Houston #1 std of living confirmed, #2 F500 HQs, higher speeds = higher incomes, screwy city metrics, and more
Continuing to work through the summer backlog of smaller items...
"Demographer Wendell Cox’s recent estimates of U.S. housing affordability found unaffordable housing in Dallas, Houston, and other Texas cities that have historically been quite affordable. In a post about housing issues, I noted that Cox’s home price data were based on real estate transactions while the Census Bureau numbers are based on a cross-section of all homes in a region.
Before the pandemic, median real estate transaction prices were only 2 or 3 percent higher than Census Bureau values, indicating that people buying homes represented a good cross-section of America. In 2021, median real estate sale prices were at least 20 percent higher than Census Bureau values. As the recent real estate boom is driven by people who have discovered they can work remotely, which means people of above-average incomes, price-to-income ratios based on real estate transactions overestimate the true value-to-income ratios.
The 2022 data from the Census Bureau confirm this. The data show that the value-to-income ratio was 3.9 for the city of Houston and 3.2 for the Houston urban area. These are a lot lower than the 4.7 in Cox’s paper."
"Houston has the title of second most popular headquarters city for Fortune 500 firms... with 22 of them headquartered in the city...
What makes Texas, or Houston for that matter, so appealing for corporations? Mostly the low cost of living and lack of taxes on businesses. Even Exxon has tightened its belt in the inflationary age, though, shedding its “God Pod” and consolidating its upper management’s formerly exclusive luxury suite into its preexisting Houston campus."
"faster cities are faster because they have more roads and are lower in density (which they describe as have a “larger land area”); and that those roads produce benefits by allowing faster top speeds more than by reducing congestion...The authors conclude that cities that want to increase speeds (and, by stated implication, worker incomes) should build more roads. While it admits that won’t be possible in Bangladesh, it should be possible in most cities and countries. Even if, as the anti-road people argue, building more roads simply leads to more driving, building roads that are faster leads to higher overall speeds which should produce enormous economic benefits."
Labels: affordability, growth, headquarters, home affordability, mobility strategies, rankings, transit, world city
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.
- New Orleans Dismantles Bike Lanes:
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.
Labels: affordability, crime reduction, density, fertility, home affordability, land-use regulation, Metro, mobility strategies
More on METRO's Uptown BRT failure, wealth moving south, forensics reality, TX beating CA on homelessness, and more
A few smaller items this week:
- More on Houston's BRT Failure with the Uptown Silver Line. Yet they're just going to pretend it didn't happen and plow ahead with the $1.5B Universities BRT line reducing Richmond to one lane each direction?!? 😠
"A Houston bus rapid transit route over dedicated bus lanes is attracting less than 10 percent of the riders that were projected for it. The Silver Line opened in August 2020 with the expectation that it would carry 14,850 weekday riders, but in fact it is carrying less than 900 riders per weekday, about 6 percent of projections...
One reason why ridership is low is that the line is slow. Schedules say that it takes 27 minutes to go 4.7 miles, which is an average of 10.4 miles per hour. The city’s regular local buses go much faster than that. Metro must have missed the memo that setting aside dedicated lanes to bus rapid transit is supposed to make the buses go faster, not slower.
This is just another example of why transit agencies shouldn’t spend hundreds of millions or billions of dollars on fixed transit infrastructure. No one can accurately foresee future transportation patterns, so relying on forms of transit that can be kept flexible — meaning buses sharing lanes with other traffic — is the safest and most cost-effective way to go."
"In the last decade, the number of people who are homeless in California has soared, rising more than 40%. Meanwhile, in Texas, they're seeing the opposite trend, with homelessness dropping by nearly a third."
“The numbers tell the story. For the first time, six fast-growing states in the South — Florida, Texas, Georgia, the Carolinas and Tennessee — are contributing more to the national GDP than the Northeast, with its Washington-New York-Boston corridor, in government figures going back to the 1990s. The switch happened during the pandemic and shows no signs of reverting.”
"Jews and Israelis who may feel uncomfortable at the rise of anti-Semitic sentiments among those in New York and California might find solace in states like Texas. Despite rising attacks and hate crimes on both sides of the American coast, the Lone Star State has remained unabashedly pro-Israel and open to business for those looking to relocate or expand their companies.
“People just love Israel here,” explained Toba Hellerstein, Executive Director of the Texas-Israel Alliance. “They just love Israelis, love Israel, and Israelis will come here and feel like they're rockstars… There is a real romanticism, whereas in other states you have some ideas around Israeli startups and also have political reasons that make them less interested in working with Israel, in Texas you don’t have that.”
Labels: aviation, crime reduction, homelessness, Metro, migration, perspectives, transportation plan
How Houston beats NYC for the middle class
I recently discovered this 2008 City Journal piece by noted urbanist Ed Glaeser comparing NYC and Houston, and despite being 15 years ago the points are still valid, if not even more so. I highly recommend reading the whole thing, but here are my favorite, albeit still extensive, excerpts:
Edward L. Glaeser: Houston, New York Has a Problem
The southern city welcomes the middle class; heavily regulated and expensive Gotham drives it away.
New Yorkers are rightly proud of their city’s renaissance over the last two decades, but when it comes to growth, Gotham pales beside Houston. Between 2000 and 2007, the New York region grew by just 2.7 percent, while greater Houston—the country’s sixth-largest metropolitan area—grew by 19.4 percent, expanding from 4.7 to 5.6 million people. To East Coast urbanites, Houston’s appeal must be mysterious: the city isn’t all that economically productive—earnings per employee in Manhattan are almost double those in Houston—and its climate is unpleasant, with stultifying humidity and more days with temperatures exceeding 90 degrees than in any other large American city. So if those two major factors in urban growth don’t explain Houston’s success, what does?
Houston’s great advantage, it turns out, is its ability to provide affordable living for middle-income Americans, something that is increasingly hard to achieve in the Big Apple...
Housing prices are the most important part of Houston’s recipe for middle-class affordability...
To understand what kind of houses these are, go house-hunting on the Web. In Houston, you’ll find a lot of nice places listing for $175,000, and they’ll probably sell for about 10 percent less, or $160,000. These are relatively new houses, often with four or more bedrooms. Some have over 3,000 square feet of living space, swimming pools, and plenty of mahogany and leaded glass. Almost all seem to be in pleasant neighborhoods—a few are even in gated communities. The lots tend to be modest, about one-fifth of an acre, but that still leaves plenty of room for the kids to play...
You thus get much more house in Houston and pay a lot less for it. This chasm would be just as big if you compared Houston with Los Angeles, where the average house price is a whopping $613,000. Small wonder Houston looks so good to middle-class Americans.
It looks even better once you take taxes into account...
Just as with housing, however, there’s a significant difference in the quality of transportation in Houston and New York. In Houston, the middle-class breadwinner likely will drive an air-conditioned car from an air-conditioned home to an air-conditioned workplace, and take 27.4 minutes to do it, on average. Commuting via New York public transit is more complicated. If you live in Queens, the average commute to midtown Manhattan (if that’s where you work, as we’ll say) is 42 minutes, and longer if you’re coming from Far Rockaway. From Staten Island, the average commute is 44 minutes—and often something of a triathlon, with bus, ferry, and subway stages. Our middle-class New York commuter thus spends at least 120 more hours in transit per year than does his Houston counterpart. And except perhaps for the ones spent on the ferry, none of those hours is as agreeable as sitting in an air-conditioned car listening to the radio...
After housing, taxes, and transportation, the New Yorkers have $26,000 left. The Houston family has $30,500, and those dollars go a lot further than they would in New York...The Houston family is effectively 53 percent richer and solidly in the middle class, with plenty of money for going out to dinner at Applebee’s (??? what Houstonian does this?!🙄) or taking vacations to San Antonio. The family on Staten Island or in Queens is straining constantly to make ends meet.
Don’t forget education. Ordinary public schools would be comparable in Houston and on Staten Island, with average SAT scores of about 950. The Houston family, though, has the option of moving to a slightly more expensive school district, like Spring Branch, which has an average SAT score of 1070, better than that in many New York suburbs...
True, New York boasts fantastic cultural advantages, hip downtown neighborhoods, and pleasures you can enjoy even if you don’t have much cash in your pocket—museums, parks, architecture. But the fact remains that living in Houston on $60,000 a year means a high-quality, spacious home, an air-conditioned commute, low local taxes, education options, and a decent amount of spending money left over. Living in New York City on $70,000 a year means a smaller, older home, a long and arduous commute, higher local taxes, fewer educational alternatives, and scrimping every day. For many middle-class families, at least those with kids, the amenities will be no substitute for a more comfortable life. In a sense, the real surprise isn’t that so many middle-income families are putting down roots in Houston (and in other fast-growing cities with similar characteristics, such as Atlanta and Phoenix); it’s that any of them remain in New York...
And the unavoidable fact is that New York makes it harder to build housing than Chicago does—and a lot harder than Houston does. The permitting process in Manhattan is an arduous, unpredictable, multiyear odyssey involving a dizzying array of regulations, environmental and otherwise, and a host of agencies. Then developers must deal with neighborhood activists and historical preservationists. Any effort to build in one of New York’s more attractive, older communities would almost certainly face strong opposition from the Landmarks Preservation Commission.
A further obstacle: rent control. When other municipalities dropped rent control after World War II, New York clung to it, despite the fact that artificially reduced rents discourage people from building new housing. As New York owners converted rental units into coops to escape the price controls, the city then turned to public housing to solve the problem of housing the poor. The city’s strange policy remains to try to increase the (modest) number of subsidized apartments rather than opening the market to more development, which would significantly increase the overall supply of housing at all price levels.
Houston, by contrast, has always been gung ho about development...
Indeed, the city is unique in America in not having a zoning code. Many deeds include land-use restrictions of various kinds, true, but these are voluntarily chosen by developers, not decided on high by government bureaucrats. Occasionally, groups rally to try to institute zoning regulations, but the growth machine invariably beats them back, often supported by some of the poorest people in the city. Houston’s builders have managed—better than in any other American city—to make the case to the public that restrictions on development will make the city less affordable to the less successful...
But Houston’s success shows that a relatively deregulated free-market city, with a powerful urban growth machine, can do a much better job of taking care of middle-income Americans than the more “progressive” big governments of the Northeast and the West Coast.
Labels: affordability, development, growth, home affordability, zoning
Houston has less kludge and more opportunity, the value of mobility, and more
A few misc items this week:
"It is a great oasis of opportunity, especially for the immigrants, legal and otherwise, who end up there, stay, and prosper. There is a sizeable and successful Vietnamese population, Chinese too. The Hispanic community continues to grow and advance. A construction friend of mine once said, the new arrivals take any job because they can't speak English. Five years later they do and are foremen. In 10 they have their own company. Houston has a wealthy elite that gives unstintingly to its educational and cultural institutions and a great deal to its non-governmental help agencies. One I got to know helped released prisoners transition into work and careers with astonishing success statistics. Denominational schools like Corpus Christi and Strake Jesuit Strake do great work prepping minorities for college. The list goes on. And, Houston is resilient. It always rebuild, usually better."
"We are now retired in Austin (family ties) but despite its airs of superiority, Houston is better. It has what more of what I term real people not pretenders. The attractions there are better, museums, restaurants, entertainment, etc. Along with the real people, the sort of people I grew up and worked with."
“The answer for Houston, as in so many urban places imperiled by inadequate planning and a changing climate, seems to amount sadly to this: We hold our breath, and hope for the best.”
"For such a an awful place, it sure is curious how the Houston metropolitan area continues to be one of the fastest growing in the nation. Hmm. The real canard here is the foolish, unfounded belief that urban planning would make any difference when natural disasters occur. Urban planners are low rent civil servants whose livelihoods are dependent upon the largess of the politicians to whom they answer. The politicians, in turn, serve the greed of the rich and powerful, or respond to the ever changing whims of an ignorant populace. Who is to say which is worse? So, don’t pretend, for even an instant, that urban planning is a solution. Like central planning everywhere and every when, urban planning merely guarantees misallocation of capital and resources."
"Ah, the mystery of why people want to live in a city that is prospering, even though it hasn’t been adequately planned by experts in planning and is now susceptible to natural disasters like real hurricanes—unlike, say, New York City, where American zoning was invented but which, nevertheless, had to struggle through a “superstorm”."
"I look forward to reading the book; the review hits on many of the negatives of the city, it's hot, wet, sprawling, mosquitoes, snakes, etc... I'm a life long Houstonian, born and raised in the Bayou City, all those negative qualities do exist but people keep moving to the city. Why? The primary reason is opportunity. All of these opportunity seekers have a hard working, can do, personality, which gives Houston it's magic."
"Lived in Houston 30 years. Loved it! The Texas Medical Center is a treasure. The variety of restaurants and cross section of people from across the world is unequaled. No one cares where you came from, what school you attended who your parents were…just can you do the job. Houston is about “doing bidness”."
To conclude, a segment so good from Bob Poole in Reason's most recent Surface Transportation Innovations I decided to include it in full (highlights mine). It's directly relevant to my concept of Opportunity Zones.
Access to Jobs: New Research on Driving and Transit
Readers of this newsletter may recall prior articles reporting on “access to jobs” studies carried out by researchers at the University of Minnesota. The broad conclusion of the series of studies is that in the 50 largest U.S. metro areas, a commuter can reach vastly more jobs in a given number of minutes via driving than by using transit. That is generally due to the dispersed locations of residences and employers. There is also a growing body of international research on the impact of journey-to-work time (or travel speed) on the economic productivity of metro areas.
I’m therefore pleased to report on a new working paper from the National Bureau of Economic Research that provides new findings on this subject. “More Roads or Public Transit: Insights from Measuring City-Center Accessibility,” by Lucas J. Conwell, Fabian Eckert, and Ahmed Mushfiq Mobarak was published in Jan. 2023 as NBER Working Paper 30877.
The authors’ innovation is to define “accessibility zones” surrounding the central business districts of the 109 largest U.S. and European cities. For each city, the study defined a set of car accessibility zones and transit accessibility zones. In keeping with established research on a metro area’s economic productivity, a premise of the study is that larger accessibility zones are associated with greater productivity. One broad finding is that compared with European cities, on average U.S. cities are twice as accessible by car as European cities, but are half as accessible by transit. This is obviously due to the much greater density of European metro areas compared with largely suburbanized America, and the corresponding differences in roadway networks and transit systems between the United States and Europe.
To simplify the modeling, the researchers divided commuting times into four groups: 0-to-15 minutes,16-to-30 minutes, 31-to-45 minutes, and 46-to-60 minutes. They defined the central business district (CBD) as the area with the highest economic productivity in the metro area and drew a 1-kilometer radius circle around the defined center. The median U.S. central business district accounted for 28% of all the employment within a 20-kilometer radius. They used Google Maps to construct the accessibility zones, using it to find the car or transit travel time to the CBD from any point in each land parcel. All the land parcels that enable a trip to the CBD in 15 minutes or less make up the 15-minute accessibility zone, and so on up to 60 minutes.
One of the most interesting results is that although Europe’s transit accessibility zones are all larger than those of the U.S., “car travel offers larger overall accessibility across all time distances in both Europe and the U.S.” And that means that “U.S. cities enjoy greater accessibility overall because they have a comparative advantage in car-based commutes.” One reason for this is that, especially for longer-distance commutes, transit provides only “patchy” access. By contrast, car commuters can use a comprehensive roadway network that directly connects every point A to every point B. But that does offer an advantage to bus transit over rail transit.
Although the authors mention in their introduction that larger accessibility (via more possible trips within a given time frame) leads to greater economic productivity, their paper does not attempt to quantify the potential economic benefits of U.S. cities’ much greater accessibility. They do briefly discuss the limited impact that could be expected from “densification” policies. And of course, they discuss how “US cities’ car orientation comes at the cost of less green space, more congestion, and worse health and pollution externalities.” Assuming vehicle electrification continues, the health and pollution impacts should decrease in the coming decades. Also, with greater use of road pricing, urban traffic congestion can be reduced.
While this study would be even more impressive with quantified economic productivity estimates, it should help transportation planners think through trade-offs between highways and transit in the coming decades.
Labels: affordable proximity, economic strategy, entrepreneurship, homelessness, land-use regulation, mobility strategies, perspectives, resilience, transit, zoning
Induced Demand debunked
I've wanted to write for a while about "induced demand", the specious argument that expanded roads just fill up with new traffic so why should we bother?
Two articles below debunk the induced demand argument in their own ways, but here's my own TL;DR summary: Which type of infrastructure should government invest in: transit almost nobody will use, or lanes everybody will use? Induced demand is a false argument. Nobody says "don't build a new airport terminal or runway - it will just fill up with new flights" or “don’t build a new port terminal – it will just fill up with ships” (🙄 eye roll)
The first is from the well-known Matthew Yglesias: What does "induced demand" really amount to? - We should build infrastructure that people use. Key excerpts:
"The New York Times recently did a big feature grounded in induced demand theory headlined “Widening Highways Doesn’t Fix Traffic. So Why Do We Keep Doing It?” which skirted around the kind of obvious answer that we do it because it lets more people drive to more places.
In other words, I think the idea of induced demand is just somewhat less paradoxical than people make it out to be.
Consider the traffic impact of a mass transit project rather than highway widening. In the aforementioned Los Angeles, a project is currently underway to extend the little stump of a purple line in the map below and extend it west to Beverly Hills, then down Wilshire Boulevard into Santa Monica and to the Pacific Ocean. This may never happen due to the usual litigation and delays, and it’s conceivable that once completed the project will be a low-ridership white elephant. But let’s stipulate that it gets built and that lots of people take advantage of this transit option.
Well, what happens next?
• Some of the people riding the new Wilshire Metro will be making trips they wouldn’t otherwise have made, taking advantage of new opportunities and making their life better.
• Some of the people riding the new Wilshire Metro will be making trips they otherwise would have made by car, reducing traffic.
• But now that there’s less traffic, some people throughout Los Angeles will make trips they otherwise would not have made due to fear of traffic jams, bringing the system back to congested equilibrium.
In other words, “Ambitious Mass Transit Projects Don’t Fix Traffic. So Why Do We Keep Doing Them?” ...
But “inducing” extra demand would be part of the point — the only thing worse than a new highway project that only causes people to drive more would be a new highway project that didn’t cause people to drive more and wasted a bunch of money."
Most new demand on expanded roads comes from new population, new employment and economic activity (some or all of which may have been attracted by enhanced transportation infrastructure), traffic rerouted from neighborhood streets or congested roads, or travel that has shifted in time to the benefit of the traveling public now that more capacity is available to undertake activities during desired travel times.
...
Since approximately 2005, U.S. vehicle travel per person has not grown and the amount of travel on roads with newly increased capacity attributable to additional or longer induced trips is likely modest. The National Household Travel Survey documents declining trip rates as telework, e-commerce, and other communications substitution opportunities further dampen travel demand growth pressures, particularly for urban households. If travel expanded to fill all capacity, we would not have any low-volume highways.
More importantly, characterizing induced travel as bad or wasted is a misrepresentation of the value that people derive from engaging in travel. It’s not just wealthy folks making superfluous trips. Residents having access to better jobs or businesses with better selection and lower prices isn’t bad. Businesses having access to a bigger labor pool and potential customer and supplier bases because people can travel farther in a tolerable amount of time isn’t bad. Making supply chains work better isn’t bad. Getting emergency vehicles where they need to go faster isn’t bad. Pulling cut-through traffic out of neighborhoods to travel on a safer highway facility isn’t bad. Having more direct and less congested—and thus environmentally greener—trips isn’t bad. Enabling parents to get home and share a meal with the family isn’t bad. Using transportation infrastructure to shape development or improve economic competitiveness isn’t bad. Being able to engage in social interactions and recreational activities isn’t bad, and contributes positively to physical and mental health.
...
Overplaying induced demand arguments as a pretext for discouraging roadway expansion or presuming travel demand can be accommodated by investing in alternative modes can be disingenuous and ill-informed. The presumption that directing resources to transit, bike, or pedestrian options can meet the mobility needs of all people and goods seldom works out as a real solution that is financially sustainable, environmentally superior, or offers comparable mobility, accessibility, or other benefits.
That yellow highlight is my favorite, crisply articulating all the benefits of expanded highways. Keep it in mind next time you hear silly "induced demand" arguments being thrown against new projects.
Labels: costs of congestion, mobility strategies, transit, transportation plan
$2 billion for 2mph, Houston beats Dallas for pandemic in-migration and home construction, Phoenix growth stopped by a lack of water
Some smaller items this week:
"Arizona has determined that there is not enough groundwater for all of the housing construction that has already been approved in the Phoenix area, and will stop developers from building some new subdivisions, a sign of looming trouble in the West and other places where overuse, drought and climate change are straining water supplies.
The decision by state officials very likely means the beginning of the end to the explosive development that has made the Phoenix area the fastest growing metropolitan region in the country. …
The decision means cities and developers must look for alternative sources of water to support future development — for example, by trying to buy access to river water from farmers or Native American tribes, many of whom are facing their own shortages. That rush to buy water is likely to rattle the real estate market in Arizona, making homes more expensive and threatening the relatively low housing costs that had made the region a magnet for people from across the country.
“Housing affordability will be a challenge moving forward,” said Spencer Kamps, vice president of legislative affairs for the Home Builders Association of Central Arizona, an industry group. He noted that even as the state limits home construction, commercial buildings, factories and other kinds of development can continue."
Labels: census, development, migration, rail, remote work
