Minimum Lot Size Reforms big win for Houston, AI-resistant HTX economy, 'Abundance' and Housing, and Cloud Streets!
Life has been busy and I haven't posted in a while, so the smaller items have gotten backlogged:
Abundance and Housing: Ezra Klein has a new book out called "Abundance," and Evan covered it at Houstonia. The core idea is that we need more of things – housing, clean energy, etc. – and that often means overcoming local opposition and regulatory hurdles. Sounds familiar, right? Houston's approach, particularly on housing, often feels like a practical application of this "abundance" mindset compared to more restrictive cities. Separately, Evan notes the interesting political dynamic where YIMBYism (Yes In My Backyard) focused on housing abundance is finding allies across the traditional political spectrum, driven by the sheer need for more housing.
Minimum Lot Size Reforms: Speaking of housing abundance, the Pew Trusts did an analysis last year highlighting Houston's success with minimum lot size reform. They found it significantly unlocked affordable homeownership opportunities. Key takeaways include that these reforms allowed for thousands of new, more affordable homes closer to job centers without subsidies, providing a market-driven solution to affordability challenges. It's a prime example of how lighter regulations can yield positive results. Some key points:
The reform led to the construction of over 34,000 townhouses from 2007-2020, mostly on commercial, industrial, or multifamily properties.
The resulting townhouses provided more affordable family-sized housing in the urban core compared to other new homes.
The townhouses were larger than the single-family homes they replaced, offering more living space.
The increased housing supply did not lead to displacement of Black and Hispanic residents; instead, Houston saw population growth in these demographics.
An opt-out provision (block votes) helped minimize opposition to the reform but also limited development in some areas.
Houston's experience shows land-use reforms can spur housing, offer affordable options, and limit displacement.
Houston: AI-Resistant, Educated, and Affordable? An interesting academic paper analyzing metropolitan areas based on education levels, exposure to AI disruption, and housing costs puts Houston in a very strong position. According to the analysis (Table 5.1, p.23 of this SSRN paper, also mentioned in the NY Times), Houston stands out. Among large metros with high education, low AI job exposure, and affordable housing, Houston is by far the largest (7.5 million population vs. 1.5 million for the next largest). This suggests Houston may be uniquely positioned for resilience and growth in the coming AI-driven economic shifts.
Cloud Streets! On a final lighter note, Space City Weather was kind enough to post some cool "cloud street" photos I took during some interesting weather patterns. They were pretty cool and like nothing I've seen before.
Redeveloping the old Days Inn downtown, METRO needs to learn from Denver's failures, Texas' boom, and more
A few smaller items this week...
The Chronicle examines what's up with the abandoned shell of the old Days Inn high rise hotel downtown. TL,DR: it's uneconomic to do anything with it, esp. with low ceilings. I’ve hoped to see it redeveloped for a very long time. I always thought the best use was an off-campus student dorm for Rice and UH students, with rail access to both campuses. But I understand what they’re saying about the math not working, especially at these high interest rates, which would need to dramatically come down. Hat tip to Rich.
Next big moonshot for Houston? TX will pass CA and HTX will pass LA, auto vs. transit job access and realism
A few smaller misc items this week:
Texas will surpass California, and both DFW and Houston will pass LA in population over the next 40 years. "The American future seems to be more Lone Star State than a Golden one."
Houston Public Media/NPR asks "What could be the next big moonshot for Houston?" Among the answers, clean energy struck me as the most ambitious and most appropriate for Houston (ideally cost-effective carbon capture!). My own suggestion for a Houston moonshot?METRO could aspire to offer half-hour or less express trip times from every park-and-ride and transit center to every major job center and both airports using a network of MaX Lanes. A high goal but very achievable and it would support Houston's growth for decades to come. More on it here.
New Geography: Auto vs. transit job access ratios for the top 50 metro areas (hat tip to Bill). Essentially comparing how many jobs are accessible by car within 30 mins (the typical commute) vs. by transit. A Houstonian can access 97.3 times (!) as many jobs by car than by transit within the same commute time. Even in NYC with excellent transit a car can still reach 9.7 more jobs than transit in the same time. The conclusion is compelling:
Where for Transit from Here?
With this minimal transit use relative to the auto and especially in view of the huge transit market share losses since the pandemic, it would seem useful to rethink the role of transit.
Transit does well for work trips to the largest downtown niche markets (New York, Chicago, Philadelphia, Boston, Washington, and San Francisco), though pre-pandemic market shares are unlikely to be replicated in the future because of the popularity of hybrid and remote work, lower office occupancy and the likely improvement in virtual meeting technology.
The reality is that transit is not a substitute for the auto and there isn’t enough money to make it one. Professor Jean-Claude Ziv and I found that making the auto a genuine alternative to transit could be prohibitively costly, annually requiring the entire metropolitan area gross domestic product in some cases. This would leave nothing else for anything else.
It would be foolhardy to suggest that transit is an alternative to the auto (despite this having sbeen implied by federal, state, and local policy for decades of decline), In a non-utopian world, no reasonable increase in subsidies could make it so.
It may be best to identify the small areas within metro areas where transit could actually be an alternative to auto. This would be in neighborhoods where automobile ownership is particularly low, which, in most metros are also areas of greater economic need. Investing billions more to coax middle class commuters off the roads seems a daft approach given the realities.
New Zealand learns from Houston, why airport rail doesn't make sense, Tokyo vs HTX High Lines, crazy housing reforms, and more
Some more smaller items this week:
The 2024 Demographia International Housing Affordability reportThe 2024 Demographia International Housing Affordability report is out (Antiplanner discussion here). Houston is surprisingly high at a median price-to-income ratio of 4.4, but still better than other Texas Triangle metros and one of the most affordable growing metros in America (vs. the stagnant ones mainly in the Rust Belt). The more interesting note is that New Zealand's affordability is rapidly improving after adopting supply-side reforms that they learned on a visit to Houston!
Chronicle: Why isn't there a train to Houston's airports? I've made similar points on my blog: it always makes more sense to invest in work transit over airport transit. It's a ridership disaster in DFW. There used to be a fast, frequent nonstop express bus from the downtown transit center to IAH but they shut it down from low demand. ~1-2 riders per bus, which is why even slower multi-billion$ LRT there is a massively bad investment.
"Now count how many times you go to the airport versus how many times you drive or take a bus to the office.
“Even if they use the train for every airport trip they take, that might be eight trips a year,” Spieler said.
Business travelers, some of the most frequent fliers, meanwhile have different considerations.
“They are on expense accounts and not price-sensitive,” Spieler said."
...
Three recent rail projects to airports are illustrative, Spieler said, for how a train's service, location and the layout of the airport make a difference. In Washington, the train to Dulles Airport, which opened in 2022, gets around 2,500 boardings per day, less than half that of the train to Reagan National Airport, which is closer to the metro core but also a smaller airport. In Dallas, fewer than 1,100 riders daily hop on the train to Dallas-Fort Worth International Airport.
Bloomberg CityLab: The Questionable Economics of the 15-Minute City - The goals of this trendy urban planning model are laudable, but cities need to be realistic about their ability to place retail, services and jobs close to all residents. Excerpts:
"The economics of the 15-minute city don’t really work...
What hasn’t been said is that the economics of 15-minute city planning go against foundational principles of how urban markets function....
Employment markets are even less localized. The very raison d’etre of cities is as a vehicle for labor pooling and sharing — this cannot happen effectively at the neighborhood scale. Setting up an expectation where people live within 15 minutes of their place of work will at best result in bad matches between workers and jobs, and at worst no matches."
Arpit Gupta's "Contra Strong Towns" critique focuses on challenging the Strong Towns movement's assertion that suburban growth operates as a "Ponzi scheme." Gupta argues that the evidence does not support the claim that suburban development is inherently financially unsustainable. He emphasizes the need for rigorous accounting and empirical data to substantiate such arguments, which he finds lacking in Strong Towns' narrative. Hat tip to Zoabe.
Antiplanner: "But today’s density policies depress fertility rates and the anti-immigration movement make it more difficult to compensate for those policies. Fortunately, some are getting the message that “maybe we should rethink” YIMBYism."
Twitter: "There's a growing consensus on YIMBY Twitter that we need to build a lot of new high density housing in the biggest cities. Maybe we should rethink that idea." Or go with the Houston free-market model: allow lots of high-density housing in the core for those that want it (typically non-families) as well as plenty of low-density suburban housing for those that prefer that (typically families). Best of both worlds.
The #1 way to revive urban cores, CA attempts the greatest white elephant project in history, Australia's home-building restrictions finally catch up with it, and more
Bill King: Harris County Grew By 1.2% In 2023, But Domestic Migration Continues Slide. The #1 change that could revive urban cores would be school choice vouchers. But in general the far suburbs definitely have a superior value proposition: less expensive newer homes in better school districts with lower taxes and less crime. More of their taxes go directly to services as well instead of public employee pensions and other long-term liabilities built up in the core. That is very hard to compete with.
Chronicle: "The trend of converting old offices and hotels into new spaces is gaining momentum in Houston largely due to the city's lack of zoning laws, which makes it easier for real estate developers to repurpose the land and buildings. The concept of adaptive reuse, which involves repurposing an existing building for a use other than its original purpose, is a contemporary approach to land utilization that has the potential to drastically alter the appearance of Houston in the years to come." (hat tip to Rich)
"Magical thinking caused politicians and the media to back this boondoggle in the first place, and more than 15 years later, incredibly, the spell still hasn't broken."
"The plan admits that the agency expects to spend more on the 171 miles between Merced and Bakersfield than the $33 billion it had projected the entire 463-mile project would cost when voters approved it in 2008. ...
Meanwhile, in light of the pandemic, the agency has modestly reduced its ridership expectations from 35 million trips per year to 27.6 million. This is still more unrealistic than the cost projections. In 2019, Amtrak’s high-speed Acela carried less than 3.6 million riders in a corridor with a higher population than the LA-SF corridor. While California is promising higher speeds than the Acela, the Northeast Corridor has the advantage of really being two corridors anchored by New York, America’s largest city. The California corridor has no similar mid-point metropolis; the Fresno urban area has fewer than 725,000 residents compared with New York’s 19.5 million. Incidentally, to the extent that the 27.6 million turns out to be too high, the supposed savings from not having to expand road and airline capacities dwindles."
California’s state and local government revenues and spending are 60 percent higher than Texas on a per-resident basis.
On economic performance — both have much to celebrate. Population and employment surged in Texas while California’s per-capita income and GDP have soared in recent years.
But both have plenty of room to improve. California stands out for its high rate of homelessness and low air quality. Texas has a larger share of residents without health insurance than any other state.
Crime rates and renewable energy production are similar in the two states despite very different policies. And while K-12 spending per student is much higher in California, student outcomes are if anything better in Texas. (point that out next time someone says the solution to Texas' education issues is more money)
“This finding runs counter to the narrative that people are behaving irrationally by owning a car because they underestimate the true cost. Instead, we find that people value owning the car high enough to make the private cost worthwhile. Indeed, 58% of this value is in owning the car, compared with 42% in using it, suggesting that the value of the car goes well beyond the trips that it provides.”
This paper sheds some useful light on the failure of decades-long efforts to “get people out of their cars and onto transit” and more recent attempts to greatly increase urban density in the quest for a “15-minute city.”
Three big Wall Street banks began new Dallas campuses in 2023
Post-pandemic relocations have been a boon for Texas city
"Now the country’s fourth-largest metro, Dallas-Fort Worth surpassed Chicago and Los Angeles during the pandemic to become the No. 2 city for finance jobs. It’s home to more than 380,000 who work in the industry, according to data from the Bureau of Labor Statistics. That compares with 323,000 in Chicago, the home of CME Group Inc., Cboe and other derivatives firms that form the backbone of that city’s finance industry. New York is still No. 1, with 809,000 people employed in that sector."
"Demographer Wendell Cox’s recent estimates of U.S. housing affordability found unaffordable housing in Dallas, Houston, and other Texas cities that have historically been quite affordable. In a post about housing issues, I noted that Cox’s home price data were based on real estate transactions while the Census Bureau numbers are based on a cross-section of all homes in a region.
Before the pandemic, median real estate transaction prices were only 2 or 3 percent higher than Census Bureau values, indicating that people buying homes represented a good cross-section of America. In 2021, median real estate sale prices were at least 20 percent higher than Census Bureau values. As the recent real estate boom is driven by people who have discovered they can work remotely, which means people of above-average incomes, price-to-income ratios based on real estate transactions overestimate the true value-to-income ratios.
The 2022 data from the Census Bureau confirm this. The data show that the value-to-income ratio was 3.9 for the city of Houston and 3.2 for the Houston urban area. These are a lot lower than the 4.7 in Cox’s paper."
"Houston has the title of second most popular headquarters city for Fortune 500 firms... with 22 of them headquartered in the city...
What makes Texas, or Houston for that matter, so appealing for corporations? Mostly the low cost of living and lack of taxes on businesses. Even Exxon has tightened its belt in the inflationary age, though, shedding its “God Pod” and consolidating its upper management’s formerly exclusive luxury suite into its preexisting Houston campus."
Chronicle: Houston poverty rates the highest among major U.S. metros, new Census data shows. Flip the perspective on this story: So restrict housing -> drive up costs and drive out opportunity-seeking low-income households -> median incomes go up = city wins??? 🤔😠 This is exactly what so many cities do, playing a game of hot potato with low-income households, but not Houston, which should be proud of attracting opportunity seekers rather than embarrassed.
"faster cities are faster because they have more roads and are lower in density (which they describe as have a “larger land area”); and that those roads produce benefits by allowing faster top speeds more than by reducing congestion...The authors conclude that cities that want to increase speeds (and, by stated implication, worker incomes) should build more roads. While it admits that won’t be possible in Bangladesh, it should be possible in most cities and countries. Even if, as the anti-road people argue, building more roads simply leads to more driving, building roads that are faster leads to higher overall speeds which should produce enormous economic benefits."
The southern city welcomes the middle class; heavily regulated and expensive Gotham drives it away.
New Yorkers are rightly proud of their city’s renaissance over the last two decades, but when it comes to growth, Gotham pales beside Houston. Between 2000 and 2007, the New York region grew by just 2.7 percent, while greater Houston—the country’s sixth-largest metropolitan area—grew by 19.4 percent, expanding from 4.7 to 5.6 million people. To East Coast urbanites, Houston’s appeal must be mysterious: the city isn’t all that economically productive—earnings per employee in Manhattan are almost double those in Houston—and its climate is unpleasant, with stultifying humidity and more days with temperatures exceeding 90 degrees than in any other large American city. So if those two major factors in urban growth don’t explain Houston’s success, what does?
Houston’s great advantage, it turns out, is its ability to provide affordable living for middle-income Americans, something that is increasingly hard to achieve in the Big Apple...
Housing prices are the most important part of Houston’s recipe for middle-class affordability...
To understand what kind of houses these are, go house-hunting on the Web. In Houston, you’ll find a lot of nice places listing for $175,000, and they’ll probably sell for about 10 percent less, or $160,000. These are relatively new houses, often with four or more bedrooms. Some have over 3,000 square feet of living space, swimming pools, and plenty of mahogany and leaded glass. Almost all seem to be in pleasant neighborhoods—a few are even in gated communities. The lots tend to be modest, about one-fifth of an acre, but that still leaves plenty of room for the kids to play...
You thus get much more house in Houston and pay a lot less for it. This chasm would be just as big if you compared Houston with Los Angeles, where the average house price is a whopping $613,000. Small wonder Houston looks so good to middle-class Americans.
It looks even better once you take taxes into account...
Just as with housing, however, there’s a significant difference in the quality of transportation in Houston and New York. In Houston, the middle-class breadwinner likely will drive an air-conditioned car from an air-conditioned home to an air-conditioned workplace, and take 27.4 minutes to do it, on average. Commuting via New York public transit is more complicated. If you live in Queens, the average commute to midtown Manhattan (if that’s where you work, as we’ll say) is 42 minutes, and longer if you’re coming from Far Rockaway. From Staten Island, the average commute is 44 minutes—and often something of a triathlon, with bus, ferry, and subway stages. Our middle-class New York commuter thus spends at least 120 more hours in transit per year than does his Houston counterpart. And except perhaps for the ones spent on the ferry, none of those hours is as agreeable as sitting in an air-conditioned car listening to the radio...
After housing, taxes, and transportation, the New Yorkers have $26,000 left. The Houston family has $30,500, and those dollars go a lot further than they would in New York...The Houston family is effectively 53 percent richer and solidly in the middle class, with plenty of money for going out to dinner at Applebee’s (??? what Houstonian does this?!🙄) or taking vacations to San Antonio. The family on Staten Island or in Queens is straining constantly to make ends meet.
Don’t forget education. Ordinary public schools would be comparable in Houston and on Staten Island, with average SAT scores of about 950. The Houston family, though, has the option of moving to a slightly more expensive school district, like Spring Branch, which has an average SAT score of 1070, better than that in many New York suburbs...
True, New York boasts fantastic cultural advantages, hip downtown neighborhoods, and pleasures you can enjoy even if you don’t have much cash in your pocket—museums, parks, architecture. But the fact remains that living in Houston on $60,000 a year means a high-quality, spacious home, an air-conditioned commute, low local taxes, education options, and a decent amount of spending money left over. Living in New York City on $70,000 a year means a smaller, older home, a long and arduous commute, higher local taxes, fewer educational alternatives, and scrimping every day. For many middle-class families, at least those with kids, the amenities will be no substitute for a more comfortable life. In a sense, the real surprise isn’t that so many middle-income families are putting down roots in Houston (and in other fast-growing cities with similar characteristics, such as Atlanta and Phoenix); it’s that any of them remain in New York...
And the unavoidable fact is that New York makes it harder to build housing than Chicago does—and a lot harder than Houston does. The permitting process in Manhattan is an arduous, unpredictable, multiyear odyssey involving a dizzying array of regulations, environmental and otherwise, and a host of agencies. Then developers must deal with neighborhood activists and historical preservationists. Any effort to build in one of New York’s more attractive, older communities would almost certainly face strong opposition from the Landmarks Preservation Commission.
A further obstacle: rent control. When other municipalities dropped rent control after World War II, New York clung to it, despite the fact that artificially reduced rents discourage people from building new housing. As New York owners converted rental units into coops to escape the price controls, the city then turned to public housing to solve the problem of housing the poor. The city’s strange policy remains to try to increase the (modest) number of subsidized apartments rather than opening the market to more development, which would significantly increase the overall supply of housing at all price levels.
Houston, by contrast, has always been gung ho about development...
Indeed, the city is unique in America in not having a zoning code. Many deeds include land-use restrictions of various kinds, true, but these are voluntarily chosen by developers, not decided on high by government bureaucrats. Occasionally, groups rally to try to institute zoning regulations, but the growth machine invariably beats them back, often supported by some of the poorest people in the city. Houston’s builders have managed—better than in any other American city—to make the case to the public that restrictions on development will make the city less affordable to the less successful...
But Houston’s success shows that a relatively deregulated free-market city, with a powerful urban growth machine, can do a much better job of taking care of middle-income Americans than the more “progressive” big governments of the Northeast and the West Coast.
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.
Problem, we have a Houston - Houstonians got a free $18k from min lot size reform, METRO 2nd worst for rail crime, The Economist loves Texas, HTX tops std of living, Houston sliding towards zoning? and more
Lots of good smaller items again this week:
Resources for Reformers: Houston’s minimum lot sizes - Problem, we have a Houston (clever twist!) "The lot size reform was equivalent to a one-time gift of $18,000 to every Houston household living in a single-family home. That adds up to about $8 billion."
The Economist: Why America is going to look more like Texas (archive link) - Lessons from the surge of the Lone Star State (followed by the more in-depth article "Texas’s latest boom is its biggest yet" - archive link). Key takeaways: Texas gets 1/3 of all net new US jobs(!), +500k people/year, #1 most Fortune 500 HQs, will pass CA for the #1 state in the 2040s, largest budget surplus ever at $33B (larger than the total budgets of 24 states) without needing an income tax to do it.
"Most of the nation’s major cities face a daunting future as middle-class taxpayers join an exodus to the suburbs, opting to work remotely as they exit downtowns marred by empty offices, vacant retail space and a deteriorating tax base."
"Firms like to open factories and offices in cities with plenty of skilled workers. When choosing between cities, they typically run an analysis to see how many potential employees live within a reasonable commute of a site. Poor traffic shrinks the radius, and by extension the labor pool, hurting a city’s chances of attracting companies."
Warren Buffet calls bs on rail, remote work permanence, induced demand idiocy, HTX tech + construction + port growth, Ike Dike, and more
Happy new year everyone! Hope you all had a good holiday season and didn't get caught up in the Southwest airlines chaos. Sadly, I accidentally wiped out all my backlog of post topics and blogspot does not have any recovery functionality (why can't it keep history like Google Docs?!). So I'm combing back through my tweets to try to find at least some of them:
Richard Florida: “When I started with the creative class, places didn’t care about young people, they were only trying to attract a family with children to the lovely suburbs, and I’m saying, ‘No, no, no, no, no,’” Mr. Florida said in an interview. “Twenty years later, people forgot about the families. And now here’s a whole generation leaving cities again, for metropolitan or virtual suburbs.” ...
"A few feet away from her, another group of young workers was playing Jenga. One by one, they took blocks away from the structure, making way for the inevitable collapse."
NYT idiotically parrots the induced demand argument, including mentioning I10 and I45. Which type of infrastructure should government invest in: transit nobody will use, or lanes everybody will use? 🤔 Induced demand is a false argument. Nobody says "don't build a new airport runway - it will just fill up with new flights" 🙄
AP: Warren Buffett jumps into local politics to fight streetcar: "Billionaire investor Warren Buffett broke with his practice of staying out of local politics to urge his hometown of Omaha to abandon its planned streetcar project because he says it's too expensive and not as flexible as buses."
WSJ: The Blue State Exodus Continues: "Texas and Florida make up about 15% of the U.S. population but accounted for 70% of its population growth this past year. "
Houston ranks as the top market for tech job growth: “Although sometimes overshadowed by the cachet of Dallas, Austin, & San Antonio, Houston is absolutely a tech hub in its own right, attracting a mix of major tech companies & VC-backed startups + established base of aerospace, defense, & energy companies”
WSJ: California Long Ruled U.S. Shipping. Importers Are Drifting East. - Companies that depended on the West Coast as a point of entry for their goods are turning to other parts of the country as global trade gets upended. A chart inside shows Houston #1 in the country for port growth in containers. Looks like the port expansion is paying off!
"Bloom provided data showing strong economic incentives for both corporations and their employees to continue the work-from-home revolution if their jobs allow it:
First, “Saved commute time working from home averages about 70 minutes a day, of which about 40 percent (30 minutes) goes into extra work.” Second, “Research finds hybrid working from home increases average productivity around 5 percent and this is growing.” And third, “Employees also really value hybrid working from home, at about the same as an 8 percent pay increase on average.”
Why Houston is better with TIRZs, our lack of zoning held up as a model for the country, 45N expansion gets support, professionals migrating to TX, and more
Before getting to some smaller items, I want to comment on the Chronicle's investigative report on TIRZs (tax-increment reinvestment zones). While I'll admit they can be a bit of a mess and even a bit wasteful, what the reporters miss is that if the TIRZs were dissolved and the money sent to the City instead, it would just get gobbled up by the public employee unions long before it can do any good in any lower-income neighborhoods outside the TIRZs. As the pieces note, every mayor comes into office thinking they will go after the TIRZs, then realize they can make them work for the city as a whole by delegating projects to them (like improvements to Buffalo Bayou and Memorial parks), and shift City budget money to those neighborhoods outside the TIRZs. Finally, I think Houston's core (and the City as a whole) would be in a much more precarious position if it wasn't for the TIRZs making strong investments in Uptown, Downtown, Midtown, the Med Center, and other key districts to keep them attractive to employers and high-income professionals.
Moving on to a backlog of smaller items, mostly from my Twitter feed:
You may find it hard to believe, but Houston has the shortest CBD commuting times of the major metros due to a high-capacity freeway and HOV lane network with great coverage (Chart 5, page 7).
Video: "Of all the Texas cities - most of which I'm very bullish on - the one that is probably going to have the biggest success story for the next 30 years is by far Houston." Hat tip to George.
The City Without Zoning: "For the most part, Houston’s positives are linked to its lack of zoning, and its negatives are essentially unrelated to zoning."
The Search for Intelligent Life Is About to Get a Lot More Interesting: "In 2018, Frank attended a meeting in Houston whose focus was technosignatures... seek out signs of technology on distant worlds, like atmospheric pollution... “That meeting in Houston was the dawn of the new era, at least as I saw it,” Frank recalls."
Public comment submitted on raising I10 at White Oak Bayou: this project seems unnecessarily disruptive and expensive to keep the freeway open a relatively tiny handful of days every few years, especially given that 610 provides a natural alternative when I10 is blocked by flooding. Additionally, when the city is flooding badly enough to put I10 underwater, most households and businesses are hunkered down anyway, reducing demand. There are better places to deploy TXDoT's limited resources.
"The planned rebuild of I45 in Houston drew the largest number of comments, 382 of the 1,685 TxDOT received through a month-long public comment period. Of those, TxDOT said 299 were supportive of the project while 66 were opposed." (source)
"Houston prioritizes the ease and cost of building housing above almost all else. As a result, residents with money have a higher standard of living and those without have more humane sheltering options. Cities with other priorities sacrifice on both of these." -John Arnold
The American Conservative: How Zoning Paralyzed American Cities: "America should learn from no-zoning Houston, says Gray...What proved crucial to rejecting zoning was Houston’s allowance of deed restrictions, whereby neighbors can voluntarily opt into zoning-like restrictions and design standards...And while neighbors get a say over their neighborhood, Houston as a whole is still allowed to grow. It builds housing at 14 times the rate of its peers and, in the process, has become one of the most affordable and diverse cities in the country.""
"Is Nolan Gray really calling for zoning abolition? Yes, he is. And before you dismiss him—perhaps Houston isn’t your cup of tea, or maybe you simply like your home and its zoning, thank you very much—consider that Houstonians agreed with Nolan’s view in 1948, 1962, and 1993, killing zoning each time it came up for a vote, largely thanks to working-class voters. What proved crucial to rejecting zoning was Houston’s allowance of deed restrictions, whereby neighbors can voluntarily opt into zoning-like restrictions and design standards to ensure whatever character of their community they desire for the next 25 to 30 years. And while neighbors get a say over their neighborhood, Houston as a whole is still allowed to grow. It builds housing at 14 times the rate of its peers and, in the process, has become one of the most affordable and diverse cities in the country."
2045 RTP survey, #1 permitting, POST HTX diversity, housing costs hurt education, planning tool vs NIMBYs and their mentality
Took my visiting cousin to POST Houston Saturday night and it had the most Houston diversity I've seen in one place in 40 years here, both in food and people. Just incredible. These photos don't do it justice. Every ethnicity in the city was represented! Very cool place worth visiting if you're ever near downtown.
“Enrico Moretti (2013) estimates that 25% of the increase in the college wage premium between 1980 and 2000 was absorbed by higher housing costs. Moreover, since the big increases in housing costs have come after 2000, it’s very likely that an even larger share of the college wage premium today is being eaten by housing. High housing costs don’t simply redistribute wealth from workers to landowners. High housing costs reduce the return to education, reducing the incentive to invest in education. Thus higher housing costs have reduced human capital and the number of skilled workers with potentially significant effects on growth.”
Very cool tool that I'm also very glad Houston doesn't need because we don't need the public's approval over what gets built where: Fast Company - This ingenious tool helps cities avoid rabid NIMBY arguments over housing - Balancing Act helps calm the contentious process of deciding where housing should get built.
NYT: Twilight of the NIMBY - Suburban homeowners like Susan Kirsch are often blamed for worsening the nation’s housing crisis. That doesn’t mean she’s giving up her two-decade fight against 20 condos.
"How does a place (CA) that prides itself on progressive politics have so many policies that exacerbate inequality? How do homeowners whose window signs say they welcome every oppressed group rationalize a housing system that has caused their own children to flee?"
Market Urbanism Report: "Our latest data dive shows a clear correlation between permit rates fm 2004-2021, and current median home prices, in America's 20 "superstar" metros. Houston remains America's best metro for combining strong population/job growth with low prices. It's also had the most net permits (945,068) over this period. Not a coincidence." Hear hear! Click to enlarge the graph:
Finally, be sure you fill out the H-GAC 2045 Regional Transportation Plan survey before the end of June. They also have a Comment Map where you can add comments to very specific locations. Here was my public comment submission after attending their virtual public meeting:
"Very excited about the REAL network of managed/MaX Lanes! By far the most effective, cost-efficient, flexible, adaptable (to autonomous vehicle technology), and realistic transportation solution for a metro like Houston. Bike lanes and transit are nice amenities but will never be able to address more than a tiny slice of trips in Houston. Houston's future vibrancy and economic success is absolutely critically tied to expanding convenient, fast transportation used by the vast majority of people (cars), and if we ignore that and pretend we don't need to make any more traditional transportation expansions to accommodate growth (like freeways) we will stagnate into gridlock like LA, which has invested tens of billions into transit expansion while overall ridership *dropped*."
“ A paper published this week by two California economists calculated that the mass shift to remote work accounted for 15.1 percentage points of the 24% increase in U.S. home prices between November 2019 and 2021.”
“There are lots of places in America with jobs and lower climate risks or jobs and racial diversity, but if you want all three, Texas will take care of you best,” The NYTimes noted in 2021.
“Many of us move to big cities and spend little time in nature — also not a path to happiness. A study by the economists Ed Glaeser and Josh Gottlieb ranked the happiness of every American metropolitan area. They found that New York City was just about the least happy. Boston, Los Angeles and San Francisco also scored low. The happiest places include Flagstaff, Ariz.; Naples, Fla., and pretty much all of Hawaii. And when people move out of unhappy cities to happy places, they report increased happiness.”
And a little humor, lol: "The data-driven answer to life is as follows: Be with your love, on an 80-degree and sunny day, overlooking a beautiful body of water, having sex."
And here are the academic paper details behind that excerpt: Unhappy Cities. People are the least happy in some of America's largest cities like NYC, LA, SF, Boston, and Chicago. Oddly, Dallas and Houston are not included, although Galveston scores surprisingly high (#16).
"Abstract: There are persistent differences in self-reported subjective well-being across U.S. metropolitan areas, and residents of declining cities appear less happy than other Americans. Newer residents of these cities appear to be as unhappy as longer term residents, and yet some people continue to move to these areas. While the historical data on happiness are limited, the available facts suggest that cities that are now declining were also unhappy in their more prosperous past. One interpretation of these facts is that individuals do not aim to maximize self-reported well-being, or happiness, as measured in surveys, and they willingly endure less happiness in exchange for higher incomes or lower housing costs. In this view, subjective well-being is better viewed as one of many arguments of the utility function, rather than the utility function itself, and individuals make trade-offs among competing objectives, including but not limited to happiness."
Houston's mini-kaihatsu, sinking false alarm, annexation history, shrinking population, school choice, and more
Several smaller items this week:
Report: Houston is one of the fastest sinking cities on Earth, could 'disappear'. Let's check the math folks. Houston elevation is 79' = 2408cm. Losing 2cm/year x 100 years = -200cm. Sea level rise of 1cm every 5 years for 100y = 20cm. New elevation in 2122 = 2188cm, almost 72ft! Doesn't sound anywhere close to 'disappearing'...
Big NYT fail on road safety: the clear inflection point in the graph is the rise of distracting smartphones, yet they're NOT EVEN MENTIONED ONCE. Instead it's anti-car, anti-SUV, anti-speed, and anti-rideshare. All agenda instead of real problem-solving.
Kinder: Houston, Dallas led metro area growth in 2021 even as their urban cores lost population (news story, hat tip to Oscar). Harris County declining a bit even while the metro grows. I think a lot of people used the pandemic to move out to the nicer newer suburbs (commutes less of a worry in a remote work world), and the backfill immigration into the city wasn’t there as it usually is, especially from international immigrants. Crime spike hasn't helped either. Harris County really has to turn it around before we end up in the same place as Dallas County with significant outflows. Once people and employers flee, it’s a negative reinforcing cycle :-(
Book Review: The Making of Urban Japan, by Salim Furth. The review notes similarities between Tokyo's mini-kaihatsu (a dozen townhomes fronting a small alley) and similar developments in Houston:
Mini-kaihatsu, Houston
"The concept is the same, and it’s no coincidence that both arise in places with light regulation, strong demand, and little public streets funding. As I wrote about Houston:
Houstonians achieve privacy by orienting many new townhouses onto a share courtyard-driveway, sometimes gated, which creates an intermediate space between the private home and the public street…
The courtyard-driveways also provide a shared play space, as evidenced by frequent basketball hoops. Despite what Jane Jacobs may have told you, city streets are not viable play spaces for 21st-century children. But cul-de-sacs can be. Houston’s courtyard-and-grid model may be the ideal blend, unlocking the connectivity of a city while delivering the secure sociability of a cul-de-sac to a large share of homes."
Houston #1 for std of living, housing the root of many problems, solving homelessness, debunking the 15-min city, and more
Our featured item this week is this detailed Stanford study that backs up what I've been saying for years: Houston offers the highest standard of living in the country (discretionary income after costs), especially among growing cities. After opening the pdf, search the word 'Houston' and look at the Consumption column to see how much higher it is than most other cities for households in different income ranges. Hat tip to George.
"The struggle to solve homelessness is getting harder nearly everywhere. Yet recent years have still seen many more victories than defeats. And the biggest victory is in greater Houston, which over the last decade has cut homelessness by more than half.
Houston’s story holds lessons for Los Angeles. The chief one is that solving homelessness is less about economics than about strategic clarity and execution."
Alain Bertaud, formerly principal urban planner at the World Bank and now senior research scholar at New York University's Marron Institute of Urban Management as well as the author of 'Order Without Design: How Markets Shape Cities', critiques the current urban planning fad, "the 15-minute city." Introduction and policy analysis paper.
'Even a prominent urban economist like professor Ed Glaeser has been sufficiently alarmed by the spread of the 15-minute mania that he felt obliged to comment on it. In a blog, he wrote that the 15-minutes city "should be recognized as a dead-end which would stop cities from fulfilling their true role as engines of opportunity."
NYT: Amid a Baby Boom, Texas Gains 1,000 Residents Every Day - A surge in births in Texas comes amid a declining birthrate nationwide. Fits my hypothesis: when housing is plentiful and affordable, fertility stays up. People want plenty of space to raise families. When housing is pricey and small, fertility drops - see Japan, Korea, China, Europe...
The housing theory of everything - Western housing shortages do not just prevent many from ever affording their own home. They also drive inequality, climate change, low productivity growth, obesity, and even falling fertility rates. A really long but comprehensive case. Conclusion:
"What matters is that housing shortages may be the biggest problem facing our era, and solving it needs to become everyone’s highest priority....
If we’re right about this, it means that fixing this one problem could make everyone’s lives much better than almost anyone realises – not just by making houses cheaper, but giving people better jobs, a better quality of life, more cohesive communities, bigger families and healthier lives. It could even give renewed reasons to be optimistic about the future of the West."
Finally, a fun item to conclude with: a cool map a friend of mine made with how to fly from Houston to every capital city in the world either nonstop (red) or connections (blue). Almost all can be reached with a single connection except for a few in the South Pacific (thru LAX+Fiji). We are a very well-connected city in the global economy. Click on it to see it larger.
"The urban form has shifted throughout history. This has been critical to its success. Today we are on the cusp of another transition, ushered in by new technologies and changing demographics, and accelerated by a devastating pandemic. Although these forces affect all geographies, the best chance of success and growth lies in what we define as The Next American City.
This newly released report from Urban Reform Institute examines the places that offer opportunity for a revitalized American Dream for more citizens.
The Next American City offers an answer to the problem plaguing those living in and around major cities. Offering a combination of affordability, amenities, and proximity to the large cities, but without the burdensome, heavy-handed regulations of local government or many of the social ills running rampant in our cities, these places – like The Woodlands and Bridgeland – are quickly shaping up to be the urban destinations of the future."
“The Urban Reform Institute, which advocates for market-oriented city planning, recently argued that the new models for American city living are developer-designed suburb and exurb communities such as The Woodlands, Bridgeland and Cinco Ranch, and there are a lot of reasons to suggest they are right. Development ever outward will almost certainly continue, particularly in Houston where there are no constraints and plenty of land.
Adding to the expectation for further suburban expansion are the evolving norms around remote/hybrid work, meaning long commutes will be less of a drawback for some workers. Looking even further forward, technologies such as autonomous vehicles could actually encourage more sprawl, which researchers are beginning to anticipate.
The pandemic certainly accelerated this trend. Based on our estimates from USPS data, tens of thousands more Houstonians left the city than moved here in 2020, and most of the move-outs stayed in the metro area, opting to live in one of the suburbs instead.”
Houston No. 1 in U.S. for home sales in master-planned communities, says survey: "According to a survey by real estate consulting firm RCLCO, 20% of the country’s 50 top-selling master-planned communities last year are in the Houston metro area. In that category, Houston ranks first among all of the metro areas represented on the list"
Great analysis from Kinder on Houston ADUs. Reducing barriers to more is great, but they will always have a hard time competing with the amenities and scale of Houston's super-competitive apartment market.
Bloomberg: The Global Housing Market Is Broken, and It’s Dividing Entire Countries - The dream of owning a home is increasingly out of reach. Democratic and authoritarian governments alike are struggling with the consequences. I've been arguing this for a long time: government housing constraints are popular with voters in the short-term, but come back to haunt cities long-term, which is why Houston's lack of zoning and open housing market is so important and is a critical long-term competitive advantage.
Niche 2021 Best Cities to Live in America. The Woodlands ranked the #1 Best City to Live in America. Houston gets an A-, not bad for a major metro, pulled down by crime. Hat tip to George.
"Seven decades later, I'm amazed to hear that some still think of Houston as part of "flyover country" when it has become one of the world's great art cities. What would it take to wake people up to all that diverse, sophisticated Houston has to offer?"
“Messrs. Glaeser and Cutler see nothing less than “the rapid-fire deurbanization of our world.”
“Uncontrolled pandemic,” the authors write, poses “an existential threat” to the urban world. Nor is the coronavirus the only problem that cities face. “A Pandora’s Box of urban woes has emerged,” they continue, “including overly expensive housing, violent conflict over gentrification, persistently low levels of upward mobility, and outrage over brutal and racially targeted policing and long prison sentences for minor drug crimes.” These are not disparate problems. Rather, they “all stem from a common root: our cities protect insiders and leave outsiders to suffer.”
In Messrs. Glaeser and Cutler’s view, something has gone deeply wrong with how policy is set in many American cities. Insiders have captured control of how cities operate—and used that control to enrich themselves while providing limited opportunities for newer, younger residents."
I think Houston is better than most cities on these problems, but I'd be curious to hear what you think in the comments...
"Silicon Valley is a perfect example of the long-term problem. According to the Bureau of Economic Analysis, four counties in northern California—Marin, San Francisco, San Mateo and Santa Clara—have per capita incomes over $100,000. Given that extraordinary prosperity, you might think that people would be flooding into the region, as they did after gold was discovered at Sutter’s Mill in 1848. Yet they are not. Taken together, those counties’ population grew by only 6.5% between 2010 and 2020, below the average growth rate for large counties. For comparison, Harris County, Texas, where Houston is located, has 35% less land than the four California counties, but in the 2010s its population grew 175% faster.
The reason for this is not hard to find. House prices in Silicon Valley make living there prohibitive for all but the very wealthy. Data from the National Association of Realtors show that in the second quarter of 2021, the median sales price for a new home was $1.7 million in San Jose and $1.4 million in San Francisco. In Houston, the median sales price was $307,000. Given the ease of building in greater Houston, house prices there may actually decline once we get through the pandemic. There is little chance that prices will fall in Silicon Valley.
Harris County is growing so rapidly because it is a place where housing and entrepreneurship are still largely unfettered. In contrast, coastal California is the capital of insider privilege. In 1982, the economist Mancur Olson published “The Rise and Decline of Nations,” in which he argued that in every society, cliques and special interest groups pass laws that limit competition and prevent change."
Political guide for moving to Texas (America's Future), Houston no-zoning video, TX HSR re-route? population growth and building permits, airport wins
Continuing from last week on catch-up items...
From Twitter: My oversimplified political guide for moving to Texas: progressives to Austin, conservatives to DFW, and pragmatic centrists and independents to Houston.
"But if you’re really looking for a bellwether state that offers a glimpse into the country’s economic future and engines of growth as well as its political fault lines in the long run, it’s not California. It’s Texas."
"For every new white resident that Texas welcomed over the past decade, there have been three Black residents, three Asians, three people with multiracial backgrounds and 11 Hispanics. Dallas-Fort Worth, Austin and Houston also have large L.G.B.T.Q. populations."
City Beautiful covers the details of Houston's lack of zoning in this 10 min video. Mostly pretty good, but I think he misses some of the densification and affordability benefits. He talks about affordability, but only on a metro level, ignoring how we're able to increase access and affordability for the most desirable core neighborhoods through new townhomes, apartments, and residential towers.
Passing this great graph along from Scott Beyer at the Market Urbanism Report: "A decade after the recession, and peak permits are still down in almost every major metro except in one state. Any mystery why this state remains affordable even as millions of people move there?" I'm impressed to see we're holding steady vs. our crazy-high peak building during a previous oil boom.
"Data from the 2020 Census released August 12 shows Houston at No. 5 (20.3 percent) among the country's 50 largest metro areas in the biggest jump in population from 2010 to 2020.
Houston maintains its position at No. 5 (7,122,240 residents), the Census data notes. For some perspective, Houston was No. 8 (4,944,332) in the 2010 Census.
The Bayou City is also one of the three U.S. metro areas to gain at least 1.2 million residents over the decade. (Dallas-Fort Worth and New York are the others.)"
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.
