The recent call to use the Gulfton neighborhood as a poster
child for imposing city-wide zoning (“I'm an urban planning expert from
Houston. It's time we talk about zoning again.” Houston Chronicle 8/1/25) is
the latest verse in a seductive but dangerous song. Words like “planning” and
“zoning” poll well because they offer a vague cure-all for the complexities of
a dynamic city. It’s an understandable impulse, but it’s a trap—a classic case
of the “grass is always greener” fallacy, where a theoretical, perfect version
of zoning is imagined, while the grim reality of its failures elsewhere is
ignored.
Before we consider dismantling the very system that has made
Houston a beacon of opportunity, we must take an honest account of what that
system delivers. Houston’s status as one of America’s most affordable and
dynamic major cities is the direct result of our unique light regulatory touch.
Our ability to build new housing at a rate reportedly up to 14 times that of
our zoned peers is the core of our success. This is why Houston largely avoided
the catastrophic housing bubbles that devastated other regions and why our home
price-to-income ratio remains the envy of the nation.
The contrast with heavily zoned cities is stark. While Texas has
approximately 90 homeless individuals per 100,000 residents, California’s rate
is nearly five times higher, fueled by a regulatory crisis that can push the
cost of a single “affordable” housing unit to over $500,000. Houston
prioritizes building, which results in a higher standard of living for those
with resources and more humane options for those without.
A critical part of our success has been smart, inner-loop
densification, unleashed by pragmatic lot-size reforms. The resulting townhome
boom created tens of thousands of new homes, the very “missing middle” housing
that has effectively become illegal to build in most American cities. On
expensive urban land that, under a restrictive zoning regime, would either
become a massive McMansion or remain blighted, Houston gets thousands of new
homes affordable to middle-income families.
The city-wide zoning now being contemplated, using Gulfton as an
example, is a recipe for exclusion. It would hand a powerful tool to NIMBYs all
over the city to kill development and force stagnation. This isn’t a guess;
it’s the lived reality of every major zoned city, where restrictions choke
supply, drive up prices, and displace the very people they claim to protect.
Furthermore, this push, like the recent attempt to create so-called
“conservation districts,” is an undemocratic end-run around the City Charter
and the will of Houston voters, who have decisively rejected zoning three
separate times.
The choice is not between chaos and zoning. Houston is not
“unplanned”; it is largely privately planned through a robust system of
voluntary deed restrictions. This provides the best of both worlds: neighbors
who want zoning-like protections can have them, while the city as a whole can
grow and adapt. For specific conflicts, we use surgical tools like buffering
ordinances, not a sledgehammer.
Cities across America are now desperately trying to liberalize
their land-use rules to achieve a fraction of the affordability and dynamism we
take for granted. For Houston to voluntarily inflict this self-destructive
disease upon itself would be a historic tragedy. We are the model other cities
are trying to emulate. Let’s not break what works.
Tory Gattis is the editor of the Houston Strategies blog and a Founding Senior Fellow with the Urban Reform Institute.
Texas Just Launched a Four-Pronged Attack on the Housing Crisis
This legislative session has culminated in a landmark victory for property rights and housing affordability in Texas. Thanks to the tireless work of advocacy groups like Texans for Reasonable Solutions, which championed this entire suite of bills, Governor Abbott has now signed four powerful pieces of legislation that represent the most significant pro-housing reform the state has seen in decades. This isn't a single, timid step; it's a coordinated, multi-front assault on the regulatory red tape that has driven up housing costs and limited options for Texas families.
For years, we've watched major Texas metros grapple with an affordability crisis born not of scarcity of land or lack of demand, but of an ever-growing thicket of municipal ordinances. These four new laws—HB 24, SB 840, SB 2477, and the capstone bill, SB 15—take direct aim at the root of the problem: artificial constraints on supply. Let's break down each of these strategic wins.
1. HB 24: Ending the "Tyrant's Veto"
One of the most pernicious, anti-growth mechanisms in Texas zoning has been the "protest-by-a-small-minority" rule, rightly dubbed the "tyrant's veto." Under the old law, if owners of just 20% of the land area near a proposed zoning change objected, it triggered a supermajority vote (three-fourths) of the city council for approval. This gave a handful of NIMBY ("Not In My Back Yard") neighbors disproportionate power to block new housing projects that a simple majority of elected officials, and likely the community at large, supported.
Championed by Rep. Dustin Burrows and Sen. Bryan Hughes, HB 24 fundamentally restores fairness to the process. The bill targets the most common use of the veto by raising the protest threshold for adjacent property owners to 60% and, crucially, removes the supermajority requirement for those protests.
The result: A small group of opponents can no longer single-handedly kill beneficial projects. This strengthens property rights for landowners who wish to develop housing and empowers city councils to make decisions for the good of the entire city, not just a vocal few.
2. SB 840: Turning Underused Commercial Strips into Homes
Drive through any major Texas city, and you'll see them: aging, half-empty strip malls, vast parking lots, and underutilized commercial corridors. This is what I call "greyfield" land—already developed and served by infrastructure, yet failing to meet its economic potential. SB 840, led by Sen. Bryan Hughes and Rep. Cole Hefner, provides a powerful tool for recycling this land into something far more valuable: housing.
The bill allows residential and mixed-use housing to be built by-right on land zoned for commercial or retail use in Texas's largest cities. This means developers can bypass the lengthy, expensive, and uncertain rezoning process to build multifamily or mixed-use projects. The law builds on the stunning success of similar reforms in Florida, which saw over 15,000 housing units approved in its first year.
The impact is threefold: It unlocks a massive supply of land for infill development, which reduces sprawl and conserves precious farmland. It puts downward pressure on rents by increasing the housing supply where it's needed most. And it revitalizes unproductive commercial areas, turning them into vibrant, walkable neighborhoods.
3. SB 2477: Unlocking Empty Offices for Housing
The post-pandemic world has left Texas cities with millions of square feet of vacant office space. Houston and Dallas have some of the highest office vacancy rates in the nation. This is not a cyclical dip; it's a structural shift. SB 2477, from Sen. Paul Bettencourt and Rep. Jared Patterson, offers a common-sense solution: let people live there.
Much like SB 840, this law legalizes the conversion of vacant office buildings into residential housing by-right. It streamlines the process by waiving costly and often unnecessary requirements like traffic impact analyses and new parking minimums that were designed for a commercial-use building, not a residential one. With polls showing 71% of Texans support this idea, it's a clear policy winner.
This is the definition of sustainable growth—recycling existing structures to meet a critical need without using an inch of open space.
4. SB 15: The Starter Home Revolution
The final and perhaps most crucial piece of the puzzle is SB 15. With an overwhelming 90% of Texans viewing housing costs as a problem, the need for more attainable options is undeniable. For decades, many cities have used large-lot zoning requirements as a tool to mandate low-density, high-cost housing, effectively outlawing the construction of more affordable "starter" homes.
SB 15 takes direct aim at this exclusionary practice. In Texas's largest cities (150K+ population in counties of 300K+), the law now limits a city's ability to impose a minimum lot size greater than 1,400 square feet in new subdivisions. It also reigns in excessive setback, height, and bulk rules for these smaller lots, giving builders the flexibility to provide a wider range of housing products.
We don't have to guess at the results. Houston’s pioneering 1998 reform provides a real-world case study, resulting in a boom in townhomes that in 2021 averaged just $310,000 compared to $545,000 for traditional single-family homes. Analysis shows the potential is enormous: Dallas could add over 120,000 starter homes and Fort Worth could add 26,000 on available land under the new rules. This is the kind of sustainable, market-driven solution that encourages infill development, conserves farmland, and boosts tax revenue per acre.
A New Era for Texas Housing
Individually, each of these bills is a significant victory. Together, they represent a paradigm shift. The Texas Legislature and Governor Abbott have sent a clear message: the state will no longer allow arcane local regulations to stand in the way of housing production. By neutralizing the NIMBY veto, unlocking underutilized properties for residential use, and allowing the market to build the smaller, more affordable homes that Texans clearly want, this legislative session has laid the foundation for a more prosperous and affordable future for our state.
Houston Still #1, And Why Bad Planning Hurts (Elsewhere)
Just a few quick items that have crossed the screen recently, reinforcing some long-held Houston Strategies principles:
Houston: Still Drawing a Crowd
First up, no surprise to those of us living here, but Houston has once again topped Penske's list of America's top moving destinations for 2024. CultureMap highlighted the news, noting this is the fourth consecutive year Houston has held the top spot. People are voting with their feet, and they're choosing Houston. Why? The familiar reasons resonate: job opportunities, a reasonable cost of living (especially compared to those "cool" coastal cities), and the ability to find more space. It seems the fundamentals still matter.
The High Price of "Planning" Utopia
Speaking of that reasonable cost of living, particularly in housing, the just-released 2025 Demographia International Housing Affordability report continues to lay bare the consequences of restrictive land-use planning. Year after year, Wendell Cox over at Demographia points out that a major driver of housing unaffordability globally is policies that try to force density and limit the expansion of housing on the urban fringe. These "smart growth" or "urban containment" strategies, while perhaps well-intentioned in some abstract sense, consistently lead to skyrocketing land costs and, consequently, housing prices that push ordinary families out. They create artificial scarcity. Houston is at a house-price-to-income ratio of 4.3, which is one of the most affordable in the country, especially for a high-growth city.
Pure gold excerpt on Planning and Portland
This brings me to a truly pure gold excerpt I saw recently from Randal O'Toole, The Antiplanner, discussing the failures of Portland's Metro 2040 plan. It's a long piece, but this part cuts to the chase (emphasis mine):
"The 1995 Future Vision called for “housing affordable for all,” “accessible employment centers throughout the region,” “equitable economic progress,” “public safety,” and reductions in poverty. By all of these measures, the region is worse today than it was in 1997, and this decline is almost entirely due to Metro’s 2040 plan. ....
The real problem is that planners can’t accurately foresee the future, so instead of planning for the future they plan for the past. Instead of helping people obtain the future they want, planners become so enamored with their plans that they persuade themselves that coercive tools such as restrictions on things that people want and subsidies for things that people don’t want are all good ideas.
This is why I am an Antiplanner. Planners get so caught up in their fantasies that they completely ignore reality when it is staring them in the face. Even when it is clear that their plans have failed — that “growing up not out” hasn’t made housing affordable, that building more light rail hasn’t gotten people out of their cars — they keep on doing the same thing. Metro, for example, continues to subsidize high-density housing projects and is busy planning at least two more light-rail lines."
Read that again. Decades of top-down planning, restricting what people actually want (like single-family homes with a yard, or the ability to drive their own car efficiently) and subsidizing what they don't, has led to the opposite of its stated goals. Housing is less affordable, and mobility can be worse despite billions spent on transit modes few choose to use for most trips.
Houston, for all its imperfections, has largely avoided this kind of ideological, restrictive planning when it comes to land use. Our "plan" has largely been to allow the market to respond to demand. And what do you know? We're a top destination for people seeking opportunity and a better quality of life, with housing that, while not immune to national trends, remains far more attainable than in heavily regulated, "planner-paradise" metros. Coincidence? I think not.
The advantages of no-zoning in Houston, The Economist on Dallas, Chicago's fiscal warning
Clearing more from the smaller items backlog this week:
No-Zoning Flexibility (and Complications): The Houston Landing recently explored Houston's lack of traditional zoning (with a leftist bias, of course). While acknowledging it adds some complexity (requiring deed restrictions, etc.), experts cited in the piece note the significant flexibility it provides, contributing to our ability to adapt and grow more dynamically than zoned cities. It reinforces that our system, while different, has tangible benefits.
Houston's No-Zone Recipe Keeps Housing Affordable: Hat tip to Barry Klein for sending The Daily Economy piece that summarizes Houston's success. Judge Glock highlights how our unique approach allows the market to respond quickly to demand, preventing the kind of artificial scarcity and price spirals seen elsewhere. The key elements? No zoning, minimum lot size reform, and a responsive development community. It's a recipe other cities could learn from.
Chicago's Fiscal Woes - A Cautionary Tale: This NYT Opinion piece details the severe fiscal challenges facing Chicago and Illinois, largely driven by pension debt. It's a stark reminder of the importance of fiscal discipline and realistic accounting for long-term liabilities – lessons Houston and Texas have generally taken to heart, contributing to our healthier financial position compared to many older northern cities.
The Economist: Dallas: Utopia for the Trump-curious CEO - The Texan city embodies the allure of small government. The description definitely sounds similar to Houston:
"The city boasts an enviable standard of living. Scorching summers are a small price to pay when a typical house costs a fifth less than in Austin and half as much as in San Francisco. “You don’t need to know some secret handshake to get your kid into a private school,” gushes a banker. Co-workers raise eyebrows when you do not go to your child’s 2 o’clock school play, marvels another.
Best of all, enthuses a venture capitalist, Dallas is “unabashedly American” in its embrace of meritocracy and free enterprise. “If you are successful, any prejudice melts away,” agrees a CEO. The result is a virtuous circle. Business begets growth, growth brings people, people draw restaurants, culture and buzz"
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.
A simple solution to help Houston traffic, our tax-debt-spend problem, HSR bankrupted Japan, Austin builds towards affordability, METRO comedy!
Just a few small items this week:
Charles Blain in City Journal: Saddled With Taxes and Debt - Houston-area leadership is losing touch with the fiscal restraint and pragmatism that made the city an engine of growth.
"I worried from afar that my hometown would meet the same fate as San Francisco, the poster child of the housing shortage and all its associated woes. I feared that Austin would become known as a playground for the rich, a city where displacement and mind-boggling home prices marred the natural beauty that once made it such a draw. In my hand-wringing, though, I'd overlooked one crucial detail: Texas is better at building homes than almost anywhere else in the country.”
There are differences between Austin (and Texas) and San Francisco that, if not changed will continue to make it possible to build in Austin (and Texas) and nearly impossible in San Francisco (and California). Unincorporated county territory in Texas is unzoned. That means that, barring environmental difficulties, developers and builders can build. By contrast, in the San Francisco metro, and virtually all of California, draconian state and local regulations make it very difficult to build on greenfield sites, where land prices would be much lower if the market were permitted to operate."
Caught my eye from Y-Combinator Demo day: XTraffic
What it does: Reduces congestion and accidents with smart traffic lights
Why it’s a fave: Controlling traffic lights with AI sounds like the perfect application of this technology. XTraffic says that it’s already doing it in several cities in Texas. I hope they make it to my town in California, too, because I sure am tired of waiting for the light to turn green when there are no other cars around.
"I would be the first to argue that if an economist claims to know of a cure-all policy — a reliable way to relieve a long list of social ills in one fell swoop — common sense tells you to stop listening.
So it is awkward for me to declare that I know of something close to a panacea policy: one big reform that would raise living standards, reduce wealth inequality, increase productivity, raise social mobility, help struggling men without college degrees, clean the planet and raise birth rates. It’s a sweeping reform that Democrats and Republicans, progressives and conservatives could all proudly support.
The panacea policy I have in mind is housing deregulation. Research confirms that there are large benefits in saying yes to tall buildings, yes to multifamily structures, yes to dense single-family development and yes to speedy permitting. The growing YIMBY (Yes In My Backyard) movement already has high-profile wins in Minnesota, Oregon, California and beyond, but even YIMBY devotees rarely appreciate the scope of the merits of loosening rules on housing.
The economic argument for housing deregulation rests on basic supply and demand principles: allowing more construction leads to lower prices. This is evident in historical data, showing that housing prices were relatively stable before stricter regulations in the 1970s, while rising significantly afterwards.
Housing deregulation would directly improve the standard of living by significantly lowering housing costs, which currently represent a significant portion of the average American's budget.
The distributional effects of deregulation would be impactful in reducing wealth inequality, as rising home values have been a key driver of the growing disparity between the rich and the poor.
Deregulation would enhance social mobility by removing barriers to moving to higher-wage areas. Current strict regulations often make the cost of living in such regions outweigh any potential wage gains, discouraging relocation for many.
Deregulation would create numerous job opportunities in the construction sector, a large and well-paying industry, particularly benefiting men without college degrees, who have faced challenges in the job market.
Environmental protection is a common rationale for restricting construction, but deregulation can actually lead to more sustainable practices by encouraging denser housing in urban areas, resulting in lower carbon emissions.
While concerns exist about homeowner resistance, the bigger obstacle to deregulation is public misunderstanding of basic economic principles, with many believing that increased housing supply will not lead to lower prices.
Neither Democrats nor Republicans have embraced housing deregulation yet. YIMBY activists lean left, but they are only one voice in the progressive coalition. Republican states usually have less housing regulation, but more from tradition than from principle. Yet, given housing deregulation’s many demonstrated benefits, this policy agenda deserves bipartisan support. Democrats should cheer the effects on equality, social mobility and the environment. Republicans should be delighted to see free markets spreading broad prosperity, creating new working-class opportunities and fostering family formation. In a rational world, the panacea policy of housing deregulation would be a done deal. Hopefully whoever wins the next election will agree."
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."
"More than 25,000 establishments relocated to Texas from 2010 to 2019, bringing more than 281,000 jobs with them and resulting in a gain of nearly 103,000 jobs for the state, data compiled by the Federal Reserve Bank shows.
The report said Texas appeals to relocating businesses for a variety of reasons, including its central location in the continental U.S., access to multiple large cities and business-friendly environment...
However, research from the Federal Reserve Bank of Dallas found that attractive economic fundamentals — like low taxes, low regulations, a growing population, a relatively lower cost of living and less union activity — are far more important than incentive packages when businesses make location and expansion decisions."
Salim Furth at Mercatus: "How much are #Houston's different lot sizes in different eras showing up in real houses for real people? Here are single family houses built in the 22 years before reform, and the 22 years after - same scale." When minimum lot sizes shrank, a whole lot more small-lot houses got built because that's what the market wanted.
"Founded in Houston, Cart moved its headquarters to Austin in 2021, only to return to Houston in November.
The company moved to Austin to hire software developers, says co-founder Remington Tonar. But Cart is a logistics company as well as an e-commerce services provider, and its leaders found the company’s rapid growth required a bigger city with a larger and more diverse talent pool, including skills that go beyond just software development.
“If I’m looking for front-end software devs who can build beautiful tools to perform one task, a place like San Fran or Austin may be better,” says Tonar. “But if I need people who can integrate digital and physical systems, Houston is a lot more attractive, because people are coming out of logistics and energy.”
Google optimizing traffic signals, idea for HTX office to residential conversions, Why Texas is Becoming America's Most Powerful State, NYT on Houston winning vs homelessness, and more
Just catching up on some backlogged smaller items this week...
"Google AI models that can autonomously optimize the traffic timing at that intersection, reducing idle times as well as the amount of braking and accelerating vehicles have to do there."
And I'd be happy to help get METRO on a better path while they're at it?...
WSJ: America’s Downtowns Are Empty. Fixing Them Will Be Expensive. - Lonely sidewalks and closed storefronts inspire proposals to recast office districts into neighborhoods where people live, work and raise families. A chart shows over 25% of downtown Houston's office space is vacant and only 7.5% of it could be easily converted to residential. A Hines exec at a GHPartnership event last week said that: converting empty offices to residential creates Class B apartments that don't pencil out. But maybe Habitat for Humanity could make that equation work with volunteer labor for affordable Class B condos?
"Dallas officials were prickly when I toured their city and asked them pointedly why Houston was doing better...
The lesson I take from Houston and Dallas is that success doesn’t come from repeating bromides about how housing is a human right; homelessness is indifferent to earnestness but does respond to hard work and meticulous execution. Houston has succeeded because it has strong political leadership that gathers data, follows evidence and herds nonprofits in the same direction. It is relentless."
Finally I'll end with this really well-done video on the population, economic, and energy boom in Texas, which is on track to pass California by the 2040s: Why Texas is Becoming America's Most Powerful State
Missing middle land use reform in HTX, Austin copying Houston min lot sizes, surveying home preferences, mapping zoning authority by state, distressed offices, and more
Some smaller items this week:
Who Zones? Mapping Land-Use Authority across the US. TX, OK, and AL are the only states that don't let unincorporated counties zone, which is very good for housing supply and affordability. Hat tip to George.
Vox: The future of cities, according to the experts - Cities aren’t going anywhere, but they do need to change. This is all over the place. “Cities are fine without families but should work to attract families.” 🙄 I do buy the argument young singles want vibrant cities, but I don’t buy the old empty nesters argument - they prefer to stay in place and have plenty of room for the grandkids to visit, not cram themselves in a 1 bedroom apartment downtown.
"Among the 68 Houston-area office properties included in the Business Journals analysis, 57 were flagged for performance issues or concerns over a borrower's ability to stay current on their mortgage."
"Reducing minimum lot sizes has worked elsewhere in Texas to boost housing construction. Houston has significantly increased its housing supply since cutting its minimum home lot size from 5,000 to 1,400 square feet in 1998. The policy change has allowed almost 80,000 new homes to be built on these smaller lots."...
"The Austin resolution draws important lessons from the Houston case that small lot single-family is something that's proven to work well for homebuyers and home builders,"
Affordable Sprawl vs. Costly Walkability. A better survey question would be, “Would you rather live in a large, affordable home with space between you and your neighbors but with multiple stores and other shops competing for your business with a wide selection of low-priced goods within easy driving distance, or would you prefer a smaller but much more expensive home with little space between you and your neighbors but with a limited selection, high-priced grocery store and a few restaurants and cafes within walking distance?” That would definitely be a more accurate description of reality.
Strong Towns is a weird urbanist cult + Tokyo's Houston-like minimal land use regulation
Strong Towns is a weird urbanist cult that can’t produce hard numbers to back up their assertions suburbia is financially unsustainable (how many suburban municipality bankruptcies have you heard of?). If you really think about it, every suburban home has a few tens of thousands of dollars of city infrastructure that go with it (some pavement and pipes), a very reasonable replacement burden from property taxes spread over 30+ years on a multi-$100k home (and most infrastructure will not need to be replaced that often).
“A municipality deep in decline, facing decaying infrastructure and accelerating poverty can hardly afford lengthy legal battles.”
The metro is booming. The City has challenges but is doing ok, especially vs. many other similar-sized municipalities. The accelerating poverty comment is flat-out wrong – immigrants move here, make a life, and move up and out to the suburbs to be replaced by a new wave of immigrants. And many parts of town are positively booming. Property values move up every year and the City laments the tax cap forcing them to cut the tax rate to keep overall revenue at inflation + population growth – does that sound like “accelerating poverty”? 🙄
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A couple of interesting pieces on Tokyo this week along with some excerpts I pulled.
"The median Japanese tenant spends about 20% of their disposable income on rent (in America it's 30%). Rent for a studio or one-bedroom apartment in Tokyo, which Americans are fawning over as "the new Paris," is a quarter of what it is in New York.
In September, when New York City Mayor Eric Adams unveiled his plan to build 100,000 new homes, he pointed enviously to Tokyo's ability to keep "housing costs down by increasing the supply of housing." "How are we allowing Tokyo to do things better than us?" he asked."
...
"Most American consumers probably wouldn't want to live in the studio or one-bedroom apartments that Japanese people just sort of take for granted," Schuetz said. But, she added, we shouldn't have many of the minimum size regulations we have. Instead, we should let consumers decide what tradeoffs they're willing to make. "Allow the market to build stuff, and the market will figure out what people are willing to pay for," she says.
"As housing prices have soared in major cities across the United States and throughout much of the developed world, it has become normal for people to move away from the places with the strongest economies and best jobs because those places are unaffordable. Prosperous cities increasingly operate like private clubs, auctioning off a limited number of homes to the highest bidders.
Tokyo is different.
In the past half century, by investing in transit and allowing development, the city has added more housing units than the total number of units in New York City. It has remained affordable by becoming the world’s largest city. It has become the world’s largest city by remaining affordable.
...
But the benefits are profound. Those who want to live in Tokyo generally can afford to do so. There is little homelessness here. The city remains economically diverse, preserving broad access to urban amenities and opportunities. And because rent consumes a smaller share of income, people have more money for other things — or they can get by on smaller salaries — which helps to preserve the city’s vibrant fabric of small restaurants, businesses and craft workshops. (sound familiar? ;-)
...
In Tokyo, by contrast, there is little public or subsidized housing. Instead, the government has focused on making it easy for developers to build. A national zoning law, for example, sharply limits the ability of local governments to impede development. Instead of allowing the people who live in a neighborhood to prevent others from living there, Japan has shifted decision-making to the representatives of the entire population, allowing a better balance between the interests of current residents and of everyone who might live in that place. Small apartment buildings can be built almost anywhere, and larger structures are allowed on a vast majority of urban land. Even in areas designated for offices, homes are permitted (this is one of my easy recommendations for traditionally zoned cities). After Tokyo’s office market crashed in the 1990s, developers started building apartments on land they had purchased for office buildings.
“In progressive cities we are maybe too critical of private initiative,” said Christian Dimmer, an urban studies professor at Waseda University and a longtime Tokyo resident. “I don’t want to advocate a neoliberal perspective, but in Tokyo, good things have been created through private initiative.”
This new report examines the housing trends that are driving today’s migration of people and jobs, and suggests a strategy that better fits the aspirations of most Americans.
It includes my sidebar on Texas' winning approach to housing supply and affordability, which I'm including in full below for this week's post:
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Texas, renowned for its vast landscapes and independent spirit, has adopted a unique approach to housing development and affordability that sets it apart from many other states. Embracing a decentralized and market-driven approach, Texas utilizes three key strategies to keep housing plentiful and affordable:
Texas does not grant counties restrictive zoning authority (only cities)
Texas enables municipal utility districts (MUDs) to finance development
Texas encourages the competitive growth of private master-planned communities
This distinctive approach has numerous virtues that contribute to a flourishing housing market that is significantly more affordable than most states.
Texas does not grant counties restrictive zoning authority
Texas stands out among states by not granting zoning authority to counties, preferring a decentralized system that places greater power in the hands of property owners and developers. This approach fosters innovation, flexibility, and adaptability in housing development. Developers have the freedom to respond to market demands efficiently, resulting in a more diverse range of housing options that can cater to various income levels and preferences. By not having zoning authority, developers are able to build homes and apartments without the restrictions that are often imposed by local governments. This has allowed Texas to build more homes and apartments than other states, which has helped keep housing prices down.
Instead of traditional zoning, neighborhoods are protected after development by private deed restrictions attached to the land and enforced by home-owner associations (HOAs).
Texas enables municipal utility districts (MUDs) to finance development
Municipal Utility Districts (MUDs) play a crucial role in financing development in Texas. MUDs are special governmental entities that provide essential infrastructure, such as water, sewer, and roads, to new communities. They issue tax-exempt bonds to finance these infrastructure projects, which are then repaid by homeowners through property taxes or utility fees. This financing mechanism allows developers to build necessary infrastructure upfront, expediting the development process and reducing risk and financial burdens on local governments.
Like cities, MUDs build and operate water, sewer and drainage facilities; enforce water and sewer rules; enforce deed restrictions; collect garbage; hire law enforcement officers to protect MUD property; buy and sell water rights; finance roads and firefighting facilities; use the power of eminent domain on a limited basis; and own and operate parks and recreational facilities. They have shown themselves capable of providing high levels of service for everything from wastewater and solid waste treatment to flood control and emergency services.
MUDs are tightly regulated by the Texas Commission on Environmental Quality, and they are subject to the same laws as cities and counties with respect to open meetings, open records, public bids, nepotism, elections, public official ethics, attorney general approval of bonds, investment of public funds, setting debt service and maintenance tax rates, limitations on expenditures of public funds, and conflicts of interest.
By leveraging MUDs, Texas promotes the timely development of new communities and the expansion of existing ones. This approach not only ensures that residents have access to essential services from day one but also encourages developers to create well-planned communities with amenities demanded by the market. The ability to finance infrastructure development independently contributes to the overall affordability of housing in Texas, as the cost burden is shared among residents over time, rather than being shouldered entirely by developers or taxpayers.
“MUDs have been crucial in allowing an adequate housing supply and keeping home prices lower than in other high-growth states. Without MUDs, or some other means of financing local infrastructure to accommodate a rapidly expanding population and escalating housing demand, new-home construction would be severely limited and much more expensive and overall housing costs would escalate. That’s what happened in such high-growth areas as California and Florida, where supply was constrained by local infrastructure development and highly restrictive, costly land-use regulations.”
- Dr James Gaines, chief economist of the Real Estate Center at Texas A&M University
Texas encourages the competitive growth of private master-planned communities
Texas is renowned for its thriving master-planned communities, which offer an enticing combination of amenities, housing options, and quality of life. These communities, developed by private entities utilizing MUDs for infrastructure financing, compete to attract homebuyers by providing well-designed neighborhoods, recreational facilities, parks, and commercial centers. By focusing on a comprehensive approach to community development, master-planned communities foster a high quality of life and a sense of belonging.
The competitive nature of these developments promotes efficiency and innovation, resulting in a wide range of housing options to suit different budgets and lifestyles. From affordable starter homes to luxury residences, master-planned communities provide diverse opportunities for individuals and families to find their ideal living arrangements. The competition between these developers has helped keep prices down and quality up.
In summary, Texas’ approach to housing development and affordability is unique in that it allows developers more freedom than other states. By not giving counties zoning authority, developers are able to build homes and apartments without the restrictions that are often imposed by local governments. Municipal utility districts (MUDs) also play an important role in Texas housing development by providing infrastructure funding without requiring upfront payment from developers. Master-planned communities have also contributed to Texas’ success in housing development by competing fiercely with one another to offer a variety of amenities at an affordable price. These are the three essential elements of Texas’ housing competitive advantage.
METRO $ needs to support higher City priorities, dropping fertility rates, updated home affordability, better bike safety, and tragic land-regulation consequences in Maui
Summer blog break is over and I'm back! Quite a few backlogged items:
Research shows that higher population densities mean lower fertility rates. High housing prices also lead to lower fertility rates. Further research shows that “living in spacious housing and in a family-friendly environment for a relatively long time leads to higher fertility.”
In short, if you think that preventing demographic collapse is a good thing, then this becomes one more reason to oppose planners who want to densify American cities. Planners’ efforts to force more people to live in apartments or smaller homes by making housing artificially expensive could be the downfall of the American economy.
2023 Demographia US Housing Housing Affordability Study released. Houston is worsening but still better than most of the country, and I think our home price-to-income ratio may be temporarily skewed upward. With high mortgage rates, I think more of the middle and working class are out of the market, so recent sales skew wealthier (not to mention they make up more of the remote/hybrid work employees willing to upgrade moving farther out) – people who might be selling an existing home and paying cash for a new one (or at least a very substantial down payment). This would skew the home price-to-income ratio to make Houston look more unaffordable than it really is.
Tragic unintended consequences: Hawaii restrictive land-use law -> reduced housing supply -> skyrocketing prices -> drives away farm labor -> farms bankrupted with flammable grasses left behind instead of fire-resistant native or agricultural plants -> deadly fires in Maui.
Rather than create an illusion of safety with bike lanes that increase congestion, bicycle advocates should focus on programs, such as improved intersection designs, that actually do make bicycling safer without necessarily hampering auto driving. Unfortunately, too many city planners and bicycle groups are stuck in the “automobiles are evil” mentality and anything that hurts autos is regarded as a win for bicycles even if it results in more bicycle riders being injured or killed.
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.
