Thursday, May 08, 2008

A Map to Houston’s World-Class Future (part 1 of 2)

A couple years ago, Bob Sanborn of the Children at Risk nonprofit asked me to write an essay for a book they were publishing titled "Growing up in Houston." My theme guidance was Houston's economic future, kids, and the ever-elusive "world class" moniker. My essay was published, and I've been saving it to put on the blog at some point when there's a lull in other topics (um, like now). It's a bit long to cram in one post, so I will break it across two.

Houston has always been an ambitious and energetic city. The peaks scaled by our 20th-century predecessors have put us within sight of that ever-elusive tallest of peaks – the Mount Everest of “Top-Tier World Class City” populated by greats like New York, Paris, and London. The bad news is that our recent rejection for the 2016 Olympics reinforces that we have some distance to go. The good news is that we have the potential to ride this second energy boom to new heights. But the ascent path is unclear. Previous climbers used trails appropriate for different times that have long since been wiped out by avalanches of social and technological change. Houston will have to carve its own path in the 21st-century amid far more frequent and accelerating landslides of change. Focus, innovation, and rapid adaptation will be essential.

At their core, great cities have always been both creators and aggregators of talented people. They have drawn talent through the power of government (i.e. capital cities), or universities, or a pleasant climate, or natural beauty, or, most commonly, through vibrant commerce – historically due to geographic advantages in trade or natural resources, but more recently through “industry clusters” where a critical mass of talent in one field grows and builds upon itself (energy being the most notable one in Houston). And Houston’s ambitions will undoubtedly rely on a substantial increase in our talent base. The 2015 Strategic Plan by the Greater Houston Partnership has the goal of creating “nationally recognized centers of excellence, innovative projects and targeting initiatives in aerospace, alternative energy, biotechnology, education, energy, entrepreneurial enterprises, health care, information technology, nanotechnology and petrochemical.” Add to that energy trading with its financial skills and international trade with its language skills, and we’re clearly facing a tremendous talent-development challenge.

Rule #1 for developing strategy is to gain a deep understanding of your strengths and weaknesses, then mitigate your weaknesses while building on your strengths. Houston will never attract talent with pleasant weather or natural beauty like Austin, Boulder, Portland, or pretty much all of California. Further working against Houston are an evermore aesthetically sensitive society and telecommuting technologies that let people work from wherever they like. Why would talent choose to live in Houston? It will take a pretty compelling package of amenities to compete.

But make no mistake, Houston starts the 21st-century with a set of amenities 99% of the planet’s cities would kill for: a vibrant core with several hundred thousand jobs; a profitable and growing set of major industry clusters (Energy, the Texas Medical Center, the Port); the second-most Fortune 500 headquarters in the country (26); top-notch museums, festivals, theater, arts and cultural organizations; major league sports and stadiums; a revitalized downtown; astonishing affordability (especially housing); a culture of openness, friendliness, opportunity, and charity (reinforced by Katrina); global diversity; a young and growing population; progressiveness; entrepreneurial energy and optimism; efficient and business-friendly local government; regional unity; a smorgasbord of tasty and inexpensive international restaurants; and tremendous mobility infrastructure (including the freeway and transit networks, railroads, the port, and a set of truly world-class hub airports). It’s a package I like to summarize as “Global Village, American Dream, Texas Spirit.”

Unfortunately, our “amenity package” is not immediately obvious to outsiders making a short trip to Houston, which is a rare event in any case because Houston lacks a strong tourism draw. It’s not easy to explain to others, despite many attempts to market our fair city. It’s a subtle experience that takes time living here to appreciate. And it’s the kind of package that most appeals to older, more mature adults with families – exactly the group least likely to pick up and move because of deep social and economic ties into their existing hometown, especially in two-income households. Twenty-somethings are the most mobile group in our society, and Houston is simply not on their radar. A recent survey had two-thirds of young college graduates picking their city first, and then searching for a job. If we can get them here, they’re likely to be quite happy longer-term as they settle down, marry, buy a house, and start families. So what tactical improvements can Houston make to keep its talent pipeline full with young professionals?

Continued in Part 2 here.

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At 7:25 PM, May 08, 2008, Anonymous Anonymous said...

Great post. I think it touches on Houston's strengths while also pointing out the negatives.

I think one demographic trend against your "eventually they will get married and grow to appreciate Houston" is the number of people putting off marriage until later in life or sometimes altogether. Granted that Houston is still Texas and a more conservative state which leads to people marrying earlier than the rest of the country. But the trends are pretty clear; people are waiting longer and longer for marriage. Houston needs to better focus on attracting that, often highly educated and ambitious, demographic.

I think Houston can keep its "family friendly" burbs while at the same time increasingly focusing on services for the core. The city's seemingly relentless focus on services for the burbs threw me off when I first moved here, given I am single. But given the area and the city's past I now understand it. But, if you want to attract more highly educated, young professionals from places like New York, San Francisco, Chicago the city needs to provide more. These people are interested, especially given the real estate prices, but you also have to throw them a bone on some semblance of a city lifestyle.

BTW...the new downtown park is a start!

At 8:34 AM, May 09, 2008, Blogger Tory Gattis said...

common_sense: either you've read my essay before, or you're a mind reader for part 2 next week... ;-)

At 9:25 AM, May 09, 2008, Anonymous Anonymous said...

Still don't understand why people worry about this "world class" thing.

I think we already are.

And getting the Olympics has nothing to do with world class.

Is Lake Placid, Salt Lake City, Nagano, Calgary, or Lilihammer World Class? The Olympics is a money pit for cities that get involved. Just look at Athens and the entire country of Greece. They took on mountains of debt to prep for the Olympics and bare made the money to pay it off.

To me, having Olympics is more like a scar versus a plus.

To me, fighting be considered by someone else that is somewhere else as world class is like a woman going out and getting tons of plastic surgery to get noticed.

Why can't we be who we are? We're doing a damn fine job if you ask me.

And the whole urban city concept is already here and expanding. I know many people who have moved here from denser cities the live closer in and love it. They said it took about a month to get used to some of the difference, but they love it now. On the other hand, there are many people from up north that move here because of suburban life. They can get out of the dense city and with the low cost get a great place to live.

At 10:18 AM, May 09, 2008, Anonymous Anonymous said...

i definitely think that the inner development of the city would do alot for the young professional class- living in in New York for four years now, there are so many things that I miss about Houston downtown life that makes it different from the Disneyland qualities of downtown Manhattan: the DIY aesthetic of Montrose, the innovative construction in the Heights....I'm graduating soon and Houston is number one on my list and I'm choosing Houston before staying in NYC permanently: the hope for the future of Houston is incredible and inspiring and I really think that it's going in the right direction. Perhaps the price of gasoline will work to the city' advantage and create yet another wave of movement into the central core leading to more concentration and inner-loop movement and development (as if it's not already crazy).

PS: I'm rooting for the Astrodome to turn into a film production facility- that would surely put my film degree to use in my favorite, hometown city!

At 11:23 AM, May 09, 2008, Anonymous Anonymous said...

I like the film production/studio concept for the astrodome.

The facility is big enough for several sets to be going on.

It make more sense than the hotel.

The movie industry is always looking for places to go that are cheaper to film.

Louisiana and North Carolina invested a lot in courting film and tv production. New Orleans has a massive studio that is leased out for productions.

Also, making it easier to film in the region will also make it easier for your region to appear in films.

I just looked back at how many films that were film in Louisiana in the past 30 years. Some of these could have been done mostly in LA with just a few outside shots in Louisiana. The state has made it easier for a large part of the production to happened in the state.

I think Texas in general and Houston could move in this area.

The Astrodome would be a great place to start!

At 1:59 PM, May 09, 2008, Anonymous Anonymous said...

I completely agree that Houston needs to do whatever possible to attract more young professionals. As a 23 year old who works downtown and soaks up whatever entertainment is in the city, I still am left a little unsatisfied. Going to visit friends in Chicago, NYC, or D.C. always makes me envious of the 23-35 year olds living in those cities.

Don't get me wrong, Houston has a lot going on for young people. However, the city is a family first town. I've lived my entire life in this city (outside of college), but I could see myself moving in a couple of years.

At 6:35 PM, June 11, 2008, Blogger Unknown said...

I just came across your blog about Houston development. Lots of interesting notes! It also stands in a top 10 in google if searched by keywords like "houston future/perpective", etc. You are popular! My compliments! Well done!

In light of recent gas prices I have recently started to think what would Houston become in, say, 2015? I guess this becomes important to realize for more and more houstonians, as energy prices are only going up and Houston is not exactly a compact city to accommodate for short/cheap commute and low electricity cost.

This particularly important for me as I am planning to buy a house/condo any time soon. So buying it wrong will affect me and my family got the next 15-25 years.

My forecast would be this:
- gas prices would be around $10 a gallon
- average household would pay $300-500 of electric bills
- this would finally move American economy to opt for energy and water efficient technologies.
- Greater Houston would become more compact. In other words more suburbia would move inside the loop to be closer to LRT and Metro Buses to save on commute.
- Woodlands and Sugarland will grow, but become ever more expensive, that would draw the middle-class out.
- Single family houses would become more expensive to have because of high energy costs and (probably) higher estate taxes.

What is your forecast? What would be your choice for the real estate in terms of general location and type? Could you also refer me to some of your previous posts covering these issues? Thank you!


At 9:45 PM, June 11, 2008, Blogger Tory Gattis said...

Thanks for the kind words. I suspect higher energy costs will have less of an impact than people suspect. NYT graphic the other day said gas costs are still only 3-5% of the average household costs in Harris County, even with $4 gas. People don't change their lifestyles over a couple % change in their spending allocations.

That said, more people are looking at Metro commuting options and high-mileage cars, and inside the loop real estate is clearly very hot and appreciating well. People are also looking at energy efficiency in their homes. I think there will be more telecommuting. You also might see more employers move to the suburbs to be closer to their employees. The hottest job growth is actually in the Energy Corridor in far west Houston.

Outer ring suburban houses in Houston have historically not appreciated well. I think best bets are inner loop townhomes or places like my own neighborhood of Meyerland, which is still affordable with good schools and short commutes. I'd avoid condos, which don't seem to appreciate well (there's too much competition in unzoned Houston) and typically have high monthly maintenance fees.

Another piece of advice I give: draw an east-west line on a map from the Galleria to Downtown (or just use Buffalo Bayou as a proxy). Because of freeway traffic congestion, it can be hard to cross this line going north-south, esp. at rush hour. Try to make sure your home and job are on the same side of the line, so you won't have to cross it often.


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