Whitmire = Bob Lanier, Vision Zero doesn't work, people prefer sprawl over walkability, and more
Clearing more from the smaller items backlog this week:
This Texas Observer piece on Houston's northside is so scattershot and random and socialist/left-wing biased it's hard to know where to start. Houston is bad because... it has gentrification, inequality, racial tensions, and suburbanization/sprawl like every other city in America?? Because it has the most affordable housing among the nation's major metros, but not affordable enough for the very poorest populations??
At the end, he calls for communities to control their own fate vs. developers, but isn't that what every other over-zoned and over-regulated city in the country has done resulting in a massive national housing affordability crisis?? The fact is that we called it right when we said Houston had the right formula for housing supply and affordability, and the rest of country is finally catching up to that. This incoherent, woke, down-with-capitalism/free-markets rant adds nothing helpful to the conversation.
While walkable neighborhoods like Clarendon offer convenience, they can be expensive and lack living space compared to suburban "sprawl."
Despite the benefits of walkable neighborhoods, surveys show that many Americans prefer the spaciousness of suburban sprawl, especially older, less-educated, and Republican-leaning individuals.
'This seems to be the basic pattern of vision zero plans across the country: impose a bunch of auto-hostile policies, ignore the fact that they don’t work, and then blame others when fatalities rise. As Lewis & Clark law professor Jack Bogdanski says, “the bureaucrats are great at spending money to make life miserable for people who drive cars, but they don’t bother to see if any of their spending actually makes any difference in improving traffic safety.”'
I got quoted! 'In many ways Whitmire is, in the words of longtime Houston blogger Tory Gattis, “the second incarnation of Bob Lanier: focused on running a good city, not caught up in the urbanist dogma"...Apparently, Bayou City voters aren’t chomping at the bit to see their city become the next Portland.” From "These Mayors Understand How to Run a City" in the City Journal.
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."
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 It’s Too Late - The city knows about disasters. It’s got a world-renowned medical center. It saw what happened in New York. And it still couldn’t 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 we’re as ready as we ever were. It’s as Hidalgo says: “We’re right on the edge of disaster. It’s almost become our way of business.”
“But a number of civic and business leaders say New York’s reliance on mass transit—and concerns that the new coronavirus could spread through subways, buses or regional trains—has kept many people working from home. Cities that have more driving commuters have seen a higher percentage of workers return.”
“New Yorkers’ slow return to the workplace is the latest blow to the nation’s 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.”
“But 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.”
And here’s the top rated comment:
“Let'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. “
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 “nutritional inequality”: why the wealthy tend to eat more healthfully than the poor in the U.S. Using event study designs exploiting supermarket entry and households’ 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."
Misleading poverty stats, what $250k buys you, density and transit vs. Covid, great HTX murals
A new piece is out examining Houston's increase in high-poverty neighborhoods (Chronicle coverage here - hat tip to Charles). This kind of analysis has always rubbed me the wrong way, because it rewards cities that tighten housing supply and force gentrification and displacement – pushing people out so their “high-poverty neighborhoods” decline. It's a game of hot potato with low-income populations. I like that Houston allows plenty of new supply (almost always at the higher end) so older housing can become affordable (like the “newly poor” and “deepening poverty” neighborhoods in their analysis) - with the prime example being middle-class apartments built during the 70s oil boom that are affordable immigrant housing today – that’s great! Houston always allows even the poorest to come here seeking opportunity rather than blocking them out thru restrictive housing policy.
And their point about rich neighborhoods being next to poor ones is also great! That means there is affordable housing near the jobs (esp. service jobs). Every major job center in Houston has affordable neighborhoods within a 15-minute transit ride. A lot of cities can’t say that. I would say it’s a better model than Dallas, where poverty is concentrated on the south side while wealth is concentrated on the north side, so the south side has very limited access to opportunity.
What this report labels “turned around” neighborhoods would be labeled as “gentrified” in a lot of other reports, and while I’m glad Houston has had a few turnarounds, I’m also glad we don’t have too many because I think that would be an unhealthy sign of too much gentrification because of lack of housing supply in the neighborhoods people want to move to.
What we need is not geographic analysis, but generational cohorts analysis over time: do poor families that move to Houston do better in the 2nd and 3rd generations? I think they do, but data is hard to come by.
"I love the ugliness of Houston, but I know that’s far from all this city is. I can’t wait to get to know the community that has already felt welcoming and warm and to experience the food, music, museums, parks and more. Houston is far, far more than its outward appearance.
Until then, I’ll appreciate the comforting ugliness and continue my mission of trying all the take-out I can. Houston already has the best food in Texas, hands down."
"In Houston, African Americans enjoy high political representation, homeownership, historically black universities and several black newspapers – all of which empower the community, Conyers said.
“If people can negotiate and communicate, they don’t need protests,” he said.
Stein agreed that leadership in Houston has played an important role – and not just in city government.
“The black leadership in these communities tends to be church-centric, very much built into the churches. That’s not what you see in the North and Northeast,” he said. “And the second is, it’s an older population… and to a large extent, these are people who followed Dr. King’s nonviolence.”
Stein also credits less racial segregation than in other cities and its low density as factors that help keep Houston relatively peaceful in times of social unrest."
Great piece in Texas Monthly by Evan Minz on the new Houston book from Rice's Stephen Klineberg. I get that education is critical to Houston's future, but who's the right model for us to follow? Who's doing it right? I have trouble finding good examples, even in the much higher spending blue states. California spends much more per student than Texas but with worse results. The most success I've seen is the big charter operators - maybe we just need to let them expand even faster? That, plus more pre-K funding. The comments are also really good on this one. A favorite:
"The article is right, Houston isn't about the city, it's about the people. What most people outside of Houston don't understand is what that means. Houston is an attitude, a drive, a motive. Houston thinks forward, never back. The most generous, open people you will ever meet. Houston is not a destination, it's a journey."
WSJ: The Coming Urban Exodus - Failing progressive governance is making daily life too chaotic and stressful in many U.S. cities. A warning for Houston, where we're already seeing population shifting out of the city and county.
Scott Beyer, Market Urbanist: Three Ways the Government Blocks Urban Density - Limits on height, floor-area ratio, and dwelling units per acre have tremendous societal costs. Luckily Houston has very few of these. Excerpt:
"All these rules and more strip creativity and artistic flair from the city development process. Ultimately they raise rents preventing our cities from densifying, robbing the nation of wealth, productivity, and the opportunity for more people to live in economically vibrant urban settings. They’re perhaps the costliest regulations we have in the U.S., and, at least to me, make for our biggest domestic policy mistake."
Debating deed restrictions and zoning, office vs. remote work, transit radio show, and more
I've actually been accumulating items faster than I've been posting them, and it's gotten out of control, so this will be a long post to do some catching up.
The featured item this week is I got in an active debate with the Market Urbanist Scott Beyer on the value of deed restrictions vs. zoning, which you can read in the comments at the bottom of his piece on deed restrictions here.
Moving on to the rest of this week's items:
Dispersion in US metros increases even before Covid-19: New Census estimates. Houston growth has slowed a bit since the oil boom days, but still ahead of most other big metros. We just crossed 7 million metro population, which is an impressive achievement only 4 other US metros have accomplished (NYC, LA, Chicago, DFW).
"New York City has withstood and emerged stronger from a number of catastrophes and setbacks — the 1918 Spanish Flu, the Great Depression, the 1970s financial crisis and the 2001 terrorist attacks. Each time, people proclaimed the city would forever change — after 9/11, who would want to work or live in Lower Manhattan? — but each time the prognostications fizzled.
But this moment feels substantially different, according to some corporate executives.
The economy is in a sustained nosedive, with unemployment reaching levels not seen since the Great Depression. Many companies are in financial trouble and may look to shrink their real estate as a way to cut expenses.
More fundamentally, if social distancing remains a key to public health, how can companies safely ask every worker to come back?
“If you got two and a half million people in Brooklyn, why is it rational or efficient for all those people to schlep into Manhattan and work every day?” said Jed Walentas, who runs the real estate company Two Trees Management. “That’s how we used to do it yesterday. It’s not rational now.”
“We have a lot of millennial buyers who are already used to working remotely. They don’t know how long this (pandemic) is going to last, and they’d rather be here (Tahoe),” Bednar told the Tribune, “The people I’m talking to are looking for a simpler life, a close community. They want the outdoors and don’t want to be stuck in places where there’s a health problem.” ...
“People are starting to ask themselves, ‘Why do I have to live in such an expensive area and drive an hour to work every day, or rent out an expensive office space when everyone can work remotely?' If you don’t need to live in the city, why would you?” Bednar said.
“The COVID-19 pandemic forcing those who could work from home to do so has led to a surprising result — improved productivity. U.S. workers were 47% more productive in March and April than in the same two months a year ago through cloud-based business tools, chat applications and email, according to an analysis of 100 million data points from 30,000 Americans by workplace-monitoring company Prodoscore.”
...
“Our salespeople meet five to eight customers a day now [via videoconferencing] versus the one it took them three days [to see in the past] because of travel,” he added.
This gets reinforced in the comments of a pro-office op-ed in the NYT, which are at least worth skimming. Even though the author makes a case for some of the benefits of the office, the overwhelming sentiment in the comments is “screw that, I love working from home and not commuting!” for all sorts of reasons, including less office drama/politics and fewer worthless meetings. It’s clear to me that both overwhelming sentiment, as well as simple economics/costs, work against offices. I think they will go into a significant decline. One other point the author misses is that you can separate the social aspect from the work aspect with the rise of coworking spaces, which are exploding everywhere: a shared space where there are others you can interact with, but everyone works for different companies. Still get the networking and socialization without the long commute to one central office with all of your company’s other employees.
"An important step is simply to permit more housing in more locations. We should put an end to zoning policies that restrict building to single-family homes and stop mandating that lots meet large minimum-size requirements, leading to sprawling, sparsely populated neighborhoods. Ending such restrictive zoning doesn’t have to lead to the construction of towering apartment buildings. Rather, we should encourage cities to permit more homes on existing single-family lots, allow apartments in retail districts and near transit, and dedicate excess or underused public property like surface parking lots in downtowns to new housing. All of this can be done without materially changing the look, feel and experience of a place.
The second important step is to reduce the cost and uncertainty of getting a housing project built. It often takes years to get permission to build. Local government processes often allow multiple “bites at the apple” of public comment and hearings for a plan. Sometimes, even when there is a vote to approve a project, a neighbor or special interest can sue to stop the approval, resulting in further significant delay. These delays add cost and risk, driving up the price of new homes and sometimes stopping projects in their tracks entirely.
...
These types of actions, which can be taken now, will lay the groundwork for a broad and shared prosperity. When denser housing is allowed, workers can live closer to their jobs, help save the planet by driving less and pay less in rent or mortgage payments because a bigger housing supply will lead to lower costs. Research shows that children tend to be more successful in neighborhoods with access to high-quality schools. In restricting building, more-affluent Americans are shutting lower-income families off from economic opportunity.
Now is an especially good time to reduce restrictions and allow for denser housing. Construction is hit hard during recessions, and opening up more building opportunities would be a stimulus for the industry, and it doesn’t require any extra funding. This would get workers back to work, provide safe and affordable living for those hard hit by this pandemic and get property taxes and other revenue flowing back to local governments for the services communities need. It would be a win for everyone."
"Without a significant expansion in the supply of housing, adding vouchers would be like adding players to a game of musical chairs without increasing the number of chairs.
Market-rate construction can help: More housing would slow the upward march of housing prices. New York and San Francisco are the nation’s most tightly regulated markets for housing construction, and it is not a coincidence that they also are the most expensive. Tokyo, often cited as an international model for its permissive development policies, has expanded its supply of homes by roughly 2 percent a year in recent years, while New York’s housing supply has expanded by roughly 0.5 percent a year. Over the last two decades, housing prices in Tokyo held steady as New York prices soared."
Finally, I'd like to end with a radio show I did with Bill King along with Carrin Patman and Tom Lambert of METRO on what's happening with the past, Covid present, and potential future of transit. Apologies for my bad body language - I didn't even realize I was being videoed until over halfway through, lol. I was just focused on my notes and getting the audio right.
Could Houston get Google? converting the 59 Spur to a linear park, housing crisis drives socialism, millennials are driving, Houston is the future, and more
Apologies for the delay between posts - I've had some busy travel recently. Before getting to this week's items, a couple thoughts on the City's consideration of turning the Bagby and Brazos portions of Spur 527 off 59 into a park. I live in Midtown, so this affects me directly. I've managed to adapt ok to losing the Brazos exit since the bridge closed for repairs - Louisiana is inconvenient but works - but losing Bagby's southbound entrance is a bigger deal. I've thought quite a bit about this. At first I was totally opposed, then I figured I could live with it via Smith and Louisiana but still moderately opposed (even with the benefits of Bagby traffic reduction). I do think it will substantially negatively affect some of the businesses along Bagby and Brazos that rely on drive-by traffic like Spec's, CVS, and especially the new Midtown Whole Foods (which is already struggling in what was previously a food desert), as well as thousands of commuters that connect between 59 and 45 (which, in turn, will make the already-messy 59-45-288 interchange even worse). In fact, I'd argue the optics look pretty bad: sacrifice the commutes of a lot of working-class folks on the north and east sides commuting to jobs in the southwest so a few wealthy white people in gated Courtlandt Place can have a pocket park. Not a good look. And I think it is very likely that a City-maintained linear pocket park will turn into a homeless camp (sad, but that's the reality these days) - something I hope the neighbors have considered in their support. They may come to really regret it...
Mapped: The Salary Needed to Buy a Home in 50 U.S. Metro Areas. The only top ten metro less expensive than Houston is Atlanta. Texas as a whole does quite well, especially when our incredible growth rate is considered (the least expensive metros tend to also be growing the slowest).
When this guy talks down our downtown tunnel system, my response is that I would bet, five months of the year, downtown workers are willing to travel a lot farther to shop or visit a cool restaurant for lunch if they can use the tunnels than if they had to walk outside. Downtown vibrancy would actually decline without the tunnel system.
“If we keep forcing them to pay for housing and parks, they will go to Houston or Austin.”
I think the advantages for a Google office here would be pretty strong. Tons of oil-and-gas tech/IT talent that’s easy to poach, a city willing to do anything to land them, plus deep expat communities from nations all over the world that could handle some global functions (esp. Latin America). It would also work well if Google is considering any health care plays, with the world's largest med center right down the way in the innovation corridor.
Another thought is, what if you wanted to have a US office where you could bring H1B visa talent from all over the world, and they would be able to afford to live there as well as find a comfortable expat community from their nation? Houston would be a great location for that: huge Asian, Latin American, African, Middle Eastern, and even European communities - many from the long history of the global oil industry here.
This is a fantastic interview with Ed Glaeser that directly relates to COU’s mission. Great short video too. Really gets to how the housing crisis has led to the rise of socialism’s popularity among the young. "The entrenched vs. newcomers."
Government policies limit millennials’ prosperity, Harvard economist Edward Glaeser argues. Will they realize more of the same isn’t the answer?
“The right answer for this is not universal basic income. The right answer is freedom. Allow people to use their property the way they want to use it.”
Millennials hitting road at fast pace - "It turns out millennials don’t hate driving, after all." Remember when everyone thought Millenials were going to avoid driver's licenses and car ownership? Well, they did for a while, then they grew up and started forming families.
"New supply is one reason the median home price in Texas is currently $207,301, while in California, it’s nearly triple that, $605,280. California’s drought in new home production has been caused in part by land-use regulations and the state’s myriad environmental laws.
...
A Zillow-backed survey of economists and housing analysts predicted that in 2020, Texas’s relatively affordable big cities (Houston, San Antonio, Dallas, and especially Austin) will outperform the market average in home value growth, while overpriced California metros like San Francisco, Sacramento, and Los Angeles will fare poorly.
...
The California housing situation, on the other hand, is a multifaceted mess. Prices have skyrocketed. A new apartment in San Francisco costs an average of $700,000 to build—including materials, labor, and land—triple the cost of a decade ago. The average value of a home in Los Angeles County is $635,000—almost double the median price in Austin and nearly triple the median price in Dallas—and many neighborhoods have seen average prices more than double in the last decade. According to the United Way, one in three Californians, or 3.3 million families, don’t have incomes to meet their basic cost of living, and most struggle with high housing costs. The state’s 150,000 homeless residents represent a quarter of the nation’s homeless population. The nonpartisan Legislative Analyst’s Office estimates it would cost “in excess of $250 billion” to provide affordable housing for all of the state’s 1.7 million rent-burdened households."
"Houston is a top U.S. city for STEM grads and engineering talent with more than 300,000 educated millennials and 240,000 STEM workers. STEM talent powers some of the largest industries in Houston, from energy to life science and manufacturing.
Houston also offers these UHD and other STEM students a top-tier job market. According to the American Enterprise Institute’s Housing Center, Houston is the second best U.S. metro area for STEM workers.
Technology, in particular, is thriving. According to the Partnership's most recent edition of Houston Facts, with more than 223,000 tech workers, Houston has the 12th largest tech sector in the U.S. Nearly two-thirds of Houston’s high-tech workers are employed in industries other than computers and software."
"The Cascade Policy Institute released a detailed study of a road diet plan whose effects include worse traffic congestion, less transit service, and no significant increase in bike and pedestrian traffic that had been projected. The study, “The New Sellwood Bridge: Promises Unfulfilled,” is a valuable case study of how the local politics of transportation and smart growth led to unfortunate outcomes."
The age of winner-take-all cities. Cool graph of metros by GMP. Houston is 5th largest metro by population in the country, but drops to #7 ranked by GMP, getting edged out by DC and SF. Interesting fact: even with substantially fewer people, if you combine SF and San Jose's GMP they're notably larger than Chicago. That's the power of tech.
"The top 25 metro areas (out of a total of 384) accounted for more than half of the U.S.'s $19.5 trillion GDP in 2017, according to an Axios analysis of Bureau of Economic Analysis data."
Finally, I wanted to end this week's post with Metro's new MetroNext plan overview video, which I think is pretty well done getting it all packed into only two minutes. In particular, they do a good job explaining the MetroRapid BRT rail-like benefits, which the public isn't familiar with. Last week they officially approved the bond referendum for this November's ballot.
The paradox of liberal coastal cities and the real reason for growing inequality, Austin embraces BRT, the freeway of the future is congestion-priced, and our growing density
"And last month, [Senator Kirk Watson] gave a big signal that he’s ready to get involved in bringing a full-fledged mass transit system to the area.
And that it probably won’t be light rail.
[Capital Metro's CEO has been promoting] a regional system of autonomous, electric-powered buses moving in platoons along dedicated transit rights of way on or next to Central Texas streets."
"In 2017, there were 168,600 households in buildings with 50 or more units — more than double the number in 2013. They are moving to recent large-scale residential additions to the city such as Camden McGowen Station and the Pearl in Midtown."
Excellent post on the power of congestion-priced toll lanes (i.e. MaX Lanes). Turns out the optimum speed for maximum throughput is only 50mph, which was a bit lower than I expected. I hope autonomous vehicles will be able to go much faster much closer together to move that speed up substantially.
"The real problem here is that housing is never just a question of “build” or “don’t build.” It’s “build here” or “build somewhere else.”And if you live in a coastal U.S. city, somewhere else is usually way worse for the environment. People don’t disappear just because they can’t move to our cities; they move to the suburbs of Texas, where housing continues to be produced in abundance and, as a result, costs have stayed reasonably low.
...
Some of you may remember the hub-bub in 2014 over Thomas Piketty’s book, “Capital in the Twenty-First Century,” which examined wealth inequality in Europe and the U.S. over the past few centuries. It was an absolute blockbuster (for an economics book), showing that the share of income coming from returns on capital was increasing over time, which was bad news for those of us who don’t earn most of our money on stocks, property, or other capital investments (i.e., most of us). It was a rallying cry for liberals around the developed world.
What you may not have heard about was the critique of Piketty’s work by a 26-year-old MIT graduate student named Matthew Rognlie, who basically said that the issue isn’t so much capital in a general sense, but housing in particular. In other words, the growing value of housing relative to other assets (as well as labor income) is responsible for almost 100 percent of increasing wealth inequality in the Western world.
... By doing essentially nothing but letting things happen, conservative America is kicking our ass at providing opportunities for low income and working classes to build wealth and get ahead. Cities like Dallas, Phoenix, and Atlanta have managed to stay affordable by simply allowing housing to continue to be built as their populations grow, and the result is that people keep moving there.
...
So, this is the paradise we’ve built across the liberal cities of the United States. Are we proud? I’m not. We’ve walled off our cities to those of lesser and greater means, making pathetic, often subtly racist or classist arguments about “character” and “culture.” We’ve destroyed any possible opportunity for low income and working class households to build wealth in the same way as their affluent neighbors, or displaced the poor households so that they’re no longer neighbors at all."
"Under a shared mobility system, the Gini co-efficient dropped from 0.27 to 0.11 for access to jobs; from 0.26 to 0.08 for access to health services; and showed near perfect equality at 0.01, down from 0.26, for access to education. The more efficient use of vehicles makes it possible to cut current prices of public transport journeys in the city by 50% or more without any subsidies."
"...transit can provide mobility for people who can’t or don’t want to drive, but it can’t relieve congestion, reduce transportation costs to taxpayers, save energy, reduce pollution, create real estate development, or stimulate the economy of a region."
"...these self-driving fleets will be significantly cheaper than owning a car, which sits idle roughly 95% of the time. With the savings, you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children.
Your commute will be downright luxurious, quiet time in a vehicle designed to allow you to work or relax. Shared self-driving cars will have taken so many vehicles off the road—up to 80% of them, according to one Massachusetts Institute of Technology study—that you’re either getting to work in record time or traveling farther in the same time, to a new class of exurbs."
What Auckland can learn from Houston, rail fails, left-right overregulation consensus, why you can't afford to live in a liberal city, and more
My hot air has finally made it to the other side of the planet. A New Zealand journalist interviewed me during a visit to Houston a couple months ago on what Auckland could learn from Houston’s laissez faire approach to land-use regulation and housing development, and she extensively quoted me in this piece that came out of it. The quotes are mine, but I cannot take responsibility for the very outdated/young picture of myself she used!
Moving on to the smaller items to catch up on this week:
"Given the ridership levels we’ve seen so far, will the value added from rail vs. the old bus approach be there? It’s not looking good. And if the case in LA is looking weak, certainly smaller and less dense places are even more speculative."
"Journalists in older cities like New York, Boston or San Francisco may see the role of rail transit as critical to a functioning modern city. In reality, rail transit has been a financial and policy failure outside of a handful of cities.
In 23 metropolitan areas that have built new rail systems since 1970, transit’s share of commuting — including all forms, such as buses and ferries — has actually slipped a bit, from an average of 5.0 percent before the rail systems opened to 4.6 percent in 2013....
Virtually all the actual increase in rail commuting has occurred in the “legacy cities”: New York, Boston, San Francisco, Washington, Chicago and Philadelphia. These are older cities built around well-defined cores that were developed mostly before the automobile."
"It’s a city that is open to change and open to new people. I really love that. And it’s a forward-looking city. People in Houston aren’t desperately trying to hold on to what the city was. They want it to change and change for the better."
"There is a deep literature tying liberal residents to illiberal housing policies that create affordability crunches for the middle class. ... I asked Kahn if he had a pet theory for why liberals, who tend to be vocal about income inequality, would be more averse to new housing development, which would help lower-income families. He suggested that it could be the result of good intentions gone bad."
"I am providing a link to my just published review of Urban Economics and Urban Policy: Challenging Conventional Policy Wisdom by Paul Cheshire, Henry C. Overman and Max Nathan of the London School of Economic and Political Science. Many of you are doubtless aware of the long list of publications on urban containment policy by Paul Cheshire. This book is certainly among the most important contributions to the literature. Their theme that planning should be focused on people rather than places could not be more timely. Harvard’s Edward Glaeser also provides a masterful Foreword."
And excerpts:
"… that the ultimate objective of urban policy is to improve outcomes for people rather than places; for individuals and families rather than buildings."
"This is not to say that we should stop caring about what is happening in different cities and neighbourhoods but serves to remind us that improving places is a means to an end, rather than an end in itself."
"All policies need to be judged by the impact on people, not places."
“…argue that the costs imposed by the planning system are prices worth paying to ‘protect the countryside’ or achieve other policy objectives. However, it is not helpful for public debate to pretend that the costs we have documented do not exist; or even that they are negligible. Existing research shows that this is simply not the case; indeed research shows the costs are very substantial even if some are difficult to measure exactly."
The Houston model wins again: apartment supply is allowed to catch up with demand and affordability returns (Growing consensus: Local apartment market 'overbuilt'). People complain that all of these new apartments are at the high-end and not increasing affordable housing, but what they fail to recognize is that new high-end apartments force the second tier to be cheaper to compete, which forces the third tier to be cheaper to compete, and so on like falling dominoes, expanding affordable units at the bottom.
"Recent trends suggest that metropolitan areas can make progress toward growth, prosperity and inclusionat the same time. However, strong performance on all three outcomes at once is exceptional. From 2009 to 2014, only nine large metropolitan areas performed above the average of all large metropolitan areas taken together on growth, prosperity, overall inclusion, and inclusion by race.... But only two performed above average over the short term, the medium term, and the long term:Houston and San Jose."
"In the absence of zoning restrictions on the number of housing units in a neighborhood, neighborhood amenities would be a public good. Zoning converts neighborhood amenities from a public good (a partially non-rivalrous, non-excludable good) into a "club" good (a partially non-rivalrous, excludable good). Because "club" membership is bundled with home ownership, zoning causes the value of neighborhood amenities to be capitalized into home prices. NIMBYism can be thought of as the practice of objecting to development in order to protect the value of "club" membership."
Let us again be thankful for the wisdom of our predecessors not bringing zoning to Houston...
"There’s little argument that inequality, and the depressed prospects for the middle class, will be a dominant issue this year’s election. Yet the most powerful force shaping this reality—the rising cost of housing—has barely emerged as political issue.
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Following our current path, we can expect our society—particularly in deep blue states—to move ever more toward a kind of feudalism where only a few own property while everyone else devolves into rent serfs. The middle class will have little chance to acquire any assets for their retirement and increasingly few will choose to have children. Imagine, then, a high-tech Middle Ages with vast chasms between the upper classes and the poor, with growing dependence—even among what once would have been middle-class households—on handouts to pay rent. Imagine too, over time, Japanese-style depopulation and an ever more rapidly aging society.
Yet none of this is necessary. This is not a small country with limited land and meager prospects. A bold new approach to housing, including the reform of out of control regulations, could restore the fading American dream for tens of millions of families. It would provide the basis for a greater spread of assets and perhaps a less divided—and less angry—country. Rather than waste their time on symbolic issues or serving their financial overlords, candidates in both parties need to address policies that are now undermining the very basis of middle-class democracy."
Finally an unpaid personal aside and recommendation: amazingly, the January electric bill for my loft was $5.52 (about two cents per kWh!) after the $25 monthly low-usage credit on the optimized electricity plan I got through My Best Plan, run by a fellow Rice alum. They optimize your electric plan among the dozens or even hundreds available based on your historic seasonal usage profile. I can't recommend them highly enough if you find the electricity market overwhelming or excessively complex and time consuming.
Opportunity over inequality, Vision Zero, policing for mental health, peak transit, and more
Several items to get to this week, but first I'd like to highlight this excellent piece (alternate link) by fellow, uh, Fellow at the Center for Opportunity Urbanism, Anne Snyder. Fantastic and emotionally powerful story that Harris County and the City of Houston can definitely learn from (please pass it along if you know any relevant people).
Policing With Velvet Gloves This is the story of how San Antonio’s police department helped divert 100,000 people away from jail and ERs, and moved them into mental-health treatment—one 911 call at a time.
Moving on to this week's items:
Are we approaching (or have we already passed) peak transit? Transit ridership is declining all over the country (see example below), and especially markedly in cities making large rail investments. Coming super-cheap self-driving taxis are likely to be the final nail in the coffin...
"If you have a population increase and you don’t increase housing, people will get pushed out," says Beyer. “If Miami decides to get tight on its land use regulations like New York, then Miami will have the same problems. Right now, regulatory burdens and the process of getting new buildings in New York approved is so lengthy that it doubles the cost of a unit. Consider Houston. Houston has a faster growing population than New York City and San Francisco, but it’s affordable because they have rapid construction rates.”
I finally got to read the new Vision Zero plan, and here are my thoughts: Do I support improved safety and think there's a lot of room for improvement? Absolutely. Do I want a city of 25mph speed limits, road humps everywhere, and police pulled from real crime to writing streams of traffic tickets? Absolutely not. The problem lies where the safety goals gets mixed up with the anti-car vision of many urbanists - "if we can just make driving a car painful enough, people will be forced into density and transit" - as articulated here. Improved safety is great, but we can’t co-opt peoples’ real mobility and economic productivity.
What would my #1 solution to traffic safety be? It would be at the federal level: require all new cars to require a breathalyzer test to start after 10pm at night, when the vast majority of drunk driving accidents happen (these sensors can be very low cost at scale). But it's also probably less than 1-2% of total trips, so most people most of the time would not have to use it. And I know this is unpopular and politically impossible, but I'd also support bringing the red light cameras back to reduce intersection collisions, which are some of the most dangerous (but only to enforce intersection crossings, not right turns on red where there is a lot more room for judgement on turning safely).
My final item is a response to Chris Tomlinson's column in the Chronicle questioning Houston's reputation as a city of opportunity: I think a few things are getting mixed up here. Houston has high inequality because we have high-paying industry clusters like energy and medical, as opposed to a more average big city like Phoenix or Tampa. That's most definitely a good thing - if we lost those industries, that would certainly be a bad thing, but inequality would drop. We also haven't driven out the poor by making housing unaffordable - like the coastal cities - so our inequality stats will look relatively worse.
What makes Houston a city of opportunity is not low inequality, but 1) having a ladder of middle class and working class jobs, including industrial and manufacturing ones - as opposed to coastal cities that tend to be a barbel between high paying jobs and low paying service jobs with nothing in the middle, and 2) having affordable housing, so a middle and working class family can afford a home and build equity, as opposed to being lifetime renters (like, again, the expensive coastal cities). The question is not "does Houston have a lot of poor people?" - we absolutely do, because opportunity cities attract the poor who want to move up, especially immigrant populations - but "do they do well and move up once they're here?" Based on Klinberg's Houston Area Survey's consistently high scoring optimism around working hard and doing well in Houston, I'd say we do well on that score - the residents certainly seem to think so.
The emerging cross-ideological consensus on excessive zoning and land-use regulations
There seems to be a growing awareness of the downsides of zoning and excessive land regulation in cities, as evidenced by these five recent items. Apologies for the long excerpts, but these articles are making important points I really want to convey the essence of.
A really important article in the Washington Post about "The emerging cross-ideological consensus on zoning." Enough good stuff in here to justify some pretty extensive excerpts, including mentions of Houston:
"In recent years, and especially over the last few months, economists and other public policy experts across the political spectrum have come to realize that zoning rules are a major obstacle to affordable housing and economic opportunity for the poor and lower middle class. By artificially restricting new construction, zoning and other similar land-use restrictions greatly increase the price of housing, and prevents the market from adjusting to increasing demand.
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[E]xcessive or unnecessary land use or zoning regulations have consequences that go beyond the housing market to impede mobility and thus contribute to rising inequality and declining productivity growth…
[S]ome land use regulations can be beneficial… But in other cases, zoning regulations and other local barriers to housing development allow a small number of individuals to capture the economic benefits of living in a community, thus limiting diversity and mobility. The artificial upward pressure that zoning places on house prices — primarily by functioning as a supply constraint — also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent….
Zoning and other land use regulations, by restricting the supply of housing and so increasing its cost,may make it difficult for individuals to move to areas with better-paying jobs and higher-quality schools.
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Among those who support reform, there is disagreement between advocates of a more technocratic approach to limiting zoning, and those like Edward Glaeser and myself who would prefer to follow the excellent example of Houston, and abolish zoning altogether. In my view, the latter solution is preferable in a world of widespread voter ignorance, where the public is unlikely to be able to monitor the extremely complex details of zoning closely to ensure that it will not serve narrow interest groups at the expense of the general public.
Despite its limitations, the growing cross-ideological agreement on zoning is a valuable development. Similar cross-ideological agreement among experts helped set the stage for airline deregulation in the late 1970s, creating enormous benefits for consumers. The potential benefits of zoning deregulation – greatly increased housing and job opportunities for millions of people – might be even greater.
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UPDATE #2: This post responds to me by arguing that Houston, despite its lack of zoning, has a variety of other dysfunctional land-use restrictions. That is true. But Houston still has much less in the way of regulatory obstacles to development than other large cities, which do have restrictive zoning. That is one of the reasons why many people are “voting with their feet” for Houston and other cities with similar policies. The point is not that Houston is perfect (it is far from it), but that following its example would be a huge improvement for many other cities."
Aaron Renn (The Urbanophile) wrote on a similar theme in the City Journal last Spring (hat tip to Scott): "Libertarians of Convenience - Urban progressives favor deregulation—but only for things they like or want to do."
"In Texas’s cities, by contrast, progressives often share, to some degree, the state’s pro-freedom, pro-market ethos. That’s why Houston, though hardly without restrictions on building, has no zoning per se and a pro-market Democrat, Annise Parker, for mayor. Unsurprisingly, it remains an affordable place to live, as do other low-regulation cities, such as Indianapolis."
"Zoning has shaped American cities since 1916, when New York City adopted the first comprehensive ordinance. It has remained a popular and widely used institution, particularly for homeowners wishing to protect the value of their homes. As values have soared in recent years, however, this protection has accelerated to the degree that new housing development has become unreasonably difficult and costly. The widespread Not in My Backyard (NIMBY) syndrome is driven by voters’ excessive concern about their home values and creates barriers to growth that reach beyond individual communities. Those barriers contribute to suburban sprawl, entrench income and racial segregation, retard regional immigration to the most productive cities, add to national wealth inequality, and slow the growth of the American economy. Zoning Rules, an update of Fischel’s 1985 classic book The Economics of Zoning, examines this history while offering solutions to the unintended consequences of zoning."
"After many decades of essentially ignoring the role of land, economists are starting to reconsider. Some are worried that landlords are hurting growth by making it too expensive to live in highly productive cities. Now, some are starting to think about how land figures in the rise in inequality.
The basic idea is that landlords use their local political power to stack the deck. Using their money and connections to sway local elections, they can influence politicians to enact land-use regulations that keep out other people and businesses. That gives them a so-called first mover advantage that shuts out the competition. At first, people who want to move to for work or to start a business can move to other, newer cities where local landlords are not as politically entrenched and regulation not yet as onerous. But eventually the country fills up with powerful landowners, and the options for cheap relocation become limited. Stuck in dying cities or far away from job opportunities, potential employees languish in poverty.
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According to Furman, some of the change may be due to more zoning. Since the late 1970s, land-use regulation has skyrocketed in the U.S. That has caused housing prices to go up at a much faster rate than construction costs -- something sure to please existing homeowners, but which locks potential homeowners out of the market. The more zoned a city is, the less affordable it tends to be.
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Lack of affordability doesn’t just create inequality among individuals, it creates inequality across regions. Furman shows that states with more constrained housing supply have seen much slower income convergence between different cities. That strongly implies that land-use restrictions are effectively keeping people penned up in bad locations.
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If it turns out that zoning really is a major drain on the U.S. economy, it opens the possibility of a bipartisan coalition. Conservatives are interested in limiting regulation overall, while liberals would like to reduce inequality. Since this is one of the clearest cases where regulation is increasing inequality, politicians on both sides of the ideological divide should figure out a way to come together to work out reforms."
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.
