Tuesday, January 31, 2006

Are income disparities in Texas a bad thing?

I wanted to comment on this article from last week in the Chronicle:
No state in the nation has a wider gap between its richest and middle-income families than Texas, according to a national study released Thursday.

At the same time, Texas ranks second only to New York when it comes to income disparities between the richest and poorest families [thank you Wall Street], according to the study by the Center on Budget and Policy Priorities and the Economic Policy Institute in Washington, D.C.

"Texas has arguably the most extreme separation between the well-off and everyday people in the United States," said Don Baylor, a policy analyst at the Center for Public Policy Priorities, an Austin think tank that advocates for working families.

"In many states, the income gap is like a gully," he added. "In Texas, the income gap is like a deep canyon."

The article goes on with the data details, suspected causes, disagreements, and possible "solutions".

So let's break this down. Take your average U.S. state, like Ohio or Minnesota or Missouri, with its "normal" income disparities. Now ask how Texas is different. Well, for one thing, we have a whole lot of Fortune 500 companies, an extremely vibrant set of businesses and industries, and even a fair amount of high-paying tech thrown in. That means some high-salary jobs at the top, probably quite a few more of them than your average state. When it comes sheer numbers of top-tier jobs, Texas is one of the "Big 3" along with California and New York.

Now, that creates a lot of economic opportunity here. That opportunity, combined with our geography, attracts tremendous numbers of unskilled, low-income immigrants that want a better life for them and their children. That means our incomes have higher highs and lower lows. Those large masses at the low end also skew down our "middle 20%" group mentioned in the article. In other words, if the bottom 40% weren't here, then our new "middle 20%" would be what is currently our upper-middle 20% with much higher incomes, and therefore less disparity between the top and the middle.

So my question is, which of these things would you like to eliminate to reduce Texas' income disparities: high-paying jobs, economic opportunity, or the immigrants it attracts? Any of these will work. Ship out the high-paying jobs to other states and we can reduce income disparities. Reduce economic vibrancy and we'll lose high-paying jobs and attract fewer poor immigrants. Or we can just erect a wall at the border and prevent any newcomers from coming to Texas at all (actually, some people might think that's a good idea, but I'm not one of them).

Of course, when you look at it that way, all of those options are nuts. Our wide income disparities are the result of good things happening in Texas. I'm not saying we don't have plenty of issues around education, globalization, the minimum wage, outrageous executive pay, and taxes, but the goal is not to minimize income disparities, but to make sure we have a steady flow of social mobility up the economic ladder (see yesterday's post). This will, of course, attract a new "bottom 20%" to come into the state as the current "bottom 20%" moves up.

Out of curiosity, I found the full study on the Internet to discover who the "best" five states are in their opinion based on minimal income inequality. Their top five: Wyoming, South Dakota, Iowa, Wisconsin, and Nebraska. Few major cities, high-paying jobs, or economic opportunities: check. Few immigrants: check. These are supposed to be our aspirational role-model states?

And here's an interesting little stat buried in the study and completely ignored: the District of Columbia has both the lowest and the highest incomes, yielding a whopping 22.7 multiple between the highest and lowest income quintiles, almost double the top states of New York and Texas. What does that say about the seat of our federal government? Business can offer good opportunities, but clearly government lobbying is the place to be if you really want to hit the big time...

Monday, January 30, 2006

A strong argument for the GHP growth plan

When the Greater Houston Partnership announced its new 10-year strategic plan of aggressive growth a couple weeks ago, it was not without controversy. There seems to be a whiff of sentiment that the challenges of growth may outweigh the benefits. Continuing yesterday's theme of slightly-dated Economist articles, there was an excellent book review of "The Moral Consequences of Economic Growth" by Benjamin M. Friedman. Its focus is at the national level, but the lessons are certainly applicable to states and cities.

Growing prosperity, history suggests, makes people more tolerant, more willing to settle disputes peacefully, more inclined to favour democracy. Stagnation and economic decline are associated with intolerance, ethnic strife and dictatorship.

It is not obvious that this should be true, so why has this tended in practice to happen? Mr Friedman's explanation is that people's sense of well-being is essentially relative. They become accustomed to any fixed standard of living, rich or poor. They are happiest if they feel their standard of living is rising (something that, in principle, all members of a society can experience at once), or if they feel that they are better off than their peers (which is divisive and not an aspiration that everyone can realise at once).

The key thing is the way these two standards of comparison - —the potentially harmonious and the socially self-defeating - —interact. If people are becoming better off relative to their own past standard of living, they will care less about where they stand in relation to others. If they are not growing better off relative to their own past standard of living, they will care more about their placing in relation to others - —and the result is frustration, intolerance and social friction. Growth, in short, has moral as well as material benefits.

A more controversial version of this thesis might be that growth supports liberal free-market capitalism, while stagnation trends towards redistributionist socialism (Exhibit A: see current political trends in Latin America). And, if you assume that socialism further limits the incentives to growth (i.e. socialist societies grow slower), then you can see the potential negative feedback spiral: slowing growth -> socialist tendencies -> further slowing -> more aggressive redistributionist socialist impulses -> yet more slowing and stagnation -> etc.

Please don't interpret this as a libertarian, capitalist, Republican, conservative, or free-market rant. Clearly some level of progressivism makes sense in tax policy, minimum wage and elsewhere, but a balance must be struck.

This thesis would also help explain why most older core cities, as their economies become less dynamic and proportionally more of the metro growth happens in the far suburbs, seem to make a political turn to the left (earlier discussion here). Don't get me wrong - there are plenty of other variables that affect a city's or region's political leanings - but it does seem to be one of the correlating causes.

Sigh. After writing this, I've realized there's no set of caveats that can avoid a firestorm in the comments. So be it. Let me at least shift the focus back to the book and article to wrap up:

A concluding chapter looks at policies to promote growth in the United States. Much of what Mr Friedman has to say on this accords with mainstream thinking, but it no doubt bears repeating. He underlines the need to curb the fiscal deficit in order to encourage private capital formation, and discusses at length how to do this. He argues that limits on public spending and the reversal of some of the Bush administration's tax cuts will both be needed, together with changes to Social Security and Medicare. More controversially, he advocates competition among America's schools as a way to improve sagging educational standards.

These ideas for raising America's rate of growth, though mostly orthodox, are lent a strange new vitality by the rest of this unorthodox book. Rich as it is, America still needs to grow - not for faster cars and iPods, but to "find the energy, the wherewithal, and most importantly the human attitudes that together sustain an open, tolerant and democratic society."

Sunday, January 29, 2006

Economist on immigrant integration and social mobility

This weekend I finally was able to start catching up on my embarrasingly backlogged stack of Economist magazines, and I came across a fascinating op-ed from an issue in early November dealing with the immigrant riots in Paris.

Minority Reports: Where Europe fails in its treatment of minorities compared with America


Americans worry about the different culture of Latinos just as much as Europeans do about North Africans. So even if immigrants in Europe raise cultural barriers to assimilation, this is hardly unique. What matters are the forces that work to overcome those barriers. Two stand out: work and home-ownership.

Work is the archetypal social activity. It provides friends and contacts beyond your family or ethnic group. If you start your own company, it pulls you further into the society around you. And here is a striking difference between Europe and America. Unemployment in France is almost 10%. Among immigrants or the children of immigrants, it is at least twice and sometimes four times as high. In contrast, unemployment among legal immigrants in America is negligible, and business ownership is off the scale compared with Europe.

The second big motor of integration is home-ownership, especially important in the second and third generations. This gives people a stake in society, something they can lose. Thanks to cheap mortgages and an advanced banking system, half of Latinos in America own their own homes. Britain, after its council-house sales and property booms, also encourages house ownership. In contrast, most of the blocks in the French banlieues are publicly owned.

Between them, a job and a house help to create not only more integration but also greater social mobility. Latinos supported America's turn towards assimilation because they feared the trap of Spanish-language ghettos. But the banlieues are full of people who have grown up without jobs, or any hope of getting a better income or a better place to live. For them, integration is a deceit, not a promise.

A job and a house will not solve everything. The father of one of the July 7th London bombers owned two shops, two houses and a Mercedes. But if you want to know why second- and third-generation immigrants integrate more in some countries than others, jobs and houses are a good place to start.

And, I would argue, Houston is even more work and home-ownership friendly than any other major city in America, leading to more social mobility. Not only are our homes affordable, but we have a thriving immigrant entrepreneurship and small business community. Why? This is from an earlier post documenting some meetings with Joel Kotkin when he was in Houston last fall:
A focus group with successful local immigrant entrepreneurs as part of a study comparing NY, LA, and Houston. Bottom line: Houston is the best small business environment in the nation for immigrant entrepreneurs, mainly because of the lack of bureaucracy, corruption, regulations, zoning, and permitting - resulting in plenty of very affordable commercial space and easy and affordable startups. But we have to stay vigilant against creeping local regulation that grows year after year, often well-meaning but with corrosive side effects.

Friday, January 27, 2006

NY Times profiles Houston after Enron

Here. It's the beginning of the Enron trial publicity, which starts Monday. This one seems like a pretty fair and balanced overview of the city. I'd normally excerpt/quote it, but it's another one of those articles where I'd end up quoting more than half of it, so just go and read the whole thing.

Thursday, January 26, 2006

Mayor's annual State of the City address

I was fortunate to get to attend Mayor White's annual State of the City address to the Greater Houston Partnership today at the Hilton Americas downtown (if you haven't visited it yet, drop by sometime - it has an incredibly stylish decor with some great views that will be even better when the new "central park" gets built). It was a sold-out event. GHP Chairman Chip Carlisle gave a glowing introduction to the Mayor, reflecting on his high-profile role during Katrina and Rita that the city can be proud of, which generated one of the most enthusiastic and sustained standing ovations I've ever been a part of.

Mayor White outlined several initiatives and made quite a few interesting points during his speech:
  • Crime: holding irresponsible apartment owners accountable for lax security, possibly tightening youth curfews on school nights, and cutting down on wasted police time from private security false alarms.
  • Fighting traffic congestion: this year's focus will be on encouraging more flex time and telecommuting among Houston employers. He pointed out that 600 fewer commuters during a 15-minute window saves a lane of freeway space that can cost tens of millions of dollars. A summit is being held for one hour on Feb 21st at Wortham Theater where business leaders will talk about best practices and lessons learned.
  • Affordable housing: "Project Houston Hope" - foreclosing on over 500 tax delinquent properties so they can be turned over for affordable re-development.
  • Energy efficiency: He wants us to be a national leader. As an example, volunteers coordinated by Centerpoint will canvas 1,300 homes in the Pleasantville neighborhood and offer to weatherize any homes that want it, which should lead to a roughly 10% reduction in energy usage and utility bills. In the next 60 days, they want to launch a program to provide good consumer information to citizens on their power choices, including pollution-free options.
  • Unity in diversity: He called on the GHP to continue to broaden its network, increase diversity, and reach out to more small entrepreneurs.
  • Cooperative government: He talked about how proud he was of how all levels of Houston government work together cooperatively, which is not the case in many metros around the country.
  • Education: How's this for a scary statistic: there were 70,000 local 9th-graders in 2001, but only 44,000 graduating seniors in 2004. He's pushing a major effort to keep kids in school, including getting them to sign commitment letters, which lets them attend an NBA all-star event next month.
The more I reflected on that last statistic, the less shocked I was. I have to be honest: the way high schools work today, with very limited vocational education, not to mention Bill Gates' description of them as fundamentally "obsolete" in the 21st century - if you're 16 or 17 and know you're definitely not on the college track, there's really not many obviously compelling reasons to stay in school. I'm in no way advocating dropping out, but if you really try to put yourself in that teenager's shoes, I think you can see why they make that decision - even more so if they're an immigrant with limited English skills who long ago fell off the academic track of their grade-level peers and are really just marking time. Late high school is just not relevant in their world, especially compared to getting a job and making money. Maybe we need to go a step beyond simply pressuring them to stick it out and try to understand and provide a high school experience pertinent to their world and their needs? An experience where they see and feel the value, and want to stick around for graduation? I know that's a lot more work for the schools and their districts, but wouldn't that have a lot more real long-term impact for both them and for our city?

North America's tallest statue for Houston?

Sorry for the late post - Blogger has been down for maintenance much of last night and this morning.

Real interesting profile of a Houston sculptor from the front page of the Wall Street Journal last week (since it's a subscription site, I'll post the whole thing below). He wants to build a 280-foot cowboy statue, which I think would be great for Houston if somebody's willing to step up to the plate on funding. Funny this should come up one month after we discussed an icon for Houston on this blog.

One question for my readers, based on this quote:
Near his studio in a warehouse on the edge of downtown Houston, he has bought several vacant lots bordering freeways, perfect for his very public style of art... A third set of presidents line the parking lot outside Mr. Adickes's Houston studio, waiting for a home.
Does anybody know exactly where this is? I'd like to drive by sometime and take a look.

UPDATE: Directions in the comments, and you can actually see the prez heads in the parking lot in the Google satellite map here (make sure to zoom in all the way). How cool is that?

Concrete Cowboy: Sculptor of Tall Art Sets Sights Higher

Texan David Adickes Renders Presidents, the Beatles; Now Aiming for 280 Feet

HOUSTON -- Texas sculptor David Adickes looms large in the art world -- and for no small reason. His gigantic concrete statues of historical figures have become tourist attractions from South Dakota to Virginia to his home state of Texas.

But as he celebrates his 79th birthday this week, Mr. Adickes is feeling mortal. "I don't have that many productive years left," he says matter-of-factly. So he is in a rush to round out his colossal legacy.

Near his studio in a warehouse on the edge of downtown Houston, he has bought several vacant lots bordering freeways, perfect for his very public style of art.

On one lot, he's erecting 36-foot-tall statues of the Beatles. On another, he plans huge busts of four Texas and national historic figures, which he'll call "Mount Rush Hour."

"You'll be able to see it coming and going for miles," he says with unabashed delight.

Sculptor David Adickes with a miniature version of his planned cowboy statue.

But Mr. Adickes dreams of a far more ambitious project: a lanky, 280-foot-tall cowboy that he says would be the tallest statue in North America. That's nearly twice as tall as the 151-foot Statue of Liberty. Mr. Adickes envisions his cowboy standing beside one of the state's busiest freeways right in the heart of Texas.

"That will be the last one," he says.

A man of small stature himself -- he is 5-foot-7 -- he has a pragmatic outlook on his work. It's not that bigger is better, he explains. Bigger is just more visible. "I'm into overkill," he says.

In recent months, Mr. Adickes has been erecting a 60-foot-tall statue of Texas founding father Stephen F. Austin in Brazoria County, south of here. As Mr. Adickes intended, the huge white statue rising next to the freeway, which was commissioned by local history buffs, has people gaping. Leslie Kennington, a local dog trainer, said she was stunned at the sight of it when she first drove by. A friend in the car with her remarked: "Wow. There's a big man standing in the middle of a field. That's the strangest thing I've ever seen."

Famed Houston heart surgeon Denton Cooley, who is the subject of one of Mr. Adickes's more life-size (8-foot) statues in Houston's Texas Medical Center, sees genius in Mr. Adickes's enormous scale. "Some of the great wonders of the world are big things like that," he notes.

Mr. Adickes was actually a relatively late convert to gigantism. He had spent most of his life wandering the world, teaching, painting and doing smaller bronze sculptures. Then, in 1982, he was commissioned to design a sculpture for downtown Houston's performing arts center. His "Virtuoso," a cubist-style 36-foot-tall rendering of a cellist, quickly became a downtown landmark.

After the cellist, which the public liked more than the critics did, he produced a few more giant sculptures in a more abstract style, including an old-fashioned telephone with Alexander Graham Bell's face on the dial, a 6-foot half-peeled banana, and a 26-foot cornet for a jazz stage at the 1984 World's Fair in New Orleans.

Then, in 1991, he offered to build a giant statue of Texas's first president, Sam Houston, in Huntsville, Texas, to commemorate the 200th anniversary of Mr. Houston's birth. It took Mr. Adickes 30 months to construct the statue in 10-foot sections in a friend's oil-field equipment warehouse. Private donations covered some of the cost. He made the statue's skin with an inch-thick layer of concrete reinforced by wire mesh and fiberglass wrapped around a steel-frame skeleton. A huge crane then lowered the sections into place on top of thick steel beams sunk into a 10-foot-deep concrete base.

David Adickes with his giant presidential statues.

Mr. Adickes, who has degrees in mathematics and physics, says he engineers his own statues with a simple rule of thumb: When in doubt, make it stout.

Other artists dream big. The 67-foot-tall Sam Houston statue held the title to tallest statue in Texas until 1997, when the Dallas city zoo inched ahead with a giant giraffe built by St. Louis sculptor Robert Cassilly, who is known for his giant-sized statues of animals. A private group of investors has been chiseling away for decades to create the Crazy Horse sculpture in the side of a mountain in South Dakota. It will be 563 feet tall if it is ever finished. And other projects are being planned around the world to outstrip a 330-foot-tall Buddha built in the 1990s outside Tokyo.

But with Sam Houston, Mr. Adickes was just getting warmed up. Inspired by a later visit to Mount Rushmore, Mr. Adickes decided to build his own ground-level tribute featuring busts, 18 to 20 feet tall, of all 42 presidents. The presidents were settled into a park setting in South Dakota, 40 miles from Mount Rushmore, and duplicates were erected in a park near Williamsburg, Va. A third set of presidents line the parking lot outside Mr. Adickes's Houston studio, waiting for a home.

Mr. Adickes's statues don't bring him much approval in the world of serious art. The sculptor's skillful, Titan-sized likenesses of historical figures may have a big "gee-whiz" factor, but they're of "minimal aesthetic interest," says University of Kansas professor of art history David Cateforis. He likens Mr. Adickes's statues to such artifacts of roadside Americana as the 80-foot-high Uniroyal tire outside Detroit.

Now Mr. Adickes is absorbed with creating statues for his own pleasure, "or insanity, or whatever," he adds. In his studio last weekend, a crew of assistants maneuvered a forklift to hoist the huge steel frame of a guitar onto the concrete legs of George Harrison. Sparks flew as the bulky object was welded into place, while Mr. Adickes directed the work with painstaking care. But he confesses he's growing tired of creating art with forklifts and concrete mixers. "Not exactly the artist's dream," he says.

He's painting again, but he is still determined to finish up his giant statue series, with the cowboy as the culmination of his work. He plans to base the statue on a 2-foot-tall bronze figure he sculpted years ago, which remains one of his favorites. Hat in hand, with leather chaps rippling off his long legs, the cowboy will be scaled up to the size of a 23-story building.

Mr. Adickes says he paid for some of his past projects himself, thanks to lucrative real-estate and stock investments he has made over the years. But he says the giant cowboy will be too much for him to handle alone. He'll need someone to donate the site, and sponsors to help finance the construction. But he believes he'll be able to find the necessary backing, perhaps from Western clothing makers, who could use the image in their advertising.

Mr. Adickes wants to make sure he leaves behind a substantial body of work. "These will be my legacy," he says of his gargantuan statues. "And they will be very hard to move."

Wednesday, January 25, 2006

RDA Mayors' Lecture Series starts tonight

A last minute announcement for those who might be interested. Details here.

Tuesday, January 24, 2006

IAH to become one of two "model" ports of entry

From the Washington Post last week:
A Push for a Friendlier Welcome

Washington-Dulles and Houston international airports will become "model" ports of entry under a pilot U.S. program to present a warmer welcome to foreign visitors who face post-Sept. 11, 2001, security changes, Secretary of State Condoleezza Rice and Homeland Security Secretary Michael Chertoff announced yesterday.

The program will provide customized video messages and "friendly greeters" to assist travelers entering the United States, Rice said. ...

"Think of when you go to Disney World," said Roger Dow, president and chief executive of the Travel Industry Association of America, which pushed for the initiative with backing from Karen Hughes, undersecretary of state for public diplomacy and public affairs. "They manage the lines, you feel welcome and all that. You can accomplish both security and have a welcome mat out."

Confronted by sharp declines in foreign visitors, decreased enrollment in U.S. schools by foreign students and less cross-border traffic after the terrorist attacks, Chertoff and Rice appeared at the State Department in a joint bid to repackage the government's sometimes discordant efforts to increase security and speed the movement of people and goods.

Researchers, economists and business leaders have warned that efforts to stop terrorists from entering the country have harmed broader U.S. interests. Dow's group said the nation's share of international travel has dropped from 9 percent to 6 percent in 10 years, with each percentage point valued at $12 billion in spending and 150,000 jobs.
Not much to say: kinda cool. Should help, especially after some of the complaints by international attendees to the Offshore Technology Conference last year.

Monday, January 23, 2006

Houston holds its own in domestic migration

I came across this interesting analysis of estimated domestic migration trends across U.S. cities from 2000 to 2004. Domestic migration means what it sounds like: people moving within the U.S., but excluding any population changes from births over deaths or international immigration. The good news is that Houston is doing substantially better than most other large cities, but we are definitely swimming against the tide: the largest metros (5+ million) are losing domestic population hand over fist. The "sweet spot" seems to be metro sizes of 1 to 2.5 million that are growing like crazy (like Austin and San Antonio). I'm guessing these metros offer most of the amenities people want, without a lot of the biggest city hassles like crazy traffic congestion (Austin excepted!), subpar urban schools, and outrageous housing prices.

Getting specific, the Houston metro gained 1% in domestic migration, behind only Phoenix (6.3%), Atlanta (3.1%), and DFW (1.7%) in the top 20 metros. The not-as-good news is that Harris County lost 98,330 domestic migrants, but the other counties picked up 147,173, giving us a net gain of 48,843. Most of the top 11 core counties (inc. Houston/Harris at #11) lost around 100,000 domestic migrants, with the dramatic exceptions of the Big 3 - NY, LA, and Chicago. NY lost around 640K, and LA and Chicago each lost around 400K. Among the top 20 cores, only Phoenix gained (can you say "California exodus"?).

Some quoted stats:
  • The largest core percentage losses were in Boston (-11.6%), San Francisco (-10%), St. Louis (-9.8%) and Denver (-9.7%) (that last one surprised me).
  • For metros, San Francisco suffered the largest domestic migration loss, at 6.4%, followed by New York at 4.2%. Chicago and Boston also lost more than 2.5%.
  • Some metros with strong infill programs and efforts to gain core population suffered significant core losses, such as Atlanta, Portland, Chicago, Denver and Washington-Baltimore (the Washington loss was somewhat greater than that of Baltimore).
  • The largest metro numerical gains were in Phoenix, Las Vegas, Tampa-St. Petersburg, Orlando and Sacramento (in order), all of which experienced a gain greater than 100,000.
  • The largest metro numerical losses were in New York, San Francisco, Chicago, Los Angeles, Boston and Detroit, all of which experienced a net loss greater than 100,000.
Based on some slightly older Brookings data I have on immigration, I think at this point Houston is the largest immigrant gateway in the U.S. that is still also attracting domestic migration. This is an incredibly powerful asset if you think about it: we're attracting the international talent pool necessary to become a true global city (just as London, NY, LA, SF, and Chicago did), while still being attractive to job-creating companies and their domestic employees. It's definitely an exciting time to be in Houston.

Sunday, January 22, 2006

A Grand Central Station for Houston?

Metro recently hired a firm to begin preliminary design on a "Grand Central Station" intermodal terminal just north of downtown (Chronicle). Christof has published his usual insightful and detailed analysis on the CTC Intermodality blog (permalink1, permalink2), and I posted my preliminary thoughts here last spring. A few pros and cons:

  • Relatively open land where many existing and planned lines come together
  • Makes sense to consolidate Greyhound and Amtrak and link them into the other local lines, which also facilitates Buffalo Bayou and Midtown redevelopment
  • Lots of mixed-use land redevelopment opportunity nearby (although one has to wonder about the impact of a Greyhound terminal on the desirability of that development)
  • Not really central to the light rail network and job centers, which would be south Midtown
  • Flood-prone area
  • The staggering $150 million estimated cost
  • Heavy commuter-rail focus, which I have written on before and still believe is a major transit mistake for Houston
  • Not a destination in and of itself. Getting to the heart of downtown still requires a transfer. David Crossley has spoken repeatedly about how big a mistake this can be, when stations go where it's easy rather than where people really want to go. Metro is aware of this too, which is why they're pushing for the new light rail line along Richmond instead of Westpark - yet they seem to be overriding that wisdom with this choice.
In addition to these, my other major worry is the same as I mentioned before: that routes that should be point-to-point will get inconveniently forced through the hub to pump up usage numbers and justify large capital investments, although increasing average trip times and reducing overall system usefulness and ridership.

Here's my recommendation to Metro: proceed, but scale down. Design this thing to start small with incremental, modular additions over time as the demand materializes. Start with a BRT/LRT transfer station plus Greyhound and maybe Amtrak (which may not be going through Houston much longer anyway). Don't force the HOV express busses there - they should take people directly to the destinations they want to go and circulate there. Stop calling it "Houston's Grand Central Station," because that creates public expectations and budgets that may motivate unwise decisions in the future (see previous paragraph). You might say that it may evolve into Houston's Grand Central Station over time, but plunking $150M down in one shot is a recipe for disaster. If it helps, try to imagine a national media expose in 2012 with a huge and elaborate building but only a trickle of users: "Houston's Grand Central White Elephant."

Thursday, January 19, 2006

Museum for Missing Places and Houston's mobility model for SF

I'd like to keep the weekend focus on yesterday's post, so just a couple tiny items today.
  1. Museum for Missing Places - a unique look at our city.
  2. Bob Pool at Reason tells San Francisco to look to the Houston Katy Freeway Virtual Exclusive Busway model to solve its mobility woes (which hopefully we will be expanding into a regional network soon). Very compelling logic, for both us and them.

Wednesday, January 18, 2006

City identity and attracting educated youth

Steve recently pointed me to a potentially disturbing report by CEOs for Cities titled "The Young and Restless in the Knowledge Economy." The gist of the report is that educated 25-34 year olds are the long-term lifeblood of a city, because they usually don't move after that age, so if you can attract them during that time, you can probably keep them long-term. Conclusions from their executive summary:
  • Young educated people are the most mobile people in the U.S. population.
  • Young educated people are an indicator of a city's economic vitality, but they are also a key contributor to economic vitality.
  • People in the 25 to 34 year-old group are the most entrepreneurial in our society.
  • For the first time, women in this age group are better educated than men, making them key to developing a base of talent.
  • Place matters: young educated people are being disproportionately drawn to certain cities, and once in them, they are more likely to choose vibrant, close-in neighborhoods than other Americans.
Unfortunately, Houston does not seem to be a member of CEOs for Cities, so our data points in the report are pretty thin. On the surface, they're a little scary, showing that, while we are holding on to youth over all, our college attainment rate lags substantially behind most other cities. We're not alone - this trend is noted among most Sunbelt and immigrant cities. On further thought, I'm not sure the news is as bad as it seems, because it seems to penalize us for attracting non-educated youth. So, for a made-up example, if Austin attracts 10,000 college graduates and 10,000 non-college grads, and Houston attracts 30,000 college grads and 60,000 non-college grads, we look worse than Austin the way they calculate their stats on a percentage basis, even though we gained numerically more college grads. At least that's my interpretation of their statistics. Why is it bad to be an attractive city of opportunity to both college-grads and non-college-grads? An engine of social mobility for all, rather than exclusionary and elitist?

Another problem I have is simply the age of the data, which is based on changes between the 1990 and 2000 Census. That is way-old news - we've been through an Internet boom and bust since then (artificially pumping up all the tech city rankings in the report) - and recently inflated a massive housing price bubble on the East and West coasts which dramatically reduces the attractiveness of those cities to young people. As an example, Boston considers itself in crisis because it has such an incredibly rich higher education environment, but holds on to so few of them after graduation - with most fingers pointing at outrageous housing costs. When housing supply is constrained, a young single or married couple simply can't compete with a baby boomer in their peak earning years for housing.

One additional stat: about a third of our 25-34 population is Hispanic, 4th out of 50 top metros in the nation and substantially ahead of the 10% national average, but well behind San Antonio, LA, and Miami - and comparable to San Diego.

Although I consider the report a clear wake-up call that we need to do better on higher education rates, I am heartened by their final recommendations, which seem to fit Houston pretty well:
Competing for Talent
  1. Make people the focus of economic development
  2. Become a city where women and ethnically diverse young people can achieve their goals
  3. Openness and engagement are key to rooting talent in place (a Houston strength)
  4. Investing in higher education is important, but it won't solve the problem (must attract and retain or they will simply move elsewhere)
  5. Vibrant urban neighborhoods are an economic asset
  6. The economic importance of being different
I wonder if we're headed towards a world where cities recruit on college campuses senior year the same way companies do? A booth at the senior job fair where Houston promotes its amenities, employers, and neighborhoods? Could be pretty effective, especially at schools within about a day's drive (a good draw-zone for us). How about it, GHP?

I found the last couple of paragraphs, which elaborate on that sixth recommendation above, extremely inspirational:
Although we identified some common elements that were attractive to many well-educated young adults, we would not say that there is one single ideal community. An important element of authenticity is distinctiveness. We live in a nation (and a world, thanks to globalization) where culture has become increasingly homogenized, where one suburban community, strip mall, freeway exit looks exactly like every other. But a reaction is brewing, emerging from the ground up. Many people want choices and a sense of place that moves past the bland of the national brand.

The essence of this notion is that every community will have to find its own unique identity. Just as quality of life means different things to different people, so too does sense of place. We know tastes differ regarding climate. Many people will find the quality of life eroded by "bad"” weather. Some will think Minnesota too cold, Portland to wet or Phoenix too hot. Just as there are many dimensions of climate, there are many dimensions of community. No city can offer the best quality of life to everyone. The challenge is to find one's niche. The Twin Cities, for example, can'’t be cheaper than Mississippi, or sunnier than Phoenix or more aggressively entrepreneurial than Silicon Valley, but they can offer their own distinctive combination of attributes that a significant set of knowledge workers will find attractive. As Michael Porter reminds us, strategy is about being different: What do you choose to be or to offer that is different than others? (Porter, 1996) This notion stands in stark contrast to our traditional view of economic development, which has asked simply whether one place was cheaper than another. The challenge for every community is to decide what kind of place it wants to be.
On a superficial level to the temporary visitor, Houston may not seem very distinctive, but those who have been here longer know better. We have a lot of loyalty by locals, as evidenced in the Houston Area Survey. The lack of zoning alone creates an eclectic feel that is not found in a lot of other, more-controlled cities - not to mention a constant dynamic renewal that gives us an energetic atmosphere (and some of those vibrant, close-in neighborhoods cited above). We do have a distinct identity, although I think people sometimes have a hard time articulating it. I made my best attempt right here a couple days ago, summing up our friendliness, hospitality, entrepreneurial energy, minimal regulations (including no zoning), open-mindedness, diversity, affordability, social mobility, optimism, and charity as "Open City, USA" - or, for a little more detailed articulation/branding, "Texas' Open City of Global Opportunity." I think it's a distinctive identity we could really rally around to sell ourselves to businesses and talent around the world, not to mention building up our own local pride so we help sell ourselves to friends, relatives, and associates who live elsewhere.

How about it? Comments on our identity? Alternate proposals?

Tuesday, January 17, 2006

Public opinion survey on development

I wanted to pass along and discuss this short blurb I came across in the Wall Street Journal's real estate section:

Stop Right There

Landfills, casinos and power plants are the most unpopular types of development in the U.S., according to a recent survey conducted by the Center for Economic and Civic Opinion at the University of Massachusetts, Lowell.

The first-time survey, commissioned by the Hingham, Mass.-based Saint Consulting Group, which advises developers on local political issues, asked about 1,000 people around the country for their opinions on development and developers.

Landfills elicited the most opposition from those surveyed -- 82% said they would oppose one in their community. Single-family housing had the most support -- 75% were in favor.

About one in five of the people surveyed said he had actively opposed development in his community by signing a petition, attending a local government hearing, or some other form of active opposition.

"[The survey] shows that the American public is far more sophisticated about planning and zoning than we thought," said Patrick F. Fox, president of the Saint Consulting Group. "The most staggering number to me is that one in five people have actively opposed a project. "

In the highly developed Northeast about 29% of those surveyed said they were opposed to new development. About 22% in the West and 20% in the South said they opposed new development.

About 61% of those surveyed said local governments did a fair to poor job on planning and zoning.

My takeaways?
  • The single-family home suburban lifestyle is still far and away the most popular.
  • Yet another reason to be thankful Houston has avoided zoning: more places get it wrong than right.
  • Looking at the trend in those development opposition stats from the new South to middle-aged West to older Northeast, it looks like communities start off more supportive of development but drop-off over time - probably as the hassles of additional population and development start to outstrip the benefits because government can't keep up on infrastructure, especially mobility. There seems to be a tipping point, and while Houston seems to currently be on the "pro-growth" side of that point, I sense that we may be close to the inflection point. That's unfortunate, because growth brings economic opportunity and social mobility - stagnation doesn't. To delay that public opinion tipping point, we have to be aggressive on infrastructure investment ahead of growth - especially mobility and education (quantity and quality).

Monday, January 16, 2006

GHP strategic plan and marketing Houston

Last week, the Greater Houston Partnership released its new 10-year strategic plan, a process they last went through 14 years ago. The Chronicle covered it, including a call for regional cooperation, and also did their own op-ed on it.

It's ambitious, to say the least, calling for 600,000 new jobs and $60 billion in capital investment over the next decade. It aspires for Houston to be a powerful business magnet, an international business and logistics hub, known for strong infrastructure and quality of life, one of the top four regions in the U.S. for business, and even an Alpha World City. They want to focus on 10 industries clusters: aerospace, alternative energy, biotechnology, education, energy, entrepreneurial enterprises, health care, information technology, nanotechnology and petrochemicals. I was somewhat surprised not to see energy trading mentioned in there, which would give us some financial industry muscle the same way agricultural commodities trading does for Chicago. But on the whole, I think it's a strong "stretch vision" for our city.

This is the part that most caught my interest:
To help it meet its goal, the partnership has enlisted Astros owner Drayton McLane to head up Opportunity Houston, which hopes to raise $30 million for a marketing campaign that will generate leads on businesses interested in relocating here.
Branding Houston is something I've discussed here before, so, as a marketing amateur but someone who has a reasonably good grasp of Houston's selling points, I thought I'd make my best pass at how I think Houston's identity should be branded. Something that would hit on our competitive differentiators: entrepreneurialism, affordability, diversity, transportation connectivity, mild winters, restaurants, friendliness, openness, and a sense of community unity (recently reinforced by the Katrina publicity). I also wanted to come up with something that was equally effective for three audiences: attracting businesses, attracting talented people, and reinforcing local pride and identity.

So here's the very rough concept (within the formatting limits of Blogger) of what a magazine ad might look like in the national or international media (by the way, a side message to the GHP: I highly recommend the Economist magazine for efficiently reaching heavy hitters around the world).

"Houston, we have a problem..."

Where can we find...

...the entreprenurial energy and diversity of an international talent pool, without the exorbitant costs of New York or California?

...the nonstop destinations of a top 10 global hub airport, without blizzard delays or coast-to-coast red-eyes?

...the cultural and culinary amenities of a vibrant big city, but with the authentic friendliness and heart of a small community?

(insert map here of Texas or North America or the world with a star for Houston centered in the map, in addition to some promotional pictures)

The international energy industry chose Houston as their capital, establishing it as a global crossroads and blessing us with an unmatched combination of urban assets.

Care to draft in their wake?

Texas' Open City of Global Opportunity


Here's some of my thinking:
  • Opens with our most world-famous phrase to get attention
  • Really hits on our strengths in a concise way
  • Clearly differentiates us - can you name another U.S. city that meets all the criteria? (keep in mind Phoenix, Dallas, and Atlanta have a far less internationally diverse talent pool).
  • The middle airport point may seem sort of minor compared to the other two, but let me tell you, it is definitely a big deal to the frequently-traveling top executives of companies. I've heard several people over the years mention the benefits of a central-time-zone hub when it comes to avoiding those all-day or red-eye coast-to-coast flights. And just to clarify: we're not quite a global top 10 airport for passengers or flights, but we are for nonstop destinations (181, in the top 3 in the U.S.).
  • It gives non-energy companies a reason to consider Houston: because of all the great benefits enabled by the energy industry
  • The final tag line: integrates the powerful brand of Texas, our globalism, Mayor White's "City of Opportunity" theme, and our fundamental openness, which is the best single word I can come up with to sum up our friendliness, hospitality, entrepreneurial energy, minimal regulations (including no zoning), open-mindedness, diversity, social mobility, optimism, and charity.
As always, feedback is welcome in the comments.

Sunday, January 15, 2006

High-density smart growth = population implosion?

I recently came across this USA Today op-ed arguing for a link between Europe's secularism and its population collapse. I have an alternate hypothesis, but here's the excerpt first:
'Demographic suicide'

Among the consequences of Europe's abandonment of its religious roots and the moral code that derives therefrom is a plunge in its birth rates to below the replacement level. Abortion, birth control, acceptance of gay marriage and casual sex are driving the trend. Europe is "committing demographic suicide, systematically depopulating itself," according to Weigel.

United Nations population statistics back him up.

Not a single Western European country has a fertility rate sufficient to replace the current population, which demographers say requires 2.1 children per family. Germany, Russia, Spain, Poland and Italy all have rates of about 1.3 children, according to the U.N. The Czech Republic's is less than 1.2, and even Roman Catholic Ireland is at 1.9 children. (The U.S. rate, which has remained stable, is slightly more than 2 children per woman.)

Fifteen countries, "mostly located in Southern and Eastern Europe, have reached levels of fertility unprecedented in human history," according to the U.N.'s World Population Prospects 2004 revision.

As children grow scarce and longevity increases in Europe, the continent is becoming one vast Leisure World. By 2050, the U.N. projects, more than 40% of the people in Italy will be 60 or older. By mid-century, populations in 25 European nations will be lower than they are now; Russia will lose 31 million people, Italy 7.2 million, Poland 6.6 million and Germany 3.9 million. So Europe is abandoning religion, growing older, shrinking and slowly killing itself. These are signs of a society in eclipse — the Roman Empire writ large. Is this any model for America?

While there might be some elements of truth in this theory, the drivers he lists - abortion, birth control, acceptance of gay marriage and casual sex - are pretty common in America too, yet we have enough children to at least maintain our population. Why?

My alternate hypothesis is based on a maxim I stated twice before in this blog: rising affluence seeks more private space. It's held true through all of human history: the wealthy always sought the largest estates in the country or apartments in the city. The vast majority of Europe's cities were developed well before the car, so there was little or no room for parking or freeways when it came along - their cities stayed relatively compact, dense and focused on public transit. With the supply of private space restricted, European households did what they had to do to get more private space per person as they grew wealthier: they had smaller families. If you can't grow the house, then shrink the household.

Everybody knows the story in America, of course: we built the freeways and the suburbs, increasing private space along with our wealth and making larger families more comfortable. In cities with space limitations similar to Europe like San Francisco, New York, and Portland, there have been stories of shrinking households and fewer children. Same story in Japan - so the correlation seems to hold across cultures and continents. I would imagine we'll see the same impact on Asia over the next few decades as they urbanize and increase GDP/capita.

Forecast for Houston? Steady population growth as far as the eye can see. Affluence seeks space, and we are, after all, "Space City, USA."

Addendum/clarification: This is not an argument against density as an option in the core for those who want it (aka New Urbanism), but an argument against forced density for all.

Update 10/06: A quote from the Economist magazine:
America's wide open spaces also make child-rearing more attractive. Bringing up a large family in a tiny Japanese apartment is a struggle, even if you can fold away your bed during the day. The world's lowest fertility rates are in super-crowded Hong Kong (0.95), Macau (1.02) and Singapore (1.06). In America the average family-home has doubled in size in the past half-century, from 1,000 square feet (93 square metres) in 1950 to 2,100 square feet in 2001.

Thursday, January 12, 2006

Houston lessons from the updated "Dallas at the Tipping Point"

First, Otis White from Governing magazine with the update and recap (again, no permalinks, so this is the whole thing), then I'll get into some excerpts from DMN and my thoughts.

Why the Facts Are Not Enough
How to Create Change in a City

What does it take to cause significant change in a city? For some, it's simple: Just lay out the facts. If the problems are made clear enough, leaders will change, and so will the city. For those who believe that, we'd like to introduce you to Dallas.

In April 2004, the Dallas Morning News published what must be the strongest case for change in a city of the last three decades. Simply put, the series (titled "Dallas at the Tipping Point") announced that the city was on the road to becoming the next Detroit, with soaring crime rates, an underperforming school system, a rapidly fleeing middle class and a dwindling tax base. Worse, it said, city officials, including city council members, seemed unaware of the trends. "It was as if Dallas City Hall were an aircraft flying blind and in the clouds, in a steep nosedive, with a disoriented pilot," the newspaper said recently, looking back on its 2004 report.

Just a bunch of newspaper hysteria? Top city officials tried to spin it that way, but the Morning News had done something clever: It had hired the corporate consulting firm Booz Allen Hamilton to look at Dallas as if it were a Fortune 500 company, sift through the numbers and decide whether Dallas was headed in the right direction. Result: If anything, the Booz Allen consultants were more pessimistic than the reporters. (You can view the 2004 Booz Allen report by clicking here.)

But surely things have changed since 2004, right? A few months ago, the newspaper and Booz Hamilton revisited the numbers, interviewed elected officials and took measure of the changes. The good news: The politicians are starting to talk the right talk. The bad news: They aren't walking the walk. Going back to its airplane analogy, the Morning News said, "The flight crew has begun to get its bearings. But without an altimeter, or a full sense of the impending crisis, the pilot is fiddling with the flaps instead of pulling back on the stick." Translation: Dallas is still hurtling toward disaster. (For the update report, click here.)

What explains the inaction of the past year and a half? Well, don't underestimate the power of denial. But there's something deeper here: To use a 1980s phrase, it's the difficulty of making paradigm shifts. Dallas' mayor and city council were elected with one view of the city and its future, the Morning News has presented them with a very different view, and the politicians are having trouble moving from one to the other. Hence, their incessant bickering about details, such as whether the mayor needs more power and whose ward is being favored, rather than dealing with the gathering crisis.

So what does it take to turn around a city? The facts certainly help, and for this the Morning News should be thanked. And a few extraordinary politicians may find their way to the new paradigm. But the greatest opportunity for change lies with future candidates who can explain the crisis and the opportunity for change in ways that leave the voters feeling both frightened and hopeful. When enough of these new candidates are elected and enough of the old politicians are gone, change will happen.
And then, from the Dallas Morning News overview story:

The study uncovered a series of startling government failures and offered a sober conclusion: If Dallas does not reverse its course, the city will spiral into a cycle of decline that could gut services and hollow out civic life.

A year and a half later, a similar study anchored the original findings – Dallas has sky-high crime, bottom-dwelling schools and a middle class that's stampeding for the suburbs – and made a double-helix sort of discovery.

Dallas City Hall does not have a plan to fix the mess. So, even though City Manager Mary Suhm has recalibrated city government in important ways over the last 18 months, even though the city is benefiting from the ideas and leadership of a new police chief and economic development director, even though there is fresh energy and optimism in the Dallas Independent School District under Superintendent Michael Hinojosa, the city's underlying problems remain.

Key findings in the 2005 Booz Allen report:

•Dallas has the highest crime rate of any large city in the nation. And, even though the city is projected to spend more money than ever on public safety, Dallas spends less to fight crime than its peer cities around the nation.

•Dallas public schools have among the highest-paid teachers and the lowest standardized test scores in Texas.

•Dallas residents are migrating from the city to the suburbs at a faster rate than anywhere else in the nation, taking businesses and tax dollars with them.

Certainly a sobering and cautionary tale for Houston. Lessons for us?
  1. Aggressively stomp out the recent crime spike, before it becomes a trend - the same way the Federal Reserve pulls out the stops to stamp out inflation at the first whiff, before it grows out of control - even at the risk of slowing down the economy. This means hiring and training more police and putting pressure on hot-spot apartment complexes to increase their security. I'd also like to see an active exploration of new technology, like ankle-bracelets with GPS tracking and wireless reporting for ex-cons on probation or parole (since most crimes, esp. violent ones, are repeat offenders). Crime reported? Check the database logs to see if any ex-cons were in the vicinity at the time, then look up their current location and pick 'em up.
  2. HISD is making slow but steady progress - evolutionary change - but they're not experimenting with radical, revolutionary change like the YES and KIPP state charter schools. They need to establish their own district charter school program and push innovation when it comes to educating poor, minority, and immigrant English-as-a-second-language students.
  3. Invest aggressively in mobility to keep jobs in the core, while also moving forward on annexations to keep up the tax base (and before the state takes the power away). The most critical mobility investments are congestion-priced, always-fast, EZ-tag toll lanes combined with a high-speed, point-to-point, regional express commuter bus/van system, ideally with subsidized but competing private operators (competing on comfort, schedule, reliability, route, and amenities like wireless internet).
Consider that Houston Strategies' official 3-point immunization program against a nightmare "Houston at the Tipping Point" future scenario.

Wednesday, January 11, 2006

Port of Houston 9th highest value international freight gateway in the U.S.

The Bureau of Transporation Statistics released their 2005 ranking in November, based on 2004 data (quite a delay there). Here's the full table of the Top 50. NY and LA are incredibly dominant, with 5 of the top 7. And the top 10 gateways move 42% of the value of all international freight going into or out of the U.S., really outsizing all the smaller gateways.

If you merged us with Texas City, we'd move up from 9th to 7th place, second only to Laredo in Texas. Since this is based on value, and the price of oil really spiked in 2005, not to mention the Katrina spillover from the Port of New Orleans, I would imagine our ranking will move up substantially once the 2005 data comes out - certainly in the top 5 and possibly even to #1 sometime over the next couple of years if oil is steady at $60+.

Tuesday, January 10, 2006

Headhunter on Houston as a "principal city of the world"

The Moneymaker interview in the Chronicle today has some interesting comments on Houston by the local managing director at Korn/Ferry International, which is an executive recruiting firm.

Eric Nielsen has seen steady improvement in Houston's image over 20 years and has watched the city become what he calls "a principal city of the world."

The city's growth is encouraging for Nielsen, the managing director of Korn/Ferry International's local office. An executive recruiter, Nielsen looks inside Houston and elsewhere to fill crucial roles in the city's energy-based economy.

The more people willing to relocate here, the better for him.

"Houston is generally an attractive place," he said. "Some people love Houston and would never want to leave. Some people would not want to live here.

"The city is incredibly resilient. Every day it's becoming a more important place to be. Bigger decisions are being made here. It's evolving. Houston has a very bright future."

Nielsen said Houston's energy sector is stronger than before Enron's bankruptcy and remains a net creator of jobs.


Q: Do you think the Houston economy is as dependent upon the energy industry as in the past?

A: A lot of time has been spent trying to define Houston as not as dependent upon energy as it once was, but I don't think it's a bad thing that we have such a strength here, in an industry that has such promise for the future. It brings a lot of opportunities and resources to this city. You operate at a disadvantage if you don't have a presence in Houston.

That said, if a major pharmaceutical company ever moves to Houston, we could have an incredible opportunity in health care and life sciences. Not that we don't already. We already have the largest medical center in the world, and the most research being done there — but a lot of opportunities that come out of there are not commercialized locally. They tend to go someplace else to be commercialized. If a major pharmaceutical company were to move its corporate headquarters here, that could be another catalyst, and another industry that makes a lot of sense.

I'll second that. But he's also right about the importance of the energy industry. Most "big name" U.S. cities have diversified economies, but at least one core industry cluster that really drives the local economy and growth: NY and finance, DC and government, Chicago and Midwestern industrial headquarters, Detroit and autos, San Francisco/Silicon Valley and tech, LA and entertainment. Subtract Detroit (for obvious reasons), and you have Big Five largest, most important and highest profile metros in the country. If you wanted to list the large, high-growth candidates with the potential to break into this top tier of cities, in addition to Houston, you'd have DFW, Atlanta, Phoenix, Miami-Ft.Lauderdale, and maybe Riverside-San Bernadino if you consider them separate from LA (which I don't think I would). Of those, only Houston has a driving core industry, although a case could be made for Latin American finance and trade as the core industry of Miami (but not Ft.Lauderdale). Houston and Miami can also make the strongest cases as international business centers. The rest of the cities are really "miscellaneous diversified," typically with a regional/national business focus. I don't know if that will make a difference in how these cities are viewed vs. the Big Five over the next couple of decades, but I do think it will certainly help Houston drive its growth and development and make a very strong case.

Monday, January 09, 2006

Otis White on Houston's crime and police situation

Regular readers know I like to pass along how the outside world perceives Houston, so here's Otis White's take from his Urban Notebook blog at Governing magazine (no permalink available, so here it is in full):

Who’s Responsible When Tenants Misbehave?
Turning Landlords into Police

Ask any cop. Crime isn’t spread evenly across a city; it’s concentrated in certain neighborhoods and apartment complexes. Which is why an idea making the rounds in Houston these days is so intriguing: Why not hold apartment owners responsible for the number of emergency calls coming from their buildings?

Here’s how it would work: The city would classify apartment complexes by incidents and numbers of units and rank them in tiers. As the number of emergency calls per unit climbs, so would the severity of sanctions. At the lowest level, apartment owners and managers might have to do nothing more than attend a public safety seminar. At the middle tiers, police officials might insist on security improvements, including private security guards. At the highest levels, property owners could be asked to post bonds that would be returned if incidents declined. Still having problems? The city could shut down the business.

The Houston city council is looking at this idea, which is already used in some cities in Washington State, because Houston is short on police officers and there’s concern about a recent spike in violent crime. (Fourteen homicides were reported over the Thanksgiving holiday period; about half of recent killings occurred at apartment complexes, police officials said.) “You’re tying up fire trucks ... you’re tying up police,” one council member said. “What we’re looking at is ways that we can free up officers.”

Not surprisingly, apartment owners aren’t wild about the idea. “How do I prevent the outside stray bullet from striking my window?” one complex manager asked the Houston Chronicle. “The problem is, I’m in a bad neighborhood.... I already paid taxes. The outside crime should be controlled by the city.”

Actually, outside observers agree: Asking apartment complex owners to do their part won’t work unless the city does its. And here Houston is falling behind; police staffing is considerably below the national average for big cities. “The priority has to be rebuilding the police force,” one lawyer who has served on public safety task forces told the Chronicle.
I'm all for this approach. It has elements of privatization and efficiency: rather than just adding more public-payroll cops, let the private market solve the problem in whatever they think the most cost-effective manner is (security cameras, fences, gates, guards, etc.), but the government holds them accountable for results.

Sunday, January 08, 2006

Indiscriminate fitness magazine picks on a new city this year

Now Chicago is the fattest city instead of Houston, according to the completely random and arbitrary criteria of Men's Fitness magazine (WP with national rankings, HBJ with Texas specifics, Chronicle on Houston), which ranked the Top 25 Fittest and Fattest Cities out of a group of 50. We dropped to #5, behind #4 Dallas. I'd trumpet this, except their judging system is so out-of-control from year to year it has no meaning.

LA moves from 21st fittest to the third fattest city in the country in one year? Did the entire city go on an eating binge or exercise strike for some reason?

Phoenix moves from 12th fattest to 15th fittest in one year? Atlanta moves from 23rd fattest to 16th fittest? Baltimore wins this year's award for the fittest city, when they were 25th fattest last year? (not to mention ranked 93rd out of a 100 by rival Men's Health) Do we believe some epidemic of fitness consciousness broke out in these cities? Half the Washington Post article makes fun of the result. It's almost as if the magazine editors toyed with their judging criteria and formula until it got a winner no one believes - a sure fire way to get lots of free publicity, which, of course, is the point of doing these lightweight rankings anyway: to sell more magazines.

Here's what they had to say about Houston's four-place improvement:
"I'm proud of you guys," said editor Neal Boulton. "You're down to five ... It takes an enormous effort to go down that much from that height."
Oh really? If it takes "enormous effort" to move four places, what kind of effort did it take in those cities like Phoenix, Atlanta, and Baltimore that moved between 11 and 26 places? Did they ban unhealthy foods at the city limits and require their citizens to jog to work every day? Or, more likely, did Men's Fitness slightly tweak their judging criteria which completely re-sorted the rankings? (as arbitrary formulas often do) Sounds like the "enormous effort" was a couple equation changes in an Excel spreadsheet. Note to ranking groups: if a minor change to your formula radically changes your rankings, it's a sign your formula is very, very suspect.

And what do they have to say for themselves?
"How could such a turnaround be possible in the span of a year? Men's Fitness editor Neal Boulton is quick to point out that the survey is far from scientific..."
Well, at least they're being up front about it. But every year the press eats it up. What's the criteria for newsworthiness here? Maybe somebody should start a couple new sets of annual rankings:
  • Top 25 Most Meaningless Annual Rankings
  • Top 25 Media Outlets That Will Publish Any Meaningless but Fun Statistics Sent Their Way
That might create some helpful public pressure. Well, unless they use indiscriminate criteria and arbitrary formulas and can't get published, but it doesn't look like that will be a problem.

Thursday, January 05, 2006

The return on mobility investments

Bob Poole writes a newsletter I really like for the Reason Foundation called the Surface Transportation Newsletter (how's that for a compelling, clever, sexy newsletter name?). I think this recent article is really on to something big.
Congestion and Regional Economies

Back in issue #22 I noted that the much-cited Texas Transportation Institute annual congestion cost figures tell only part of the story. They estimate the annual cost of being stuck in traffic to individual motorists—in terms of lost time and wasted fuel. Even though that number is large ($63 billion in the most recent year analyzed), it's hardly the total cost of traffic congestion. In that issue I spotlighted a report from the National Cooperative Highway Research Program that did some pioneering work to estimate how much congestion costs businesses in urban areas, in terms of things like increased inventory costs and employer/employee skills mis-matching. (It's NCHRP Report 463, in case you missed that issue.)

Now I'm pleased to tell you about another effort to estimate the cost of congestion to an urban area's economy, this one from Europe. Remy Prud'homme and Chang-Woon Lee's November 1998 paper is "Size, Sprawl, Speed and the Efficiency of Cities." Their basic idea is to look at the effective size of an urban area's labor market—i.e., what fraction of the total job possibilities can a worker access in a reasonable commuting time? Although larger metro areas have more total jobs, the bigger the city (geographically), the harder it is for workers to get to them, especially if the transport system is inadequate. Thus, in a small metro area, the effective size of the labor market is nearly the entire market, but that may decline to as little as half in a large, congested one like Seoul.

In the paper, after a preliminary look at Korean cities, Prud'homme and Lee used data from 22 French cities to calculate their effective labor market sizes, from the standpoint of both employers and employees. Using data on labor productivity from each one, they find a robust relationship between the two—i.e., a larger effective labor market leads to (or at least is correlated with) higher productivity. Their average estimate is an elasticity of 0.18. In English, that means when the effective labor market size increases by 10%, productivity (and hence output) increases by 1.8%.

The effective size of the labor market is negatively affected by sprawl and positively affected by speed of travel, a relationship which they tested with the 22-city data. For the speed variable, they concluded that a 10% increase in average speed leads to a 15-18% increase in labor market size, other things being equal.

In a study on mobility options for Atlanta published last year, Wendell Cox and Alan Pisarski applied the Prud'homme and Lee analysis to look at the economic productivity differences among several alternative transportation scenarios over the 2005-2030 period. The "maintain congestion" scenario (which would invest enough to keep congestion, and hence travel speeds, from getting worse) would lead to a 2.4% increase in gross personal income in the Atlanta area, compared with the “present plan” scenario. The "50% congestion reduction" scenario would lead to a 3.5% increase in gross personal income and the "70% congestion reduction” scenario would produce a 4.5% gain in personal income. Translated into increased per-capita income in 2030, those three scenarios would lead to increases of $2,450, $3,560, and $4,620, respectively. That's not chicken feed.

The Prud'homme & Lee study does not compare the relative costs and benefits of reducing sprawl versus increasing travel speed. That's a worthy subject for further research. And they also do not assess the relative cost-effectiveness of investments in transit versus highways for increasing travel speed. In both of these areas, the results will surely differ from metro area to metro area. But my guess for most of America's low-density metro areas is that reducing sprawl would be very difficult and costly, and that expanding highway capacity will generally be more cost-effective than expanding rail transit. But we should all be open to letting the numbers tell us more about these issues.

I think you can assume that Atlanta scenario is extremely close to Houston's situation: big congestion improvements would lead to big productivity and income gains. Keep in mind that when he talks about increasing the "effective labor market," he doesn't just mean population growth, but population growth along with enough mobility to actually reach the jobs within a reasonable commute, which, of course, is substantially affected by the average speed.

Sprawl critics will jump on the finding that sprawl negatively affects the size of the effective labor market - which is as you would expect putting more distance between residents and jobs. But, of course, those people are making those choices for a reason, whether it's better home value, size, quality, neighborhoods, or schools. People weigh off these choices against their commute, their access to job opportunities, and ultimately their job-fit and productivity. This is one reason I support aggressive tollway expansion and congestion pricing, both to relieve congestion and increase average speeds (and therefore the accessible job market and productivity), but also so the costs of the housing tradeoff decision are more explicit (live closer vs. pay tolls).

I obviously don't have the hard data to back this up, but my subjective judgement based on everything I've seen about different cities is that Houston might be close to a "sweet spot" on the mobility-population tradeoff. Smaller cities have a lower effective population, and therefore lower productivity and lower incomes. Larger cities run into gridlock from inadequate freeway investments (LA) or long transit commutes (NY, Chicago), reducing mobility and therefore realistic job opportunities and productivity. I think other similar-sized, high-growth, sprawling-with-freeways, sunbelt cities might be in roughly the same "sweet spot": DFW, Atlanta, and Phoenix. One missing piece from this analysis is the effect limited mobility has on skyrocketing housing prices (can't add supply within a reasonable commute to the jobs), so even if you have a higher average productivity and income (as Chicago and NY do), you probably end up with less discretionary income after paying for housing and other higher costs of living.

I predict some urban economist will make a big name for himself by deeply figuring out these equations for American cities, based on data analysis and computer simulations, to the point where the cost-benefit analysis for mobility investments (freeways, surface street improvements, or transit) will be much more clear-cut - maybe to the point where taxes can be raised to fund desperately needed improvements because the return-on-investment will be so obviously compelling (kind of like a well-designed TIRZ). "We're going to raise your taxes a dollar to make mobility investments, but it will increase your income two dollars". Of course, self-funding toll roads can avoid the tax-raising problem, but surface street, freeway, and transit improvements can't.

Any ambitious economists in the audience?

Wednesday, January 04, 2006

TX #1, CA #2 (for a change)

National Championship Rose Bowl: Texas 41, USC 38

I'm exhausted. That game was incredible. The most amazing comeback since, well, this (ahhh, savor the memory). Houstonian Vince Young is clearly not human - some sort of genetic/bionic superman secret experiment (note to the Texans: forget Bush, trade Carr, draft Young, pack stadiums). At the end, it even engaged my completely sports-indifferent Longhorn step-daughters, which is an amazing feat in itself.

Mildly interesting fact: I was one month old when Texas won its last football national championship.

Back to our regularly scheduled programming tomorrow.

Tuesday, January 03, 2006

Sense of place vs. community

The Washington Post has an interesting article on LA's $10 billion dollar downtown remake, not for the details of what's getting built downtown, but the comments about LA's sense of itself.
They say Los Angeles is 100 suburbs looking for a city. With any luck, they are finding one.

A development boom worth $10 billion is remaking the face of downtown Los Angeles, leading boosters to predict a renaissance in what used to be the desolate center of the capital of sprawl. From concert halls to condos, developers have built or are planning hundreds of projects that they say will end the sense of Los Angeles as a rudderless megalopolis with a rotten core.

"They used to say, 'There's no there there,' " said Margie Busch, a 30-something financial analyst who moved to a downtown loft recently with her girlfriend, Suzie Jones, a waitress and aspiring actress. "But we're here and we're happening. L.A. is changing. It's becoming a city."


California historian Kevin Starr said he was unsure all the development would combine to create a center where they was once none. "I think L.A. is still uncertain as to its urbanism, unlike New Yorkers who are fundamentally certain about theirs," he said. "Over and over again we debate this issue: Are we or are we not a big-time city?"

Even some participants in the downtown boom wonder if Los Angeles can remake itself into a more traditional city.

"Angelenos are different than the rest of Americans," said Dan Rosenfeld, a partner at a downtown real estate development firm. "We are a collection of individuals, not a community." He noted that Los Angeles has some of the best private gardens in the United States but the worst parks, some of the most stunning private architecture but disappointing public buildings, the greatest private art collections but middling museums.

"L.A. is impossible to plan," Rosenfeld said. "Its civic character is a bundle of energy and not a place."

Houston is notorious for continuously wondering if we've finally passed some "world class city" threshold. I think LA is commonly considered one, certainly one of the two most renown cities in the US along with New York (being the background for the majority of the world's entertainment will do that for a city). Heck, the Wikipedia has LA's picture under the "Global City" entry with it ranked just below the "Big 4" of NY, London, Paris, and Tokyo as a "world city" (a way of implying "world class" without the low-class act of actually using the word "class"). Yet clearly they are insecure in their "big-time city" status, which doesn't bode well for Houston's insecurity on the topic for quite a while into the future (not being the background for almost any of the world's entertainment, as well as about one-third the size).

I'm certainly not one to argue that the New York urban form is the one-and-only true path to world class city status. I actually happen to think of New York as a relatively unique product of history (as are London and Paris) - in particular the evolution of mobility and interaction technology - and future cities are unlikely head that direction, at least in America (more centralized and densely-populated Asia is a different story). The car has fundamentally altered the character of the city, and I don't think that will change anytime soon (not to mention what virtual presence technology will do on the Internet over the next decade). LA may actually be able to spawn a mini-Manhattan in its core - it certainly has the population pressures and the pedestrian-friendly weather. Whether that will permanently resolve the world-class/big-time quandary is an open question.

I think they hit on the bigger problem in the article: the lack of a feeling of real community. Maybe that's one of the reasons the NFL has such a hard time making a team work there? (they've lost two) Or maybe the entertainment industry in not very civic minded? (at least at the local level) How does one go about building a "sense of community"? Is it as simple as having a vibrant downtown? "A there there"? It may be helpful, but I doubt it's the answer. And is a "sense of place" the same as a "sense of community"? Is it possible that a lot of cities have lost their "sense of community" and are trying to get back a faux semblance of it through the physical building of a "sense of place" (aka "a vibrant downtown"). Can a "sense of place" really rekindle a genuine "sense of community"? I don't know, but plenty of cities are trying.

Houston's had a pretty strong sense of community for a long time, even before our own downtown renaissance. We may not have a tourist-level "sense of place" (i.e. it's hard to get a feel for the unique identity of Houston during a short trip), but I think most residents who've been here a while do have a strong "sense of place" about Houston. There's an indefinable feel of home and community. Even though it's not a very tangible thing - it's not a building or a neighborhood or a skyline or a stadium or a monument you can point at - we should recognize our sense of community as a precious asset to be nurtured, because, well, once you've lost it, the strategy for getting it back is pretty unclear.

2005 Highlights

Happy New Year! Time to take stock of Houston Strategies' first calendar year (our first birthday won't be until March). The Blogger dashboard tells me I have 261 posts in our first 10 months, which exhausts me just thinking about it (although nowhere near as prolific as many other Houston blogs). I'm planning on roughly keeping the 5/week pace for now, but may need to back off down the road. I'd rather slow down than dilute the quality too much.

Even if you're a regular reader, you might enjoy browsing the 2005 highlights below, which have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action. New comments are always welcome, or if you'd like me to try and expand on a topic of interest in 2006, drop me a line at tgattis (at) pdq.net (anti-spam-spider format - just change it into a normal email address). I also maintain a mailing list for those who prefer to receive Houston Strategies by email - just email me and I'll add you to the list.

As always, thanks for your interest in Houston Strategies. I'm looking forward to a great 2006.

September: A month dominated by posts on Hurricanes Katrina and Rita, so not many long-term "keepers".
Best wishes to everyone for 2006.