Thursday, September 29, 2005

Harris County will study leasing toll roads

According to the Chronicle yesterday, Harris County is looking at selling the operating rights to their toll roads for a big chunk of cash - potentially up to $7 billion.

An investment bank concluded that a private firm might pay up to $7 billion for the right to operate Harris County toll roads, prompting Commissioners Court Tuesday to authorize a study of the pluses and minuses of such a deal.

If the plan worked right, the multibillion-dollar windfall could be invested, and interest earned on it would pay for future road projects. Pricey road bonds likely would be a thing of the past, Harris County Judge Robert Eckels said.

"This could avoid the need for bond elections and the need to go to taxpayers for tax increases," he said.

As part of the 50- to 75-year deal, the county would maintain ownership of the toll roads, decide whether the system should expand and possibly set limits on future toll increases.

I have to say this seems really risky to me. There are a whole lot of ways this could go wrong. I'm a big fan of the private free market, but companies love to wring cash out of a good monopoly (noticed your cable bill the last few years?). Their interest will be to restrict supply to drive up prices and maximize revenue, exactly the opposite of what we need in Houston.

This deal sounds a lot like the airport concession agreements. You may not know that the city doesn't lease individual retail spaces at the airport. They give a monopoly over the entire airport to one vendor, who then chooses who fills the spaces and how much they charge. The city maximizes the value of the space, the vendor makes profits hand-over-fist, but guess who gets screwed? Yes, you, the hungry/thirsty flyer. Now you know why everything is overpriced at airports. Sound like a good model for our toll road network?

I would like to specifically critique the second excerpt paragraph above from a financial perspective. HCTRA has an asset that generates cash: the toll road network. Financial markets see that cash stream and are willing to let them float bonds at very low tax-free interest rates for new road building, because they know the county will be able to make the payments. Not a bad arrangement. But if you try to monetize that long-term cash stream into a lump-sum today, that investor is going to discount the value of that cash flow at a pretty high interest rate. To put it in layman's terms, this is why winning the $10 million lottery becomes a $5 million check (or less) when you choose the "instant cash payout" option instead of taking it in smaller checks over 20 years.

Next, they tout that that big lump sum of money the county just got can earn interest that can help build roads in the future. But I can pretty much guarantee you that any interest earned on the lump-sum will be less than the discount rate the private investor used. If I had to take a wild guess, I'd bet the private investor would discount the expected toll cash stream at 8-10%, and then the county would be able to reinvest it at maybe 4-5%. It's like loading up your credit card at 10% and keeping cash in a 5% CoD: you're losing money in the spread. Not such a good deal.

But my biggest concern is a potential loss of mobility flexibility for Houston. A lot of very interesting experiments are going on around this country with managed lanes, congestion-pricing, high-occupancy toll roads, and virtual exclusive busways. Houston is actually on the leading edge trying out some of these new innovations, and our congestion woes mean we need to be able to stay there. Right now, if HCTRA decides they want to try something, they can just do it. If a private contractor gets involved under a thousand-page legal agreement, that throws a major wrench in the works, potentially even an insurmountable barrier. They could demand the county compensate them any time a new project might adversely affect their revenues. They might even demand "non-compete" clauses which prevent nearby roads from being upgraded. The problems got so bad with the private operator of the 91 Express lanes in California that the state had to buy out the company.

The bottom line is that we could really screw up an agency that is working remarkably well just the way it is. An analyst with the Reason Foundation recently told me she thought Houston's mobility authorities had their act together as well or better than any other city in the country. Why mess with a good thing? To use a very Texan sounding cliche, "If it ain't broke, don't fix it."

Update: Kuffner hosts Robin's analysis here. She has a much more recent Rice MBA than me, so her financial analysis is much sharper than mine.

Wednesday, September 28, 2005

Dallas the costliest home market in Texas

Interesting report from the Houston Business Journal:

Study - Dallas the costliest home market in Texas

Dallas is the most expensive housing market in Texas, ranking higher than Austin, San Antonio and Houston, according to a new national study by Coldwell Banker Real Estate Corp.

The residential real estate company's Home Price Comparison Index compared the cost in 310 U.S. markets for a 2,200-square-foot, four-bedroom home with two and a half bathrooms, a family room and a two-car garage.

In Dallas, the average home cost was $261,325. It was followed by San Antonio at $219,075 and Austin at $199,381.

The most affordable market in the country and the state was Killeen, where a similar home costs $131,000. Arlington was the second most affordable market in Texas at $139,510, followed by Fort Worth at $148,610 and Houston at $151,600.

Plano was the seventh most expensive market in Texas, with homes costing about $183,750.

The national average home price was $401,767, a 13 percent jump from last year. In more than half the markets studied, the average home price was less than $300,000.

Since Houston and Dallas are similar cities in many ways, I've heard comparisons that say any housing price differences are likely due to zoning in Dallas and no-zoning in Houston. Zoning restricts new supply, especially in desirable areas, driving up prices. I do think that plays a part, but hard to say how much. $110K seems a bit much to blame on zoning. But no matter how you look at it, they're all a bargain compared to the $401K national average for that size house. Texas in general - and Houston in particular - are amazingly affordable, especially for families.

Tuesday, September 27, 2005

Kotkin/WSJ on NOLA vs. Houston

Joel Kotkin has an op-ed in the Wall Street Journal today that is very complimentary towards Houston. It compares New Orleans' poorly planned response to Katrina to Houston's response to Rita.

In contrast, Texas -- and the Houston area in particular -- has been industrious, building elaborate drainage, sewer, flood and other systems to handle the delivery and control of water into the metropolis. Such foresight has been a prerequisite for great cities from the days of ancient Rome to contemporary Los Angeles. Importantly, this should not be seen as a partisan issue but one of civic patriotism. As New York's Mayor Fiorello LaGuardia once noted, "There is no Republican or Democratic way to clean streets."

Both Texas Governor Rick Perry and Judge Robert Eckels, effectively the overseer of Harris County, are Republicans. Two of the most important architects of Houston's infrastructure spending, former Mayor Bob Lanier and current Mayor Bill White, are Democrats; Mr. White, in fact, was the highly partisan former chairman of Texas State Democratic Party.

Houston's investment and planning accelerated following the floods resulting in 2001 from Hurricane Allison, which dumped 37 inches of rain on the area and killed 22 people. When Rita hit, Houston's leadership was prepared to get folks out, something which, despite glitches, was largely accomplished. The city's famed hospitals were ready with secure power sources and the police, as well as the Guard, were prepared to act. Even if Rita had slammed the Houston region directly, it is unlikely we would have seen anything like the catastrophe that affected New Orleans. Houston would have buckled, and some lives may have been lost along with homes and businesses, but its civil society would have remained intact. The Astrodome would never have become a house of horrors.

It's certainly nice to see some positive publicity for Houston on the national level. He goes on to make several other points:
  • Questioning the need to elevate FEMA to first responder status when competent state and local government is far better positioned.
  • Talks about the Gulf Coast as the affordable "coast of opportunity", but that environmental regulations, insurance premiums, buyouts, and conversions to greenbelts/parks need to be used to steer development away from dangerous and flood-prone areas to prevent the need for future federal bailouts.
  • The long-term need to try and steer more population growth away from the high-risk and high-cost coasts towards the interior of the country, especially as we add 100 million new Americans over the next 50 years.
Not sure how to accomplish that last one in a free society, although I've always thought there should be some way to increase our immigration caps on a voluntary basis for states that need and want additional population, particularly in the Midwest, with the requirement that the immigrant stay within a certain set of states for a given number of years.

Monday, September 26, 2005

Envision Houston, part 4 - Mixing the 4 models in Houston

Now that Rita has passed, we will return to our regularly scheduled programming. To recap from the Envision Houston posts last week based on the event Sat 9/17, we talked about some interesting facts that were presented, the planning exercise that was conducted, and how most tables created maps that fit into one of four approaches/models based on the four combinations of concentrated vs. dispersed jobs and residences. Today I want to talk about Houston might mix and match from those four models going forward.

As I mentioned in part 3, I think Houston is the strongest concentrated jobs/dispersed residences (traditional) model in the country based on freeways and HOV lanes, with New York and Chicago being the top models with commuter rail. This gives us the advantages of home affordability, transit potential, and a unified sense of place regionally. I think we have real potential to keep those advantages with continued investments in freeways, managed lanes, and commuter transit (express buses and possibly rail). Even though I think that will be Houston's primary model going forward, I do see niche opportunities to add the other three models in parts of Houston. In fact, I think these transportation investments to the core to maintain large job concentrations there are a critical enabler of two of the other models.

I think natural forces are pushing the dispersed jobs/dispersed residences (sprawl/DFW) model around Houston. We don't have to do anything. H-GAC forecasts show a smaller percentage of metro-area jobs in the future will be in the core job centers. Employers are drawn to the suburban office parks with inexpensive space and easy parking near freeways, with short commutes from nice nearby suburbs with good schools. This relentless trend means it is very important that we continue to make investments in suburb-to-suburb loop freeways like 610, Beltway 8, and the Grand Parkway, because more and more people will be living in one suburb and commuting to another for their job. If we don't invest in them, then those employers won't have access to that talent pool and local citizens will have fewer job opportunities within a reasonable commute: a lose-lose situation. That said, I would hate to see it become the dominant model in Houston, making a bland sprawl-region with a weak core similar to DFW, Phoenix, Atlanta, LA, and others. It will take active energy to make the other three models vibrant alternatives to prevent this "lowest common denominator/path of least resistance" model from winning out.

The concentrated jobs/concentrated residences (smart growth) model is starting to flower downtown and in the uptown/Galleria area. Houston is lucky that we still have concentrated job centers in the core to add concentrated residential to. Dispersed job and residence cities make this model very difficult, as there are few obvious job concentrations where residential can be built. As long as there is demand for this high-density lifestyle, we should try to make sure the market provides it. Can we do it while mitigating the parking, congestion, and affordability problems often found with this model?

Realistically, no one of any means is going to be able to get by in Houston without a car for decades, if ever. So these developments will need adequate parking. I have every confidence that developers will insist on it to make their projects viable, but that said, city regulations can try to make it more attractive and ideally even dual-use, holding commuting employees during the day and residents at night. I'm also not too worried about affordability, as the natural competition in Houston's unfettered development market will force developers to keep their units affordable. Surface street traffic congestion is the tough one. We're getting a lot of high-rise residential towers in the core that are dumping a lot of cars on an already heavily taxed street grid. We need people living in these developments to use alternative means for more trips: walking, biking, transit. I think most of these districts are trying to become more pedestrian and bike friendly, but transit is a problem. I think the light rail lines will help somewhat, but the piece that's missing are high-frequency local circulator shuttles, like the trolley buses Metro used to run downtown. Assuming these districts start to develop most of their own support services - groceries, retail, restaurants, etc. - people need a way to get to them when they're too far to walk but really too short to justify a car trip. Easy and affordable taxi service would also be helpful. Anything to get them to not pull their car out of the garage for that short trip.

But even with frequent circulators and easy taxis, this is an uphill battle. Retailers in Houston know they can't survive without easy parking, and it's just too easy to default to taking your car if you know the parking won't be a problem. A congested street grid in these districts seems inevitable. We may have to look at radical solutions like two-way to one-way street conversions in uptown to be more like downtown.

Lastly, we have the dispersed jobs/concentrated residences model (town centers/transit-oriented development). Houston has a couple real opportunities for this type of development to flourish, as long as the demand is there for this high-density lifestyle. The first is around the light rail stops in the core. Midtown and the Museum District are good examples with real potential. The second is the non-transit town center, with examples like Sugar Land, The Woodlands, and, IMHO, the Rice Village. I think a lot of the same comments I made above about parking, affordability, and surface street congestion in the concentrated job/concentrated residences model also apply here. In the city of Houston, both models will also rely heavily on the new transit corridor planning approach that is under development. That doesn't help places like the Rice Village though, which may have to find more creative ways to develop in this direction (a TIRZ or some other entity?). One key will be for the city to monitor the market for these concentrated residential developments and make sure they plan ahead of the demand curve, but not too far ahead. Both underbuilding and overbuilding are bad. It would just take the financial failure of a couple high-profile developments to scare off local developers from these type of projects and end up with the widespread belief that "high-density new-urbanist residential development can't work in Houston." That would be very unfortunate.

Overall, I think Houston seems to be doing the right things to generate a healthy balance of all four models over the coming decades. As long as we don't become dogmatic about one or two models at the expense of the others, I think we'll be in good shape. Choice and diversity of lifestyles are a good thing. It helps keep both the employers and the employees/talent happy, which is a win-win for the health of the city and the region.

Sunday, September 25, 2005

Rita - belated wrapup

Sorry for the long delay between posts. I made the very stupid decision Friday evening to upgrade to Norton Internet Security's Anti-Spyware Edition, and it started preventing all web access while letting email through. I finally got it disabled this morning so I can post, but I'm still looking at a long slog this afternoon to figure out the long-term solution. Lessons learned: don't buy upgrades when they first come out (let them patch bugs for a while first), and don't do anything to your computer on the eve of a major disaster (or any other situation where Internet access is critical).

So we came through everything OK, as most of Houston did. Just some branches down. Didn't even lose power. Not the most restful night though, with very strong wind gusts slapping an oak tree limb against our roof. I don't think we got gusts much beyond 50mph, but I have a new first-hand appreciation for getting out of the way of anything with winds that go much higher than that.

The next morning I had an email from the BBC looking for first-person on-the-ground interviews about Rita. I called them, and they were very nice, but once they figured out I was in a pretty mildly-hit zone, they lost interest, which I completely understand. If it's not harrowing, it's not news.

Tom asked me to comment on this post regarding lessons learned for future evacuations. I think Tom makes some very valid points. Some people are looking for elaborate methods to optimize evacuations, but I think it can be much simpler than that. I think Houstonians, by and large, want to do the right thing, and an appeal to good citizenship can be effective. If I were governor/judge/mayor, my speech would go something like this:
We're facing a large hurricane and need to evacuate. Unfortunately, our freeways have limited capacity. We will be doing everything possible to increase their capacity (inc. contraflow reversals), but we need to make sure the highest risk families get priority. Therefore we need to ask the lowest risk households (insert criteria here) to stay put until we have gotten the most endangered out. An orderly evacuation will proceed from highest risk to lowest risk households, so those who we might not have the capacity to evacuate will be the safest and most secure rather than the ones in the most danger.

With careful monitoring of traffic loads and division of households into a few tiers of risk, plus constant communication with the media, an orderly evacuation should be stageable. Sure, plenty of low risk people will panic and flee, but I think an appeal to citizenship and charity towards those less fortunate will moderate the traffic flows enough to avoid a repeat of last Thursday.

Even with all the problems, it is pretty amazing to me that we got almost 3 million people out in less than 48 hours. The roads were clear much of Friday, so we could have gotten out even more if necessary - so the total capacity needed is there. The key is staging evacuation flows so people can spend 10 hours in the comfort of their home and then 5 hours on the road instead of 15 hours all in the car.

Friday, September 23, 2005

Rita - Day One, am

The morning definitely has a creepy feel to it. Totally quiet neighborhood. Gentle breeze. A few light clouds. Would be remarkably pleasant if we didn't know what was coming. First ominous sign: no morning newspapers. No Houston Chronicle. No Wall Street Journal. I'm not surprised. I'm sure newspaper delivery guys have better things to be doing. Up until now, it sort of felt like Christmas Day: not much traffic, restaurants and stores closed. But they deliver the paper even on Christmas. No problem - can still read 'em online.

Checked the traffic map. Totally clear. All freeways. Checked the cameras. Very few cars. Stark contrast to CNN last night showing 10 outbound lanes of I45 covered with cars bumper to bumper. They must have found a way to clear it out overnight. Impressive, but it definitely feels creepy this morning. A ghost town at what should be a jammed packed rush hour.

Found this quote from the NY Times backing up what I said yesterday about evacuation assumptions being wrong in a jittery post-Katrina world:
Frank E. Gutierrez, the emergency management coordinator for Harris County, said that models for an emergency evacuation envisioned 800,000 to 1.2 million people but that "well over 2.5 million" hit the road to flee Hurricane Rita.

Ring Zero posted a link on the Wal-Mart situation in the comments. I would certainly understand all closures yesterday in the coastal counties, but in southwest Houston? It certainly could have been open all day yesterday and helped everybody staying get stocked up.

Gotta go to breakfast. More later

Thursday, September 22, 2005

Rita - Day Zero

This is usually not a "personal diary"-type blog, but there seems to be a demand for first-hand accounts from Houston, and the UK Guardian has been poking fun at me, so I'll oblige - to be followed by some broader observations on disaster planning at the end.

Got up early this morning to get groceries and gas because yesterday afternoon was the Fall of Saigon writ large. Multiple gas stations with no gas, but finally found one in my neighborhood that only had regular left. My car requires super, but what the heck - I want to go into this thing with a full tank, not a quarter tank. Dropped my wife off to buy groceries first. My theory? Wal-Mart has the best logistics in the world, so they should be restocked overnight and good to go. Big-time wrong. The local Wal-Mart Neighborhood Market (groceries only) was totally shut down, no plans to reopen until Sunday. Please take into account the weather today: sunny, no clouds at all, all-time highs of around 100 degrees. Rain doesn't start until tomorrow and no landfall until Sat morning. I was very disappointed in Wal-Mart. Bad Wal-Mart! I think they deserve flack like Delta got for canceling NOLA flights a day before everyone else. Luckily, we found a purely local grocery running flat out with well-stocked shelves and loaded up. I spent a half-hour or so in line for gas, filled-up, and met up perfectly with my wife as she checked out of the grocery store. Mission accomplished.

Spent the rest of the morning "de-projectiling" around our house. Anything that looks like high-speed winds could pick up and throw at our windows got put in the garage. Took down the basketball goal. Moved a lot of plants from precarious positions. Folded and stored the patio furniture. Sweaty but relatively painless process.

Decided to stay totally local today. The Houston freeways are gridlocked, which has been all over the news. Were all night long too, as far as I can tell. The traffic map is kinda funny now, looking deceptively clear/green. But look a little closer, and you see a few red sections (less than 20mph) and many grey sections on the outbound freeways. Grey seems innocuous ("no data"), but what it really means is that the traffic is going so slow they can't actually measure the speed. They read EZ-Tag toll transponders between two points to measure speed, and I think the system is designed to throw out the "starting point A" reads after a certain time elapses, because the assumption is that person exited the freeway between point A and B - so it would be a bad data point. But if the traffic is going insanely slow (less than 5 mph?), it ends up throwing out all data points and showing "no data".

Thought we might catch one last meal out for lunch, considering we'll be stuck at home the next few days. Again, theory fails the reality test. Called a dozen restaurants in the area using Google Earth to scan for places and numbers. Nobody's open. BLTs at home it is.

We have a family of three from Clear Lake staying with us. They live in the storm surge evacuation zone. They brought up a couple cars, and we have a couple cars. Our garage has so much junk it only holds one car, and there are gonna be branches down and water in the street. Decided to move the two smaller cars to the second floor of a local parking garage. We weren't the only ones - the garage was filling up quick, with nobody parking on the bottom or near the edges. If only New Orleans Mayor Nagin had thought of this trick with his bus fleet...

After the car drop, got some ATM cash and - get this - a liquor store run (not my idea). Again, a mom-and-pop store staying open when all the chains are sealed up tight. Bottled water is sold out all over town, but not at the liquor store, so we pick up some extra in addition to the gin. The whole trip is a little eery, because the roads are pretty deserted and many stores and houses are boarded up around Bellaire.

Learned a neat trick today. If you ever wonder how many people really care about you, go live in a city facing a disaster. They come out of the woodwork. Dozens of calls from all over the country over the last 24 hours. They're all curious and concerned. It's nice to feel loved. Thanks, everybody.

OK, so getting to some broader lessons that came out of watching the news today. Clearly, the recent Katrina experience caused politicians to lean towards caution on urging evacuation, which instantly caused total gridlock in a metro of 5 million. Local news was flashing some travel times today like 320+ mins (!) to go about 20 miles north on I45 from downtown to FM1960. Absolutely insane. Some of the coastal counties are very upset, feeling that Harris County and Houston should have tried harder to keep people in-place so their very threatened citizens could get out. I'm sure disaster plans and routes assume a certain percentage of people will stay in place, but that assumption is totally wrong in a jittery post-Katrina world.

As I'm writing, they're trying to get contra-flow freeways flowing outbound, and as the storm track has shifted east, Mayor White and Judge Eckels are now trying to encourage more people in not-as-threatened areas to stay at home - which translates as, "if you're hearing this on the radio while stuck in traffic, please give up, turn around, and go home so this jam is clear before the hurricane strikes."

Lesson learned: don't only urge evacuation, but encourage people in less threatened areas to stay at home until the urgent evacuation cases get through the city.

Another lesson learned is that that many people on the move consumes gas faster than trucks can resupply, esp. when there's gridlock on the freeways preventing the trucks from getting anywhere. There are a lot of cars running out of gas and getting stuck by the side of the road. In future hurricane warnings, they're going to need to pre-position full gas trucks to re-supply the stations as they rapidly drain.

So now we're settling in for a night of DVDs - probably "Real Genius" or "Zero Effect", two of my favorite comedies. As for other activities as we wait this thing out, I have to keep reminding myself: do computer and Internet stuff now while we have power, and save the newspapers and magazines for the highly-likely non-powered future. We're feeling pretty good because every updated track seems to move further east. We're now looking at only tropical storm force winds on the "less bad" western side of the hurricane in our area. The further east it moves the more our guests and others from around Galveston Bay can breathe easier. I don't wish ill on Beaumont/Port Arthur/Lake Charles, but, realistically, a lot fewer lives and property are at risk if it tracks that way rather than over Houston.

Well, that's more than enough for today. If power and Internet hold out, I may write again tomorrow. Take care.

Wednesday, September 21, 2005

Hurricane Rita

I've noticed a few sites pointing to me for Rita coverage, which is very flattering, but real-time news has never really been my thing. The Chronicle and Drudge Report have great links. The track projections seemed to be moving away from Houston, but they moved more our direction this afternoon. I live in Meyerland (near Bellaire) pretty far from the bayous and just at the edge of the 100-year flood plain (Allison wasn't a problem), so I think we're going to stick it out. If the eye tracks more our direction tomorrow, that plan may change.

Traffic is just nuts all over town. Has been all afternoon and getting worse. If you want to evacuate while maintaining your sanity, I recommend 4am tomorrow morning. (5am update: I just happened to be up, and the traffic map is still gridlocked all over town. Insane.)

If we do stay, and if we keep power and Internet access and I have interesting first-person observations (a lot of "ifs"), I might put a few posts up. I'll probably suspend continuing the Envision Houston post series until next week, since it seems irrelevant to the immediate reality around us.

Good luck and stay safe.

Envision Houston, part 3 - The Four Basic Approaches

Continuing from yesterday, today I'd like to comment on the four basic approaches I saw in most peoples' planning maps at the Envision Houston event last Saturday. Teams were asked to write their philosophy and goals in the margin of the map, but they basically seemed to fall into one of four approaches, which I categorize based on a two-by-two grid of concentrated vs. dispersed jobs vs. residences.

1. Concentrated Jobs, Dispersed Residences
This is basically extending today's approach forward: people live in the suburbs and commute into the core to work. A lot of people seem unhappy with this approach: it strains transportation infrastructure (traffic congestion) and it consumes a lot of land for single-family home residences ("sprawl"). On the plus side, people get affordable homes, high-capacity commuter transit is more feasible with concentrated job centers, and it keeps us a more unified city (when people work in the core, they feel tied to the city and support it more, especially nonprofit institutions). I think New York and Chicago may be the perfect examples of this model with commuter rail, and Houston may be the premier example in the country based on freeways/HOV lanes.

What these types of cities wish for: shorter commutes.

2. Concentrated Jobs, Concentrated Residences
A very popular approach at many of the tables: pack more high-density residential areas into our core to go along with the existing core jobs. Classic Smart Growth. This uses less land, reduces sprawl, gets more out of existing city infrastructure, and makes core transit more feasible (density supports transit). Unfortunately, the data from other cities shows that, as density increases, transit usage increases relative to car usage, but not as fast as the density increases, so you actually get a lot more car trips per square mile - i.e. traffic congestion gets a lot worse, especially on surface streets. LA and DC are good examples of this kind of traffic impact. It's also unclear how many people are willing to choose dense living over the traditional single family home. Home affordability is a big problem in many smart growth areas. (here's an article on how it's impacted Sydney)

What these types of cities wish for: parking, affordability, faster trips.

3. Dispersed Jobs, Dispersed Residences
I think of this as the "DFW Metroplex model": spread jobs and residences far and wide. The metro areas of Atlanta, Phoenix, LA, and the SF Bay Area also fit this model. There is a certain logic to it: people often live closer to their jobs, and you're not trying to move masses of people into and out of the city every day. Unfortunately, transit becomes very difficult if not impossible because of the low densities of jobs and people. There's still plenty of sprawl, and there's still plenty of traffic: people change jobs and don't want to move, or their spouse has a different employer across town. Sometimes the traffic gets so bad that people are pretty much forced to move every time they change jobs, which can be pretty frequent in today's economy, and I think this is very detrimental to long-term community-building. I also think you can lose a lot of unity and end up with a fragmented region, with various municipalities and counties squabbling with each other. There's no critical mass focused on a core. While each small community might have a sense of place, the metro region as a whole often does not: the classic line, "there's no there there".

What these types of cities wish for: a "real" 24/7 downtown with a "sense of place".

4. Dispersed Jobs, Concentrated Residences
Think of this as lots of "town centers" around the region with high-density New Urbanist residences around pockets of jobs. Often this is implemented as high-density "transit oriented development (TOD)" around rail stops. People can even bike or walk to work within the TOD, which mitigates some of the surface street traffic problems of approach #2. Arlington, VA outside DC is the best example I can think of. Still have the question of how many people want to live at that density, the home affordability problem that often accompanies density (although probably less of a problem than #2), and the freeway traffic and fragmentation problems of #3 (although these may also be less of problem in the TOD case).

What these types of cities wish for: this one's not as obvious to me - maybe a milder version of #2: parking, affordability, faster trips? In my mind, model #4 is the least clear cut of the four approaches in terms of pros and cons, probably because it's been done in so few places (it's the exact opposite of the normal model). Would love to hear your thoughts in the comments.

Tomorrow, I'll talk about how Houston might mix-and-match from these four models.

(sorry for the posting delay on this one - Blogger wouldn't publish new posts last night)

Monday, September 19, 2005

Envision Houston, part 2 - The Planning Exercise

Continuing yesterday's post on the Envision Houston event last Saturday, today I'd like to talk about the actual planning exercise we did. Fortunately, Rad Sallee covered the basics in his Move It! column today, so I can excerpt him and then move on to my thoughts about the exercise:

On Saturday, more than 300 local residents took part in a big board game for grown-ups at the University of Houston. The players used military-size maps and chips representing residential neighborhoods, town centers, transportation and various amenities to create visions of the area's future.

The results, along with those gleaned from four other Envision Houston Region workshops in coming weeks, will be presented next spring in community meetings. The players' ideas also will be considered by the Houston-Galveston Area Council in its planning for transportation and other public services.

The column goes on to discuss concerns about all this leading to zoning, which I certainly hope is not the case. As a matter of fact, if zoning commissions in other cities operate anything remotely like this exercise, I now have a much deeper understanding of why they get so screwed up. This exercise was certainly interesting, but you can easily see how it could run amok if people had the actual power to force what they wanted (like zoning commissions have, and we, very fortunately, did not have). Granted, we were told to articulate our "ideal vision", but people with very good motivations can quickly make unrealistic decisions that have huge implications like:
  • Drawing tens of billions of dollars of rail lines on the map without considering how they would be paid for and whether ridership would justify costs
  • Marking off huge swaths of land for preservation without considering compensation to existing landowners who just lost their development rights
  • Designating large areas for high-density residential development without knowing whether there is sufficient demand for that housing choice or school district, or how those existing neighborhoods would feel about the new density and traffic
Placing these lines and stickers all over very nice metro maps is a huge power trip, and very fun until you realize that someday politicians with real power might do similar things in your neighborhood - then you suddenly get a cold chill down your spine. Where are free markets? Where are property rights?

Without getting into the detailed specifics, basically we had a certain number of chips we had to place somewhere on the map representing the next 30 years of population growth. Different chips could be traded for each other in certain proportions, but you still had to put everybody somewhere. I don't think you'd be surprised at the consensus of most tables: let's pack all these newcomers in high-density developments away from my neighborhood and make them ride transit so they stay off my roads. Yeah, good luck with that plan.

I do think some good and valuable items came out of this experience though:
  • Clear consensus that the worst flood plains around the bayous should become linear parks and not get developed.
  • The sheer volume of stickers that had to be placed really drives home the growth we're going to be dealing with and the huge task facing H-GAC, the counties, and the cities to plan for it. I think everybody who participated left with a deeper feel for the challenge involved than when they came in.
  • H-GAC will combine everybody's maps into a digital composite which they will use to guide their plans. While I find many of the individual maps scary, I think the "Wisdom of Crowds" theory implies that a composite of all of them could have some useful insights, although I would be more comfortable if the maps were done by a truly random sample of citizens instead of the biased sample of people who attend these events. There's a reason we pick juries at random instead of just letting volunteers show up.
  • I think the dialogues around the tables were healthy, where small groups had to debate to consensus. People definitely had to face different perspectives from their own.
  • Citizens feel like they're being listened to, which is valuable in itself. When the next H-GAC 2030 plan comes out, they're more likely to buy-in because they know their input was incorporated in at least some small way.
Overall, I had fun, I enjoyed meeting and talking to my tablemates, and I learned a few things. You should go to one of the other four events around the suburbs if you can. I'm glad H-GAC and others are doing these exercises and am looking forward to seeing some of the results and composite maps next spring. But maybe next time they do this exercise, it can include some play money that takes into account cost-benefit tradeoffs to be made, property rights, and market forces.

Tomorrow, I want to talk about the pros and cons of some of the philosophies I saw in the different maps, with dispersed vs. concentrated models of households and jobs.

Transit to the airport

Don't miss the new post at the Intermodality blog on transit to the airport. Christof totally nails it, including the reasons why airport rail doesn't carry as many people as you'd think it would. Fortunately, I've heard the new head of Metro, Frank Wilson, make similar comments on the poor cost-benefit ratio of airport rail across the nation, so I think he understands that good express buses are the right approach.

Sunday, September 18, 2005

Envision Houston, part 1 - Interesting Facts

So I went to Envision Houston at the UH Hilton on Saturday. H-GAC, Blueprint Houston, and others want to capture the the public's opinion of how Houston should grow over the next 30 years. Big turnout - I'd guess around 40 tables of around 6 people per table - so about two to three hundred attendees. A really fun and informative event. There will be smaller duplicate events around Houston over the next couple weeks. If you're interested, sign-up here.

There were some very interesting facts presented at the beginning of the event that you may or may not be aware of:
  • The U.S. is expected to grow from around 300 million people today to 400 million by 2050.
  • 75% of that growth will occur in a few, large urban areas.
  • Interestingly, when you combine that growth with normal tear-down rates of existing buildings, you end up with 70% of all the urban buildings in 2050 being built between now and then - so there is a substantial opportunity to change a city over time.
  • The Houston metro is at about 5 million right now, and adding about a million people a decade, with around 8 million by 2035.
  • That's 1.4m new households and 1.5m new jobs around Houston by 2035.
  • Harris County will move from around 3.4m people in 2000 to 6m by 2035.
  • Metro Houston will continue to have a substantially younger and more productive population than the United States as a whole.
Now, from my perspective, the most stunning fact - by far - was that the United States will grow faster than China (!) over the next few decades. And I'm not just talking about on a percentage basis - on a sheer numerical population basis! I wish I had written down the numbers on their Powerpoint slide, but it went by a little too quickly. Wouldn't you think a country with 1.3 billion people would be adding more people every year than a country with 300 million? But that's evidently not the case. I'm guessing it's a combination of strong immigration to the U.S. plus China's one-child policy.

In tommorrow's post, I'll talk about the actual planning exercise we did.

Thursday, September 15, 2005

37,000 evacuees to permanently relocate to Houston?

Well, that's according to the math in a recent Washington Post poll. 125,000 evacuees in town (I think that number is low) x 44% want to relocate x 2/3 want to stay in Houston = 36,667.

"The poll vividly documents the immediate and dramatic changes that Hurricane Katrina has brought to two major American cities. It also suggests that what may be occurring is a massive -- and, perhaps, permanent -- transfer of a block of poor people from one city to another. That may have social, economic and political consequences that will be felt for decades, if not generations, in both communities."

There are also stats on why they didn't leave earlier, how they got out, what they experienced, their religious faith, and who they blame, if you want to read the whole thing.

I have a feeling that the President's inspiring speech plus the promise of reconstruction jobs will lure more back home over time. It'll be interesting to see how the numbers change if another poll is conducted post-speech.

The NY Times makes nice with Houston

I just watched the President's speech from Jackson Square in New Orleans, which I thought was really well done. ABC went right to evacuee interviews at Reliant Park to get their reaction. Despite clear baiting by the reporter trying to get them to be negative on the President, they were remarkably positive about the President, the speech, and the recovery plan, and surprisingly hostile towards their own state and local officials (one woman singled out Mayor Nagin specifically). Evidently the stories of the unused buses in New Orleans have made the rounds among the evacuees, and they are not happy about it. When they went back to Ted Koppel in the studio, he commented along the lines of, "if that reaction is reflective of the rest of the country, then this is a big win for the President."

I actually want to cover two items in this post. The first is the NY Times conversation with the former head of FEMA, which you have to take with a grain of salt because it's a one-sided view, but seems to confirm my earlier suspicion that the real weak link was at the state level:

Mr. Brown, then director of the Federal Emergency Management Agency, said he told the officials in Washington that the Louisiana governor, Kathleen Babineaux Blanco, and her staff were proving incapable of organizing a coherent state effort and that his field officers in the city were reporting an "out of control" situation.


FEMA, he said, had no helicopters and only a few communications trucks. The agency typically depends on state resources, a system he said worked well in the other Gulf Coast states and in Florida last year.

Another way of reading that: FEMA was lulled into a sense of complacency by the competence of Florida. Maybe everybody's blaming the wrong Bush?

In other news, it looks like the New York Times may have been feeling a bit guilty about their earlier characterization of Houston as an economic vulture feeding on Katrina, so they made up for it with a really nice piece earlier this week:

A Rescue Mission Under Control: Houston Adjusts Well on the Fly

If any city in the country was ready for the disaster of Hurricane Katrina, it was Houston.

When the catastrophic storm set off the largest mass migration in modern American history, this subtropical-oiltown-turned-energy-capital of two million people, itself no stranger to severe weather, quickly set an extra 200,000 places for dinner.


Now Houstonians, steeped in accolades for their hospitality, are grappling with questions of how the crisis will change their hometown, America's fourth-most populous city, and how it already has.


The mood is clearly upbeat. "We're a bigger community today just in terms of our heart," said Judge Robert Eckels, Harris County's top official, who has led the local effort with Mayor Bill White of Houston as a kind of Rudy Giuliani rallying duo.

If Houston became "the shock absorber of the nation," in the judge's phrase, it was partly because of its size; Chicago and Philadelphia would fit nicely inside Houston's 630 square miles, with room left over for Baltimore and Detroit.

It also boasts the nation's largest medical center, with 13 hospitals and 11 educational institutions employing more than 65,000 people. There were so many volunteers last week that 300 doctors from the Baylor College of Medicine were put on a waiting list.

And Houston is a city of big givers. A leftover doughnut auctioned off by a radio station last week drew up to $15,300 for hurricane survivors.

The whole article is well done, and I highly recommend reading the whole thing. I am not, however, recommending "Shock Absorber City" as another in a long list of city nicknames...

(thanks to reader Bob Sanborn for the article pointer)

Wednesday, September 14, 2005

The importance of keeping jobs in the core

This Toronto Star article asks the question, "Is it a good thing if residents are moving into the city, but jobs are moving out?" Of course, it's better than both jobs and residents moving out of the city (like in the Rust Belt), but it's clearly worse than having healthy growth of both in a city.

...some are starting to question the wisdom of turning the city into a work-free zone. This is where people come to live and have fun, but increasingly their jobs are farther afield.

The traditional equation that had much of the suburban population heading downtown to work is gradually changing. More and more, people are driving from suburb to suburb or even from downtown to suburb to get to their jobs. Rush hour now happens in both directions, inbound and out, morning and night.

And because businesses in the city pay municipal property taxes at a rate 3.3 times that charged homeowners, the corporations are quietly abandoning the core for the hinterland.


For the moment, this massive influx of residents is seen as a good thing. Yet one wonders what becomes of a downtown where so few are actually employed. What happens to the tax base of a city that has been emptied of business?

In Houston, my sense is that traffic congestion is a bigger issue than taxes in determining where employers go. Houston has made substantial mobility investments to the core (both freeways and HOV lanes), so we have actually done a pretty good job of keeping jobs here. At the same time, we're starting to see a residential renaissance inside the loop. So, for now, Houston seems to be getting the best of both worlds. Keeping both trends going will require two things:
  1. Improving "quality of place" to attract new urban residents (an initiative of GHP, Gulf Coast Institute, and others)
  2. Continuing investments in mobility - both freeways and commuter transit - so existing employers don't leave for the suburbs
The majority of employees at most companies will remain suburban dwellers, mostly families, and it is critical that they be able to get into the city to their jobs. If that gets too painful, they will pressure their employers to move out to them. This is already happening to some extent, with substantial employment growth in Sugar Land and The Woodlands. A balance of core and suburban job growth is healthy, and even helps us better utilize our freeways by having reverse commuters. The key is balanced growth, of both suburban and urban jobs and residents. Most new job announcements seem to be in the suburbs (like the Citgo move to the far westside), so it is more important than ever to hold onto the existing core employers and their internal job growth to balance out the new jobs being attracted to the 'burbs.

Tuesday, September 13, 2005

The amazing growth of technology entrepreneurship in Houston

Tonight I attended a Houston TeXchange event titled "A Look at the State of Entrepreneurship in Houston." I've followed the technology entrepreneurship scene in Houston for at least ten years, at it is making progress by leaps and bounds. The crash of 2000 was really only a small hiccup for Houston, and we have progressed far beyond where we were at the height of bubble and have really closed in on matching the activity in Austin and Dallas (maybe even surpassed on some measures). I was stunned to hear that the Houston Angel Network, which helps with seed investing for very small tech companies, is now the second largest in the nation in people and funding, after a group in California - while the Austin angel network essentially vaporized after the crash.

Another tidbit I picked up is that UH is really growing and pushing its undergrad entrepreneurship program:
Bauer's Entrepreneurship program is ranked as a top tier program by Entrepreneur magazine, and we develop winners. In the past four years, undergraduate students from the Bauer Entrepreneurship program have won awards in 10 national business plan competitions, and more than $60,000 in prizes.

There are now a tremendous number of entrepreneurship support groups in Houston, many of which made short presentations tonight:
It's really an incredible array of resources to help local entrepreneurs get off the ground and grow.

The new President of the Greater Houston Partnership, Jeff Moseley, spoke about a range of topics related to Houston, economic growth, and technology entrepreneurship: the Governor's Emerging Technology fund, the Texas Industry Cluster Initiative, NAFTA, CAFTA, clean air, quality of place, the largest medical center in the world, citywide wi-fi, biotech, nanotech, new energy technologies, and even supporting the post-Katrina rebuilding. The range of activities vs. even just a few years ago is amazing. I was able to speak with him briefly afterwards about the importance of getting Tier 1 research funding status for the University of Houston and my local venture capital idea, and they are wide open to any ideas that help accelerate Houston's high-tech growth.

There is definitely a strong entrepreneurial spirit that runs through this city and this state. Some people trace it to the oil wildcatting mentality. California may have been the last hotbed of entrepreneurship during the go-go 90s, but their costs have spiraled out of control (a $700K+ mortgage tends to cut down on quit-your-job entrepreneurial risk-taking), and I think you'll see Texas emerge as the next great entrepreneurial region in this country.

Monday, September 12, 2005

Six Flags Astroworld to close permanently

Stories in both the Chronicle and the Houston Business Journal. I have to say I'm stunned. I haven't been since my much younger years, but Astroworld seems like a right-of-passage for kids in Houston. (ahhh, memories of zero to 60mph launches in <6>that afraid of the new Schlitterbahn in Galveston?

On the plus side, it seems one of the key factors is that the land has gotten too valuable there. With the growth of the Medical Center and the light rail line, I guess there are higher-better uses for that land than a theme park. One of the articles does mention some equipment moving to Six-Flags-owned Splashtown on 45 North near The Woodlands. Not sure if that's just some WaterWorld stuff, or they're looking to build out Splashtown into the new Astroworld. Looking at the Google satellite map, there does seem to be enough land for a buildout up there - but it's gotta be real expensive to move all those rides, and I'm pretty sure the venerable Texas Cyclone won't be making the trip.

I do think there's a chance this won't happen. There is a lot of dead and low-value land along the South Loop. They may not find the buyers they think they will, especially when they take into account the cost of demolition and clearing the land. Maybe even environmental hazards? I'll bet ride maintenance crews weren't all that diligent with grease, oil, lubricants and who-knows-what. This all may be some clever negotiating tactic with Reliant for parking or with the city for tax breaks. It's also possible Six Flags may be acquired soon and the buyer may have alternate plans.

So don't count it out yet. But, just in case, you may want to get your last shot of nostalgia during a pleasant-weather weekend in October...

Sunday, September 11, 2005

Pasadena Star-News takes a wack at Kotkin and Houston

The editor of the Pasadena Star-News is not very happy with Joel Kotkin's pro-Houston op-ed regarding New Orleans:

Because, get this, his proposed model for the future rebuilding of New Orleans?


For pity's sake, isn't one Houston enough? Let Houston be Houston, beloved headquarters town of the New Rich of the New South: unplanned, unzoned, anarchic in its economics. Houston is great at creating, you know, Enrons, and Enrons create jobs and wealth for absolutely months at a time.

People need to give the Enron thing a rest. New York is full of companies getting indicted by AG Spitzer, but somehow New York can do no wrong and Houston is the capital of evil businessmen. Setting aside his obvious dislike of Houston and fear of a freeform, dynamic, entrepreneurial, open city, I think he misreads Joel. Joel is not saying New Orleans should become Houston, just that, given where NOLA is on the economic spectrum these days, it could afford to be more like Houston - to move somewhat in our direction: less corruption, more business-friendly, more pro-growth, more entrepreneurial, more efficient government. Nobody is arguing that New Orleans should bulldoze the French Quarter or give up tourism or lose its unique identity.

Amusingly, later in the editorial he promotes the Richard Florida's Creative Class stuff, which happens to rank Houston at #7 ahead of Pasadena-neighbor LA at #12 and way ahead of New Orleans at #42.

Another excerpt critiquing Joel after he calls for New Orleans to move its economy beyond tourism:
Tell it to Paris. And then he ties New Orleans' centuries-old culture to its fabled corruption, a link I find harder to get worked up about than my tying Houston's ethics to Enron's.

Well, the main difference is that Enron didn't kill anybody, and New Orleans' corruption and lack of serious disaster planning did.

He's the second person I've read advocating Paris as the model for the new New Orleans. While there are certainly things that can be learned from Paris, what they neglect to take into account is that Paris is the seat of government for a nation of 60+ million, and that a very centralized government forces a lot of economic development and business to be there (not to mention pouring money into local infrastructure). New Orleans has no such advantage, and is not even the capital of Louisiana - job-creating businesses can, will, and have moved elsewhere. NOLA will get a temporary boost from federal and insurance reconstruction money, but that money will dry-up longer term, and at that point they will have to economically stand on their own two legs. As I've said before, NOLA will have to choose between the low-income Orlando/Vegas route and the high-income "African American Austin" route.

Friday, September 09, 2005

Economic gains and losses in Houston from Katrina

First, a disclaimer: Katrina was clearly a great and costly tragedy for the country, and Houston is not out to "profiteer" from it (regardless of what the NY Times thinks). But there are definitely different local economic impacts around the country, and it's fair to try and assess those.

Tom Kirkendall has his thoughts, building on economist Tyler Cowen at Marginal Revolution. I tend to agree with Tom's thoughts, but disagree with Tyler's. His gains seem about right, but not his list of losses:
  1. Local taxes will rise to pay for shelters and the like.
  2. Hotels, sports stadiums, and other public facilities will experience crowding.
  3. Refugee issues will move to center stage; this will command political attention and perhaps creative divisiveness, hindering potential improvements.
My counter-arguments - matching in order - are:
  1. The Red Cross and FEMA will pay directly for shelters, or seem likely to reimburse us. Certainly no tax increase in the offing.
  2. Again, FEMA will reimburse for public facilities, and paid hotel nights are a net gain, not a loss, as are filling empty apartments
  3. Don't really see anything like this happening. Indeed, the Chronicle today talked about the great cooperation among local political leaders.
He gives the example of the Berlin wall falling, which was a temporary gain but a longer term economic hit to Germany. The real difference here is that Houston and Texas did not annex Louisiana - we're just providing temporary federally-reimbursed relief support. The feds will take most of the hit on rebuilding (which does partially hit Houston and Texas).

This is not to say there aren't a whole host of costs we will absorb that the feds might not reimburse (education? medicaid?), but looking at Tyler's original list, the gains heavily outweigh the losses from a local perspective.

Thursday, September 08, 2005

Daily Standard comparing New Orleans and Houston

Here's the link. It's substantially based on Joel Kotkin's earlier editorial, but does have some points of its own. It has some pretty harsh things to say about New Orleans, then moves on to compare it to Houston:

In 1831, Alexis de Tocqueville defined a long set of traits that made Americans "different," and that remain today just as valid: Americans are restless, inventive, pragmatic, entrepreneurial, socially mobile, and so future-oriented they are ready and eager sometimes to let go of the past. None of these things defined what once was New Orleans; in fact, that poor destroyed city played them in reverse: It was socially static, fairly caste-ridden, non-entrepreneurial (read hostile to business), and wholly immersed in its past, to the point where its main industry is marketing ambience and nostalgia.


New Orleans, in short, was the place you went to take a vacation, not to prosper in life and start a family, much less start a business. This lack of opportunity, or the upward ladder of social mobility, is perhaps one reason so many evacuees felt they were breathing fresh air when they landed in Houston, and are deciding to make it their home.

Let us look now at Houston, for it is the second city in this cosmic drama, and one in which Tocqueville would feel right at home. Like so many cities in the Sunbelt, it is expanding, entrepreneurial, based on the future, and the place where the "much celebrated American can-do machine that promises to bring freedom and prosperity to less fortunate people" comes roaring to life. "In 1920, New Orleans's population was nearly three times that of Houston," says Kotkin. "During the '90s, the Miami and Houston areas grew almost six times as fast as greater New Orleans, and flourished as major destinations for immigrants . . . These newcomers have helped transform Miami and Houston into primary centers for trade, investment and services, from finance and accounting to medical care for the entire Caribbean basin. They have started businesses, staffed factories, and become players in civic life."

It is now no surprise that Houston is the place where in days they built a new city in and around the Astrodome, that has taken in 25,000 refugees from New Orleans, and is planning to feed, house, employ, and relocate most of them. Houston is the place where the heads of all the religious groups in the city--Baptists and Catholics, Muslims and Jews--came together to raise $4.4 million to feed the evacuees for 30 days, and to supply 720 volunteers a day to prepare and serve meals. If New Orleans was where the Third World broke through, Houston was where the First World began beating it back, and asserting its primacy. Are we surprised that the star of this show has been Texas, home of Karl Rove and both Bushes, widely despised by the glitterati as sub-literate, biased, oppressive, and retrograde? No.

As RJ pointed out to me in an email, this relief effort may go down in history as one of Houston's defining moments.

Why cars and walkable communities can peacefully co-exist

This short essay talks about the effect of the internet and telecommuting on the future of smart growth and communities.
One of the more interesting paradoxes -- particularly for regions struggling to divine "smart growth" solutions -- is that the more we live and work in cyberspace, the more important real place becomes. While this notion runs counter to much of today's popular literature, we are already seeing the knowledge worker and high-tech, knowledge-sensitive industries migrating to highly livable communities. They are places with mountains or lakes, open spaces, clean air and water, and -- as in the case of Portland, Ore., and other communities that have established urban-growth boundaries -- less reliance on the automobile as the primary mode of transportation.

While agree on the desire for "better places" and peoples' growing focus on neighborhood and community aesthetics as they become affluent, I disagree on that being translated into an anti-car philosophy, which is simply unrealistic in modern society.

I think walkable communities and the car are completely compatible, precisely because their scales are so dramatically different from each other: walking is a 3mph activity, while driving is typically between 30 and 70mph. There is no reason we can't have a metro area with dozens or even hundreds of pedestrian scale "town centers" all connected by a high-speed freeway grid (not running through the middle of the town center, of course). Just because the 8-lane freeway of 610 passes by the city of Bellaire doesn't mean the Bellaire town center can't be made very pedestrian and bike-friendly. This gives the citizens of Bellaire their aesthetically-pleasing small town while still connecting them to the business and career opportunities of a big city, along with the access to restaurants, museums, performing arts, and other big city infrastructure like major hub airports and professional sports. It's a practical compromise of the best of both worlds.

Finding the silver lining in Katrina (updated)

It's certainly a tremendous national tragedy, but I can already see hints of the potential long-term benefits:

  • New Orleans will get a huge influx of federal and insurance money and a clean slate to redefine itself, hopefully keeping its best elements and shedding its worst. As I mentioned in my earlier post, I think there's a real shot at creating an "African American Austin". "Keep New Orleans Weird" bumper stickers, anyone?...
  • Tens of thousands people who were locked into stagnant poverty have a chance to start new lives with government and charitable support.
  • A chance for renewal in Louisiana state and New Orleans city politics. The corruption and inefficiency there was almost something they were proud of - an "inside joke" shared by the whole state. Now that joke has killed thousands, and it's no longer funny. A whole new level of political maturity may appear there.
  • Nationally, issues around our economic "bottom 80%" - and especially our "bottom 20%" - will get a whole lot more attention and sensitivity, especially from Republicans. I hope we avoid the heavy-handed protectionism, handouts and wealth redistribution route (Europe's dead end), but focus instead on investing in education, skills, and productivity to keep them competitive with the new "Chindia".
  • I may be going out on a racial limb here, but I think you'll see the African American community have an internal dialogue about the types of politicians they support and what cultural and social factors led to roving gangs terrorizing victims and shooting at rescuers.
  • The federal government may finally get serious about trying to streamline out-of-control bureaucracy and red-tape that keep its institutions from being effective. It's no longer simply inefficient - it's killing people.
  • There may finally be real efforts to diversify our country's energy base, which showed its concentrated vulnerability last week. There is the potential for compromise, with the left allowing careful tapping of new offshore and environmentally sensitive areas, and right getting serious about conservation and investing in realistic alternative technologies.
  • The temporary economic kickstart we're getting in Houston. (For example, the Chronicle says that our inventory of 70,000 empty apartments is disappearing rapidly)
  • The diverse new mix of residents Houston will gain. Maybe we need to designate a "Little New Orleans" in addition to our Chinatown(s) and Vietnamtown/Little Saigon?
  • Houstonians came together as a community and discovered the depths of their own generosity, which is a renewed spirit, pride, and identity that I think will far outlive this crisis.

Update: In a complete coincidence, David Brooks' column in the NY Times today is also titled "Katrina's Silver Lining", and he makes some similar points to mine above (although with far deeper understanding and detail than mine). An excerpt:

As a colleague of mine says, every crisis is an opportunity. And sure enough, Hurricane Katrina has given us an amazing chance to do something serious about urban poverty.


The lesson is that you can't expect miracles, but if you break up zones of concentrated poverty, you can see progress over time.

In the post-Katrina world, that means we ought to give people who don't want to move back to New Orleans the means to disperse into middle-class areas nationwide. (That's the kind of thing Houston is beginning to do right now.)

Wow. Somebody at the NY Times finally has something nice to say about Houston for a change.

Wednesday, September 07, 2005

The Onion rips Houston

The Onion, the humorous online magazine, takes an easy shot at Houston in their Katrina "coverage":
Refugees Moved From Sewage-Contaminated Superdome To Hellhole Of Houston
HOUSTON—Evacuees from the overheated, filth-encrusted wreckage of the New Orleans Superdome were bussed to the humid, 110-degree August heat and polluted air of Houston last week, in a move that many are resisting. "Please, God, not Houston. Anyplace but Houston," said one woman, taking shelter under an overpass. "The food there is awful, and the weather is miserable. And the traffic—it's like some engineer was making a sick joke." Authorities apologized for transporting survivors to a city "barely better in any respect," but said the blistering-hot, oil-soaked Texas city was in fact slightly better, and that casualties due to gunfire would be no worse.
On the negative side, it certainly perpetuates Houston's less-than-stellar image stereotype. But on the positive side, not only is it funny, but, as a pretty sharp McKinsey partner pointed out to me a long time ago: Houston's quality of life, affordability, restaurants, mobility, and culture is a great secret that we get to keep to ourselves, which keeps our growth moderate and manageable. If the truth ever really got out on a widespread basis, we would be inundated with millions of new residents and end up like Los Angeles.

NY Times on the stay vs. return decision for NOLA evacuees in Houston

Here. I do think the city will take a substantial short-term population hit as many refuse to return, but as long as jobs are generated (port, oil & gas, tourism, construction), people will go there - whether they are from there originally or new arrivals mostly from rural Louisiana, Mississippi, and Alabama.

Tuesday, September 06, 2005

New Orleans transit and evacuation issues

Tom Kirkendall has a post (building on a Randal O'Toole bulletin) on how the transit-dependent, rather than the "automobile-dependent", are the ones that got left behind in New Orleans. Certainly, wider car ownership could have gotten more people out, although I would be very skeptical of any government program that funnels money from transit into car purchasing or subsidization programs. The core function of transit is to provide "transportation of last resort" to those who either can't afford a car or are unable to operate one (handicapped, too young, too old, whatever) - and providing a car to every poor family does nothing for the second group. But car-enabling the poor also wouldn't be a congestion/gridlock disaster as one person commented on Tom's site. In a metro of 1.3 million, there are certainly many hundreds of thousands of cars. An additional 26,000 for the households O'Toole describes would not materially impact congestion in the city.

Disasters do seem to be a fair argument for buses over rail, because buses can be rapidly re-adapted to evacuation uses and rail cannot. From what I have read, between school and transit buses, New Orleans and Louisiana had the resources and the time to evacuate its poor population if it had chosen to do so. Why didn't they? My guess would be a couple reasons. The first was they had nowhere to take these many tens of thousands of people. And even if they did, odds where high (at least in their mind) that everything would turn out ok, as it has dozens of times before, so why go to all the trouble to transport that many people when you'd just have to bring them right back in a couple days? Much easier to simply warehouse them in the SuperDome and the convention center until the danger passes, then release them back to their homes. It was really the most politically expedient solution. And honestly, it actually could have worked out ok if they had pre-positioned all the city's buses (school and transit) in the highest-ground parking garages near downtown, and then immediately brought them into action when they realized the city needed evacuating. Enough of the city stayed high-and-dry to allow buses to get to both of those shelter locations and get out of town. Combine that with a robust bus-canvassing of low-lying neighborhoods in the two days before the storm to bring those people into the downtown shelters, and thousands of lives could have been saved.

So, IMHO, New Orleans' failure was on the planning and pre-storm action side, not their transit investments. The street car lines are modest, relatively low-cost and are very functional for New Orleans' tourism industry. Disaster planning should be a factor in transportation planning, but not the dominant one. For example, Houston has chronic street flooding, but that doesn't lead me to advocate an outrageously expensive elevated monorail system cris-crossing the city.

The truth of the matter is that the deaths in New Orleans were a very preventable tragedy (without much cost), which makes them all the more sad.

WSJ on Houston's generosity

The Wall Street Journal has a front page story today on efforts in Houston to help refugees, and I have to pass along some of the more touching quotes:

To Jerome Lyons, a New Orleans construction worker who spent five days trapped in waterlogged New Orleans, the wave of help in Houston seems more powerful than the hurricane. "All races, all colors, all express their love," he says. Mr. Lyons, who was rescued by boat from his home, says strangers have given him money on the street to help him get a new start.


Interviews with evacuees from New Orleans suggest that some have no intention of returning. Even a modest job in a new home may represent an improvement over what they left behind. Reco Parker, 31, a hairstylist now staying at Houston's Astrodome complex, says he's going back to New Orleans, but only long enough to try to salvage the more than $1,000 worth of hairstyling equipment he left behind. He plans to return to Houston, saying he's bowled over by Texan hospitality.

"They seem like loving people here," he says, adding that he's scared of staying in New Orleans after the hurricane.

And then, on a more humorous note...
The church did receive a call from one man offering to share his one-bedroom apartment with up to "four ladies." Mr. Middlebrook declined the offer.

Monday, September 05, 2005

Thoughts on the post-Katrina future of New Orleans and Houston

I've received some very flattering emails requesting my thoughts on the future of New Orleans and Houston after Katrina. After sifting through a lot of articles and news over the last week, I'm not sure the long-term future is likely to be all that dramatically different from the past:
  • New Orleans core industries - the Mississippi/Gulf port, oil/gas infrastructure, and tourism - can't really migrate and so will eventually come back: the port and oil/gas to full strength, but tourism remains to be seen. I think discretionary industries will mostly leave, including whatever oil and gas companies that aren't tied to local infrastructure and haven't already migrated to Houston (not much).
  • I think New Orleans will get a small core around downtown and the French Quarter up and running for Mardi Gras' 150th anniversary. It may not be a full-size Mardi Gras, but it will be something and it will be the national "New Orleans is back" story.
  • Houston will get a temporary economic boost from the FEMA money, office relocations, and port diversions, plus offshore platform and pipeline repair. The NY Times just came out with story on this: Houston Finds Business Boon After Katrina
  • Nationally we are likely to have an economic slowdown and possibly even a recession. The energy price shock will really hit overly-indebted Americans, who will cut back consumer spending and flatten - or even burst - the housing bubble (although not in Houston, which doesn't have a housing bubble locally). Prepare for a tepid Christmas sales-season. This consumption pullback will have ripple effects all over the world, especially China, which is already facing manufacturing over-capacity and bad-loan banking problems. If hundreds of millions of unemployed and underemployed rural and urban slum-dwelling Chinese get restless, it could get really messy over there. (How ironic would it be if Katrina ultimately gets credit for the downfall of the communist party in China? Ever heard of chaos theory? You know, "a butterfly flaps its wings and ultimately causes a hurricane somewhere"? Well, how about a hurricane on the other side of the world changing the government of the world's most populated country? Now if we could only trace Katrina back to that butterfly, we could identify the butterfly that overthrew China...)
  • Conventions: I don't think Houston will get much of a boost since we converted the convention centers to refugee shelters (which was absolutely the right thing to do). I'm not sure we would have picked up much anyway. I'll be frank: New Orleans, like Vegas, draws conventions that want a real party atmosphere, and that really isn't Houston. That said, I don't know how strongly New Orleans tourism and convention business will bounce back even after they get the city back in shape. The violent crime image will scare many away, and the convention center is now permanently associated with crime and death (having a convention at the New Orleans convention center would seem to me like buying a house whose previous family was killed - just creepy).
  • I think a substantial number of the refugees will relocate here to Houston (as does Barbara Bush). I think it could be as many as 100,000 (doubling our normal 100K/year metro population growth). News interviews indicate that a lot of people have no interest in going back. Assuming the job market can absorb them (hard to say), it should be a small economic boost as we build apartments and homes to house them.
  • Ultimately, I think New Orleans will come back, but as a much smaller city. I would bet up to half of their population may not return. Baton Rouge will grow substantially (already has), and in the future Louisiana may have two relatively equal key cities (BR and NO) rather than just NO - kind of like Dallas and Houston in Texas.
  • I've heard some comparisons to how the 1900 hurricane switched economic power from Galveston to Houston. The difference here is that New Orleans was already an economically stagnant city that has long since given up southern leadership to Texas, Atlanta, and Florida. I don't really see much of a power shift that hasn't already happened.
  • Locally and nationally, I think Houston's amazing generosity will work wonders for our image. My wife went to the Second Baptist church today on Voss near Woodway to train for food-service volunteering at the shelters, and ran into incredible traffic jams of volunteers. This was their second training session, and evidently the first had thousands of volunteers! That is truly amazing. And far more important than our national image is our own local identity and self-image. Houstonians see each other helping out in extraordinary ways, and it makes us proud of our community. I think Houston already had a pretty tight, unified community, but this event will reinforce it to a whole new level.

One specific reader has a question regarding my earlier post on Kotkin's recommendations for New Orleans:

"Given the potential for destruction next time (you can only build the levees so high), hard to imagine any business moving in there that doesn't have to be--i.e., tourism, oil and shipping. Your thoughts?..."

He raises a good point. It's easy to say "diversify your industries", but much harder to do in practice. San Antonio might be one model, which is moving from tourism and military towards health care and manufacturing (the Toyota truck plant is a big win). Savannah is another example: an old southern city that is rapidly growing via its port (recent WSJ profile) and by luring all the major distribution centers that can go with it (the WSJ article mentions that Houston is copying Savannah's strategy, with the new Baytown Wal-Mart distribution center an example of a big win). I don't know much about Charleston, but it may also hold lessons for New Orleans.

I don't think the risk of destruction is much of an impediment: plenty of companies brave earthquakes in CA, hurricanes in Florida, and terrorism in New York and DC. New Orleans has a lot of great character (and was even threatening to become a major movie-making center). If it can hold onto its unique character while minimizing or eliminating the big negatives (poverty, corruption, crime), it could really go somewhere. There are a lot of abuses of Richard Florida's creative class stuff, but New Orleans actually has the potential to make some of it work: build up a few universities, make some movies, embrace some of their natural beauty - maybe end up with an "African American Austin"? The potential is there, but it'll take a long, focused recovery and renewal effort to get there.

Sunday, September 04, 2005

LA Times profiles Houston

The journalists are in town to cover the Katrina refugees, but now the Houston-focused stories are starting to come out.

Houston the next model for New Orleans?

Joel Kotkin has an editorial on New Orleans in today's Sunday Los Angeles Times in which Houston figures prominently:

A NEW New Orleans

Forget crawfish étouffée -- look to ugly Houston for a vibrant economic model.

By Joel Kotkin, Joel Kotkin, an Irvine Senior Fellow at the New America Foundation, is the author of "The City: A Global History" (Modern Library, 2005)

BECAUSE THE OLD New Orleans is no more, it could resurrect itself as the great new American city of the 21st century. Or as an impoverished tourist trap.


For all these reasons, New Orleans should take its destruction as an opportunity to change course. There is no law that says a Southern city must be forever undereducated, impoverished, corrupt and regressive. Instead of trying to refashion what wasn't working, New Orleans should craft a future for itself as a better, more progressive metropolis.

Look a few hundred miles to the west, at Houston — a well-run city with a widely diversified economy. Without much in the way of old culture, charm or tradition, it has far outshone New Orleans as a beacon for enterprising migrants from other countries as well as other parts of the United States — including New Orleans.

Houston has succeeded by sticking to the basics, by focusing on the practical aspects of urbanism rather than the glamorous. Under the inspired leadership of former Mayor Bob Lanier and the current chief executive, Bill White, the city has invested heavily in port facilities, drainage, sanitation, freeways and other infrastructure.

At least in part as a result of this investment, this superficially less-than-lovely city has managed to siphon industries — including energy and international trade — from New Orleans. With its massive Texas Medical Center, it has emerged as the primary healthcare center in the Caribbean basin — something New Orleans, with Tulane University's well-regarded medical school, should have been able to pull off.

I don't think Joel is suggesting that they bulldoze the French Quarter, but that the new vision for New Orleans should think of tourism as a important aspect of their city (like New York or San Francisco), but not its primary defining industry (like Orlando or Las Vegas).

Thursday, September 01, 2005

Astrodome closed to new refugees? (updated)

CNN just reported breaking news that the Astrodome has started turning away buses, even though there are only 5 or 6,000 refugees currently inside, and estimates were that it would hold 24,000. Their most recent footage shows a pretty crowded floor of the Dome, but it doesn't look like they've used any of the various upper concourse levels and none of the seats. Aaron Brown indicated this is about to blow up into a big story: there are hundreds of buses headed our way. Why did we promise we could take 24,000 if it can only really hold 6,000?

OK, the newest update is that the fire marshal ordered it to stop accepting new people for safety reasons. I find that curious: if the stadium is fire safe with 60,000 people watching a game, how come it's not with 10 or 20,000? My suspicion is they planned on using all the concourses for cots, but the fire marshal thinks those cots would inhibit evacuation down those same concourses during an emergency. Alternately, it might be a cover excuse once they figured out that, if they filled every nook and cranny with people, it would be a security nightmare: you can monitor people on an open field, but not in the back concourses without an army of guards (certainly a concern after all the rape and assault stories from the SuperDome).

Regardless, this could be a real black mark for Houston unless we explain quickly and thoroughly, and find alternate options (Reliant Center? the GRB?). In the meantime, they've said they can accept thousands in San Antonio at the old Kelley Air Force Base, so they can forward those buses on for an extra three hours for tonight (those poor, exhausted people), but I hope they have something else figured out by morning when the mass fleets of buses start showing up...

Morning update: the Chronicle reports this morning that there are 11,375 inside, and they are trying to accommodate a few more at Reliant Arena.

My suggestion: Try to make the Astrodome an initial processing facility, then distribute them to other shelters. Give refugees a medical screening, a shower, some hot food, a good night's sleep - and then once they're stabilized move them on to smaller shelters that might not have the same access to medical care. Families with more serious medical conditions could stay, but others that are basically healthy could be moved on to make room for the incoming waves. Maybe 5-10 thousand people per day could be moved through this way?

August highlights

Time again for the monthly ritual. Near the first of every month, I'll be adding a post highlighting key posts from the previous month(s), with a particular focus on significant ideas I'd like to see kept alive for discussion and action. The main page will only show about a month's worth of entries, and I know most new readers won't go back into the monthly archives linked at the bottom of the right-side column, so here are the highlights:

Highlights from previous months can be found here.

As always, thanks for your interest in Houston Strategies.

"A Tale of Two Cities"

Just watching CNN Katrina coverage, and during one of those "reflective moments" by one of the journalists in Louisiana (I can't remember his name), he talked about "a tale of two cities" between New Orleans and Houston: one showing the worst of human nature (with the looting, lawlessness, and mayhem - now reports they're shooting at the rescue helicopters), and one showing the best of human generosity.

Just brings a tear to my eye...