical non-blackout facilities like hospitals, we might have gotten away with short-duration rolling blackouts that would have been far more manageable (like 2011).
"Solutions will have to be nuanced and incremental. Winterizing all power plants would be unnecessarily expensive, and so would a complete overhaul of Texas' market design, which is partly responsible for consistently low power prices compared with the rest of the country."
And an excellent idea: "One option could be rewarding liquefied natural-gas processing facilities in Texas to both curtail electricity usage and to redirect the feedstock natural gas for electricity rather than for exports."
"to equal the 80 Bcf/d of gas delivered during cold snaps, the U.S. would need an electric grid as large as all existing generation in the country, which is currently about 1.2 terawatts."
Unpopular observation: gas-powered cars, trucks, and SUVs were a critical source of resilience during this never-ending mass power-outage disaster by providing heat and recharging. If we all had electric vehicles, this disaster would have been epically worse. A hard truth.
"Grant Ruckel, vice president of government affairs at pipeline company Energy Transfer, testified that the biggest failure during the disaster was cutting power to gas pipelines, many of which are not listed as essential services, a designation made for hospitals and other critical infrastructure." ...
"Deshotel said he had asked generators how many plants would have gone down if they hadnât lost gas pressure, and the answer was only a couple."
How a Biden presidency can boost Houston, plus the cause of our growth, how LA is like us, Montrose is dead, and a graffiti artist guide to visiting HTX video
A lot of people are probably thinking about a Biden presidency as a negative for the oil industry and Houston, but there are some potential silver linings here. A big one would be a massive federal infrastructure investment bill that could dramatically improve Houston's flood resilience, including the Ike Dike and Galveston Bay Park surge barriers (great overview video). Another would be reopening international migration, which has been a big booster for Houston in the past (and has been significantly suppressed since 2016).
But the biggest potential boost would be the oil industry giving him a viable alternative to the Green New Deal. Instead of banning fracking or federal drilling permits - which just imports more oil from the Middle East - how about a tariff on imported oil to boost local jobs while also reducing carbon emissions? (by keeping prices up) Could the industry give him cover to get it passed and popular with the public? How about channeling the industry into something it has the expertise, infrastructure, and capital to do very, very well: carbon sequestration? (i.e. injecting it into the ground) How about encouraging LNG exports to Europe to give them an alternative to coal and Russian natural gas? Or LNG exports to China to displace the massive coal plants they're building there? There are so many ways the oil industry could be part of the solution on carbon, if they would just engage in good faith.
Moving on to some smaller items this week:
Market Urbanist Scott Beyer at the Foundation for Economic Education: What's the Cause of Houston's Growth?For decades, Houston has been the nationâs leading example of an âopportunity city.â
"If America had a more market-oriented urban approach, those aspects of Houstonâthe density and affordabilityâwould be the ones most likely replicated. For this reason, âgetting a bunch of Houstonsâ should be an urbanist goal."
Los Angeles: a city that outgrew its masterplan. Thank God. In the first of our regular series of dispatches from around the world, this longtime LA resident argues that his city's endless variety should be a key part any new metropolis's design. Sounds a lot like Houston. Hat tip to George.
"The very lack of defined form and cultural tradition here, the statelessness of the city itself or those who live in it, allows for a distinctive type of vitality that I've felt nowhere else."
Finally, I'll end with a fun video: Houston by a Local - Travel Tips for Houston - A Day in Houston, Texas. Discover Houston with a local: Graffiti artist Gonzo 247 shows you highlights of his home town in the U.S. state of Texas. One of them is Space Center Houston. Hat tip to George.
A better alternative to channelizing Buffalo Bayou, VC leaving CA for TX, top life science and entrepreneurship rankings, big solar, and more
My lead item this week is my proposed alternative to channelizing Buffalo Bayou or an expensive tunnel to better drain the westside reservoirs and avoid a future Harvey flooding tragedy: a 27-mile drainage trench or pipeline(s) using power-line right-of-way, satellite mapped here. I got inspired after reading Jim Blackburn's Chronicle interview about how bad the Army Corps of Engineers study was. And if a trench is problematic for some reason, maybe giant pipelines like these could work for a small fraction of the cost of a bored tunnel? Or the trench could be covered? Would genuinely love to hear feedback in the comments on the feasibility of this from people more knowledgeable than I...
"Houston is on track to be a top market for life sciences. The report factored in size and growth of life-sciences employment, venture capital and National Institutes of Health funding, and more."
WSJ: California, Love It and Leave It - Bad policy has made the state unlivable, so I moved my family and my venture-capital firm to Texas.
"Californiaâs restrictive zoning laws make it nearly impossible for many essential low- and middle-income workers to live anywhere near major cities. In Texas, permissive zoning allows every member of our staff to live close to work and spend time with friends and family instead of enduring grueling commutes."
"I think oil and gas is going to be with us a long time. And Houston has a comparative advantage against every other city in the world.
If you get beyond the rhetoric about the energy transition and projections, what is it really about? Itâs about infrastructure. Itâs about an investment. Itâs about technology. And itâs about scale. And those are all things that the energy industry is good at doing. So I think that Houston and the oil and gas companies here will be very much at the center of that. Weâre starting from a point where 84 percent of the worldâs energy comes from fossil fuels today. So youâre talking about a huge infrastructure of investment and embedded activity that just doesnât change overnight. If youâre going to power what is an $87 trillion economy thatâs going to be a $100 trillion global economy, youâre going to need a lot of engineering and a lot of technology and a lot of equipment. And thatâs what Houston and energy companies bring to the table." ...
"...if you did have big restrictions on our domestic oil industry, it would simply mean that we would import more oil. Thatâs because thereâs still 280 million cars in the United States, almost all of which run on petroleum."
Yet another reason to support an OPEC tariff over a fracking ban!
"Americans generally donât give much thought to energy policy, except when they stop at the local gas station for a fill-up. But if state and federal leaders who want to ban fracking and âtransitionâ away from oil prevail, that complacency will change quickly.
You may not think about energy policy, but it thinks about you. Energy is the foundation of society. Everythingâfood, clothing, shelter, your iPhone, you name itârequires energy to produce. When it costs more to supply that energy, the cost of everything else increases. The OPEC oil embargoes in the 1970s, for example, ushered in an era of double-digit inflation."
â...the most dynamic cities have been like Tokyo in the post-war decades, in a state of restless metamorphosis.â He later adds that âmessiness is something to be embraced, especially for a fast-growing city: it is a dynamic feature of urban development.â
Remote work will increase migration in the U.S. Between 14 and 23 million Americans are planning to relocate as a result of businessesâ increasing acceptance of remote work. As a result, near-term migration rates could be three to four times what they normally are.
Major cities will see the biggest out-migration. 20.6 percent of those planning to move are in a major city.
People are seeking less-expensive housing. More than half (52.5 percent) of those planning to move are seeking a house significantly more affordable than their current home.
People are moving beyond regular commute distances. 54.7 percent of planned moves are to locations more than two hours away from their current location, which is beyond most peopleâs tolerance for daily commuting.
The highest-priced housing markets are taking the biggest hits. Rental data from apartments.com shows that the top 10 percent most-expensive markets are losing tenants at a much greater rate than markets in the bottom 10 percent.
A new strategy for securing Houston's economic future
Talk has been growing in recent years about Houston's future in a less carbon-intensive energy world. Will we still be the world's energy capital in the coming decades, and what does that mean? The Greater Houston Partnership and Center for Houston's Future have taken the lead on this challenge with their Energy 2.0 and energy transition work, and I hope they're getting traction with it (despite pandemic distractions). We certainly have a lot of expertise here that can work on big problems like carbon capture with the right economic incentives.
Another strategy is growing our innovation and startup ecosystem to build the companies of tomorrow - especially in energy, space, and biotech - and I think there has been great progress made in recent years, including Rice's building of the Ion in Midtown. One area that has not been as successful is trying to attract tech companies building new offices. To be brutally honest, we can't out-Austin Austin.
The energy transition and innovation ecosystem are both great initiatives to help secure Houston's economic future, but I think there's a third opportunity we're overlooking. It plays perfectly to our strengths:
America's most affordable global city (vs. NYC, LA, Chicago, SF, Miami)
Being more attractive to global migrants than domestic ones (which seem to be more interested in places like Austin, Denver, and Nashville)
Large expat communities from countries all over the world
92 foreign consular offices, the third-largest set in the US after NYC and LA
One of the largest ports and industrial bases in the country
A huge United hub at IAH with nonstops covering all of the Americas in addition to European, Asian, Middle Eastern, and ANZ connections.
Put all those strengths together and what's the opportunity? To be the location of choice for foreign companies establishing their branch office for the Americas, especially industrial ones. There are thousands of fast-growing companies around the world that will need to establish a presence in the Americas at some point, and Houston is really the ideal place for them to put it for all the reasons listed above.
I think we already compete for these to some extent, but there's an opportunity to do it much more aggressively with a formal, well-funded program that cooperates closely with all our foreign consulates to identify their up-and-coming companies and start wooing them as early as possible. Without outside influence, they probably tend to end up in the cities that are more obvious and well-known to them like NYC, LA, and Miami. But if we intervene early and show them how much better Houston will ultimately be for both their business and their employees, I think we can win over a substantial number of them. Their expat employees used to small flats and public transport in crowded cities will be blown away by the equivalent home and car they can buy in Houston, Sugar Land, or The Woodlands!
These foreign branch offices aren't as sexy as green energy, tech, or entrepreneurial startups, but over time they could provide a very strong foundational component to Houston's economy with a whole lot less uncertainty and volatility. Even better, we won't have that much competition - it's an opportunity ignored by most cities as they chase the hot tech companies and try to cultivate their own startup scenes. Foreign corporate offices should definitely be the third strategy to secure Houston's economic future in a world increasingly hostile to oil and gas.
Would love to hear additional thoughts and feedback in the comments...
Food deserts aren't real, energy transition, tourism surprise, NYC's anemic recovery, and HTX pandemic response failure
Just a few items this week:
Bloomberg Businessweek: Houston Had an All-American Pandemic Response: Ignore Until Itâs Too Late - The city knows about disasters. Itâs got a world-renowned medical center. It saw what happened in New York. And it still couldnât stop Covid-19. I know I still shake my head every time I see a full pedal party in Midtown (close proximity + heavy breathing!). Hat tip George. Sad conclusion:
Crisis is brewing from every direction, and weâre as ready as we ever were. Itâs as Hidalgo says: âWeâre right on the edge of disaster. Itâs almost become our way of business.â
âBut a number of civic and business leaders say New Yorkâs reliance on mass transitâand concerns that the new coronavirus could spread through subways, buses or regional trainsâhas kept many people working from home. Cities that have more driving commuters have seen a higher percentage of workers return.â
âNew Yorkersâ slow return to the workplace is the latest blow to the nationâs biggest city, which has also suffered from homeowners fleeing Manhattan for larger spaces, rises in murders and homelessness, and the shutting or partial closings of Broadway theaters, museums and other popular attractions.â
âBut for some New Yorkers who recall the early weeks of the pandemic, when the rates of sickness and death were among the highest in the world, complimentary parking might not be enough to bring them back to midtown and the prospect of mixing with crowds. Many were traumatized, said Chris Jones, senior vice president of the Regional Plan Association, an urban policy organization.â
And hereâs the top rated comment:
âLet's be real. There is no social distancing in NYC whatsoever when the buildings and streets are full. Zero. None whatsoever. Source: a person who's worked in NYC every day for 25 years. â
U.S. Cities Most Reliant on Tourism. WTH?! How does Houston have more tourism workers than Vegas, Orlando, Tampa, New Orleans, Miami, or Austin+San Antonio combined?? Turns out restaurant workers serving locals - which is roughly proportional to population - really swamps out any tourism-specific employment.
"We study the causes of ânutritional inequalityâ: why the wealthy tend to eat more healthfully than the poor in the U.S. Using event study designs exploiting supermarket entry and householdsâ moves to healthier neighborhoods, we reject that neighborhood environments have meaningful effects on healthy eating. Using a structural demand model, we find that exposing low-income households to the same availability and prices experienced by high-income households reduces nutritional inequality by only 9%, while the remaining 91% is driven by differences in demand. These findings contrast with discussions of nutritional inequality that emphasize supply-side factors such as food deserts."
Dangerous HCTRA toll revenue diversions, Ike Dike, rail vs road forecasts, LA transit may go fareless, HTX and the energy transition, and more
A lot of smaller items to catch up on this week after our little diversion into aviation last week.
My lead this week is on Harris County playing games with HCTRA toll road revenue to spend it on things other than transportation, which is super dicey. The state is already in trouble with transportation because they diverted the gas tax to nontransportation needs. Now the county is making the same mistake... trading long-term prudence for short-term pet projects. "For flood control" is PR spin, since they won't have any obligation to spend it on that. Toll money moves into the general fund where they can spend it on anything they like. Oscar made a nice chart to show why HCTRA's money pot is such a tempting target, although he expects it may drop up to a third this year with the pandemic.
"Texas: Number 2 in Net Domestic Migration (just behind FL)
Texas, the nationâs second most populous state had the second largest gain in net domestic migration, at just below 2 million. During the two decades, the two largest Texas metropolitan areas, Dallas-Fort Worth and Houston moved from below the top five to positions four and five respectively."
"And it makes no difference if the analysis includes other potential explanatory factors such as population density, age, ethnicity, prevalence of nursing homes, general health or temperature. The only factor that seems to make a demonstrable difference is the intensity of mass-transit use."
"The articleâs real bias is shown in a paragraph about Bent Flyvbjergâs well-known study on transportation megaprojects. The 2007 study (of a large global database of highway and transit megaprojects) found that average traffic on highway megaprojects was 9.5% more than forecast, while the average rail megaproject ridership was overestimated by 106%. In other words, for every 100 drivers forecast to use a given highway project, 110 did, and for every 100 rail passengers forecast to use a rail megaproject, only 47 did. If anything, the forecasting problem seems to be far worse with rail than with highways but the piece only mentions highways:
And here the problem is partly political; in order to receive federal funding, transit proponents have learned to game their forecasts, inflating ridership by one-third and deflating cost estimates by one-third. This is a well-known trick, and, unfortunately, the article fails to mention it or provide any way to solve this problem."
"The problem with light rail (and the reason it is popular with government officials) is that it is an upper middle class boondoggle. There can be no higher use of transit than to provide mobility to poorer people who can't afford reliable automobiles. Buses fulfill this goal better than any mode of transit. They are flexible and can reach into many corners of the city. The problem with buses, from the perspective of government officials, is that upper middle class people don't like to ride on them. They like trains. So the government builds hugely expensive trains for these influential, wealthier voters. Since the trains are so expensive, the government can only build a few routes, so those routes end up being down upper middle class commuting corridors. As the costs mount for the trains, the bus routes that serve the poor and their dispersed commuting destinations are steadily cut."
The discrepancy in U-haul rates shows the mass migration from CA to AZ and TX. At this rate, soon they'll have to pay drivers to bring their trucks back to CA!
Finally, ending with a fun short video with the "top ten" places to visit in Houston. I've never even heard of #1 before, lol, so see if you agree. Hat tip to George.
"Houston comes third in the overall ranking. The Texan city is a reputable talent hub and, according to the 2019 Academic Ranking of World Universities, is home to five of the global top 500 universities, as well as over 30 international baccalaureate schools. This contributed to its achieving third place in the Human Capital and Lifestyle category.
Houston also placed sixth in the Business Friendliness category. The cityâs welcoming business environment is clearly a hit with investors, as it recorded 53 expansion or co-location projects between May 2015 and April 2020, representing more than a quarter of its total inward FDI and the second highest out of all locations analysed."
Save Americaâs Dying Cities. Hat tip to Judah. Summary recommendations, where I think Houston does ok but definitely has room for improvement:
"Yet, under any circumstances, I believe that the state of our understanding is at least sufficient to provide some basic principles for guiding efforts to improve the prospects of dying cities. First, officials of cities hoping to be successful must be seen as dedicated to managing their municipal enterprise in more honest, efficient, and business-friendly ways. Too many cities have experiences similar to Baltimoreâs, whose last two mayors and a recent police chief have gone to prison for corruption. One reason, as Iâve argued, is that many big city mayors no longer have business backgrounds. As a result, few know how to manage complex municipal organizations, including the challenge of minimizing opportunities for graft. Corruption-free cities where mayors and city councils are experienced in working the intersection of business and citizen interests, which are most often coincident, experience faster growth rates...
Second, mayors and other urban leaders must focus on developing productive entrepreneurship that will make cities more competitive in the future. My research shows that after two decades of betting on entrepreneurs to generate new economies, few cities appear to have benefited from their investment. Mayors should rethink their expectations of local entrepreneurs and the resources they provide to the townâs efforts to encourage new firms. Emphasis should be focused instead on building partnerships with local engineering schools and firms. My research also shows that persons with engineering educations and experience are responsible for starting the majority of new firms that survive and create demand for new jobs.
Third, cities also need to create incentives for residents, especially racial and ethnic minorities, to become owners of local business."
Finally, another great episode of Pop Culture Urbanism with really good insights on how tight zoning regulation forced development to be synonymous with evil gentrification and displacement, instead of a good thing of providing more housing for more people. Highly recommended.
HTX most affordable high-growth metro, couple chooses Houston, TX winning vs CA, airport rail fail, modern innovative transit, and more
I've got a long road trip coming up so posts may get infrequent for a while. This is my attempt to clear out as much of the backlog as possible before leaving:
Houston has pretty affordable rents at the #34 metro on this list. Much more affordable than Dallas and Austin, and even more affordable rents than San Antonio. And every less expensive metro is growing much more slowly or even stagnant or declining, so we are the least expensive high-growth metro. I'd chalk it up to our lack of zoning and free market in apartment development.
Houston is home to more than 500 oil and gas exploration and production firms.
Houston houses hundreds of firms that provide supporting activities to the oil and gas industry.
Houston is home to nine refineries that process 2.3 million barrels of crude oil every day (which makes it one of the biggest crude oil producers in the world).
The Energy Corridor, which stretches for 7 miles along Interstate 10, encompasses many businesses engaged in energy operations.
Houston may soon end up with a second energy corridor due to the continuing expansion of local businesses.
Houston houses more than 4,600 energy-related companies.
The city alone employs around 1/3 of the jobs across Texas in gas and oil extraction.
Houston is the center of foreign investment in energy.
Governing on TX vs. CA: A Leg Up in the Search for Prosperity: Economic Freedom - Despite their very different attitudes toward the role of government, California and Texas have both found success. But the Lone Star State's small-government/low-tax model gives it an edge. Some excerpts:
"Texas is best understood as a place where the private sector prevails over the public sector. Among the 50 states, it ranks near the top in economic freedom, a measure of fiscal and regulatory policy, and near the bottom in overall tax burden. It's a state known for building, with Dallas and Houston routinely among the top metros in new home permits and Austin first in the nation for permits per capita since 2004. But state and local government spending per capita is the 11th-lowest of any state, according to data from the Tax Policy Center. ...
And it's not just people. Businesses are leaving California too, at an estimated annual clip of over 1,000. For 12 straight years Texas has been the biggest recipient of businesses leaving California. Texas has long sought to capitalize on and accelerate that trend, even running ads in California touting Texas' business friendliness.
More than data, though, it's the feeling of what can be accomplished in a state that emphasizes freedom versus one strangled in red tape and high taxes. Houston ended veterans' homelessness in part by cheaply building large supportive housing projects; California cities have spent billions fighting homelessness, but still have tent cities because it costs so much to build affordable housing there. Dallas has, over three decades, built the nation's longest light-rail system, and a private company is planning high-speed rail between there and Houston. California metros have struggled to add capacity to their transit systems, and last year the state's high-speed rail project lost federal funding due to ongoing delay. Perhaps most damning is an annual survey by Chief Executive magazine asking CEOs nationwide to rank state business climates. Texas has been first for 15 straight years, and California in last place for five."
CityLab: How Car-Clogged Houston Could Be a Climate Policy Leader - Houstonâs infamous lack of zoning could become a climate-policy asset as the sprawling Texas metropolis attempts to steer a more sustainable course. Excerpt:
"Indeed, Houstonâs infamous lack of zoning could end up being one of its greatest assets in pursuing climate goals. Without all of the anti-density baggage that comes with zoning â from apartment bans to an onerous approvals process â there is relatively little standing in the way of a rapidly densifying Houston and all of the environmental benefits it brings."
"The best-performing newer systems in our database, such as Minneapolis, Seattle, and Houston, are all compact, serving urban areas near downtown. By contrast, larger light rail systems that stretch into low-density suburban areas tend to underperform. ...
Houston has taken a step in the right direction by abolishing parking minimums in the Downtown, Midtown, and East Midtown neighborhoods, all of which are served by light rail. ...
In Houston, the cornerstone of a recently approved light rail system is a line to Hobby Airport through industrial and low-density residential areas, estimated to cost $167,000 per daily rider. ...
Another form of overexpansion comes from the tendency of light rail planners to overvalue airport service. Itâs easier to form a broad political coalition for airport service than for run-of-the-mill transit improvements. City power brokers like to impress out-of-town visitors with airports, and suburban residents who do not use transit regularly imagine that a train for their occasional airport trips would be convenient.
Airport connectors, however, tend to perform poorly. Airports are usually in remote locations, so light rail to airports requires extensive capital construction; the slow speeds of light rail relative to freeways matter more for long-distance trips from airports to downtown. Moreover, businesses that surround airports, such as industrial suppliers and distribution centers, demand large amounts of land and are difficult to access on foot, making them low-value destinations for transit ridership. Finally, airport noise and pollution make the surrounding areas less desirable for the sort of redevelopment that might improve ridership."
Finally, I wanted to end with one of my most popular tweets ever about walking through a random neighborhood near Midtown and boom - this awesomeness suddenly appears. Think a zoned city would allow this?! Gotta love Houston!
"In Houston, no one has become more intimately familiar with the details of the oil market woes than Chris B. Brown, the cityâs chief financial officer and a fourth-generation Houstonian.
Rare, severe and unforeseen events are known as âblack swans,â a theory that comes from a 2007 book by Nassim Nicholas Taleb, âThe Black Swan: The Impact of the Highly Improbable.â Mr. Brown has taken to calling Houstonâs situation a âdouble black swan.â
About 40 percent of the cityâs economy is tied to the price of oil, Mr. Brown said. That means that when other cities are recovering from the economic damage of the coronavirus shutdown, Houston will still be lagging."
Just an amazing demo of fully autonomous driving by Zoox. It smoothly handles the craziest streets in SF better than I think I could! Well worth watching (26m, not an hour because they play at double speed). They're coming sooner than you think...
"Even now, it is stunning to contemplate the extent to which the countryâs Covid-19 crisis is a New York crisis â by which I mean the city itself along with its wider metropolitan area.
As of Friday, there have been more Covid-19 fatalities on Long Islandâs Nassau County (population 1.4 million) than in all of California (population 40 million). There have been more fatalities in Westchester County (989) than in Texas (611). The number of Covid deaths per 100,000 residents in New York City (132) is more than 16 times what is in Americaâs next largest city, Los Angeles (8). If New York City proper were a state, it would have suffered more fatalities than 41 other states combined.
It isnât hard to guess why. New York has, by far, the highest population density in the U.S. among cities of 100,000 or more. Commuters crowd trains, office workers crowd elevators, diners crowd restaurants. No other American city has the same kind of jammed pedestrian life as New York â Times Square alone gets 40 million visitors a year â or as many residents packed into high-rises.
...
Right now, thereâs a lot of commentary coming from talking heads (many of them in New York) about the danger of lifting lockdowns in places like Tennessee. Perhaps the commentary needs to move in the opposite direction. Tennesseeans are within their rights to return to a semblance of normal life while demanding longer restrictions on New Yorkers.
I write this from New York, so itâs an argument against my personal interest. But I donât see why people living in a Nashville suburb should not be allowed to return to their jobs because people like me choose to live, travel and work in urban sardine cans."
"Thereâs a quality about Houston, though, that transcends its built pattern: affordability. For decades, Houston has been the nationâs leading example of an âopportunity cityâ. It has, like coastal cities, high demandâaka fast growing job opportunities and population growth. But unlike those metros, it builds lots of housing, thus stabilizing prices. The median home price is $190,000, which is just 4/5ths the national average, according to Zillow. Midtownâs median home prices are $309,000, extremely low for a centrally-located urban neighborhood. This affordability has made Houston a refuge for expats from expensive states, and for immigrantsâit is now the nationâs most diverse city.
The affordability can be tied to both Houstonâs density and sprawl. Rather than one being good and the other bad, both forms of growth have helped stabilize prices. But the multi-family infill housing is the most organic outcome to be found in the Houston model. If America had a more market-oriented urban approach, those aspects of Houstonâthe density and affordabilityâwould be the ones most likely replicated. For this reason, âgetting a bunch of Houstonsâ should be an urbanist goal."
This is pretty much the perfect solution to Houston - and the country's - energy woes. And it should please both the right (nationalism and the economy) and the left (increasing the cost of carbon). Coincidentally, I went to Rice with this guy!
"A farsighted leader, argued Andy Karsner, a former U.S. assistant energy secretary, âcould have imposed a variable U.S. tariff or fee on imported oil, which would be easily absorbed while prices are now slumping.â Such an import fee âcould dynamically and automatically kick in incrementally if prices fell below an agreed floor, say $40 to $50 a barrel â the price that U.S. producers need to stay in business and supply America. The fee would disappear if prices jump above the agreed level. Brent crude is now around $31.â
If we guaranteed U.S. oil producers a predictable price floor to enable the least indebted and most productive of them to survive, Karsner told me, it would pay multiple benefits: âIt would raise money for us to invest in infrastructure; prevent job losses for skilled engineers and multibillion-dollar bailouts for U.S. oil companies; keep manageably low gasoline prices for U.S. consumers; and strengthen our energy security from predatory efforts by Russia and Saudi Arabia to wipe out our domestic oil industry.â
But, most important, it would accelerate our clean energy transition, by shielding our electric car industry from foreign-manipulated gasoline prices and our wind and solar industries from temporarily suppressed natural gas prices."
"Several experts are advancing another explanation, too: Features that have long been viewed as liabilities â the stateâs solitary car culture and traffic-jammed freeways, a dearth of public transportation and sprawling suburban neighborhoods â may have been protective.
âLife in California is much more spread out,â said Eleazar Eskin, chair of the department of computational medicine at the University of California, Los Angeles. âSingle-family homes compared with apartment buildings, work spaces that are less packed and even seating in restaurants that is more spacious.â
Many scientific studies have found a correlation between population density and the spread of flu and other infectious diseases, something that may exist for the coronavirus as well."
"Imagine Verizon, AT&T, and T-Mobile discovered that, no matter how much they expanded their cell-phone networks, people kept buying new smart phones and using those networks. Would they decide to stop expanding their services for fear of turning too many people into smart-phone junkies? Of course not; so long as revenues covered their costs, they would happily expand to meet the demand.
The point is that almost anyone would consider that an investment leading to increased use to be a sign of success. Yet Transportation for America sees it as a sign of failure. Would T4A have us stop building libraries, hospitals, and schools because the ones we build get used by readers, patients, and students?"
Stop the Bagby closure, oil import tariffs, Inner Katy MaX Lanes, virus vs density vs heat, HTX #1 home values, and more
Apologies for the long gap between posts - I wanted to give the 15-year anniversary post extra time as the lead post on the blog. But in the meantime we've accumulated a whole lot of news items to get out, only a few of which related to the coronavirus (maybe a good thing?).
Harris County #3 on the list of worst counties for drunk driving. Half of all auto-fatalities involve a drunk driver! That's your real target for Vision Zero. I think we should start with any DUI conviction requiring passing a breathalyzer test to start their car for a decade+.
{NYC} Mayor de Blasio has scoffed at the âroad dietâ idea that traffic will melt away if fewer lanes are provided. âWe have to be careful,â he told Gothamist recently. âIf we say, âHey, letâs reduce the amount of lanes,â thatâs not a guarantee people get out of their cars; it is a guarantee of traffic jams and other problems.â
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. Iâm 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 Houstonâs affordability is a mirage. If you ever find an argument like this tempting, though, ask yourself: is it more likely that youâre 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.
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.
