Thursday, July 31, 2008

The New Boomtowns

Joel Kotkin has a recent piece out on the new energy and commodity boomtowns, and of course Houston gets prominent placement:
...there has been a shift in the balance of economic power away from financial and information centers like New York, Los Angeles, Boston, Chicago and San Francisco. These cities are deeply vulnerable to the national financial and mortgage crises. New York, according to David Shulman, former Lehman Brothers managing director, faces upward of 30,000 to 40,000 layoffs in its financial sector. San Francisco in the last quarter gave away a Transamerica Pyramid’s worth of office space.

In contrast, things have never looked better for cities now riding the energy and commodity boom. By far the biggest winner is Houston, whose breakneck growth has been fueled by its role as the world’s premier energy city. As with Dubai, this is less a function of the city's proximity of actual deposits (though the Gulf of Mexico represents one of the most promising energy finds in North America), than to its premier role as the technical, trading and administrative center of the worldwide industry.

This prominence is, in historic terms, relatively recent. As late as the 1980s “oil bust," notes historian Joe Feagin, Houston’s energy sector remained “a colony of New York,” where many of key industry corporate and financial decision-makers still lived.

Yet, today, Houston’s national, even global dominance, of the energy business is palpable. With the lure of low-cost office space and housing stock, as well as myriad personal ties among executives and leading engineers, Houston managed to consolidate its position as the predominant center of the oil and gas industry. In 1960, Houston had barely one of the nation’s large energy firms, ranking well behind New York, Los Angeles and even Tulsa; today it has 16, more than all those cities combined.

High wages offered by energy firms -- annual salaries for geologists average $132,000 or more; while blue-collar workers make roughly $60,000 -- have attracted a new generation of skilled executives and technicians to the region, which also enjoys a far lower cost a living than many other major cities. Areas like River Oaks, Galleria and Energy Corridor are home to well-educated, upwardly mobile workers in their late 20s and 30s. The area is growing at a time when these workers are, according to recent census numbers, leaving places like San Francisco, New York, Los Angeles and Boston.

“People from other areas say that you guys don’t make much down there,“ said Houston executive recruiter Chris Schoettelkotte. “[But] the guys from L.A. make the same amount of money in the same field here. We pull them from Wharton, the Ivy League and Stanford and they get paid through the nose… Houston can get the talent.”

Houston’s status as energy capital is also propelling it into the ranks of first-tier cities. Today, Houston has the third largest representation of consular offices. It ranks behind only Los Angeles and New York, and has outstripped traditional commercial centers like San Francisco and Chicago.

It’s energy, along with the port and growing airport, that makes the Texas city a world capital. “When I go overseas people put Houston with New York and L.A.," said Houston salvage entrepreneur Charlie Wilson. “In many cases, Houston is considered to be at the top of the world class because of oil. If you’re in China, you’re looking at Houston because of the oil.”
None of this, however, suggests that San Francisco, Los Angeles or New York are about to be eclipsed by Houston -- much less Fargo or Tupelo. But if the history of cities tells us anything, places well-positioned for growth industries tend to emerge as ever more serious players.

It worked for industrial cities like Chicago, which emerged from obscurity in the late 19th Century; or later for high-tech centers like San Jose, Austin and Boston. If energy and commodity prices stay high for another decade, we may have to get used to a shift in the power of places across the American landscape.

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Monday, July 28, 2008

Adapting Metro Solutions to the new realities

"When the facts change, I change my mind. What do you do, sir?"
- John Maynard Keynes
We need a new conversation in this town, and we need it very soon before it's too late. When we passed the 2003 Metro Solutions referendum, gas was a $1.50 a gallon and commuter demand was low, so we focused it on a core light rail network. I believe there were three main drivers behind that choice:
  1. To encourage growth and denser development in the core while mitigating the increased traffic load that would normally come from such growth.
  2. As a city amenity to enhance quality-of-life (not unlike a new stadium or park), as well as make it a little easier for out-of-town visitors to get around without a car.
  3. As a system to get transit commuters around the core during the day for lunch, errands, or meetings (which actually increases the demand for commuter transit).
In the five years since that referendum, a whole lot of factors have changed:
  1. Gas has almost tripled to $4 a gallon and rising, creating overwhelming demand for commuter solutions.
  2. The oil boom has accelerated our growth even faster, rapidly congesting freeways and, you guessed it, creating even more demand for commuter solutions.
  3. Cost estimates for light rail have more than doubled to over $100m+ a mile (although there are claims Metro will get under this). Even with federal funding, it is now possible Metro will be tying up almost all available funds for the next decade or two to pay off the construction bonds. That means we will be hamstrung from doing any major new commuter transit projects without raising taxes.
So given the new realities, are we still doing the right thing?

I don't think so. It seems clear to me we need to free up as much money as possible, as soon as possible, for new commuter solutions - including express bus and some commuter rail in existing freight rail corridors. We need more express buses from more and larger P&R lots to more job centers on a more comprehensive network of managed lanes. If we don't, I think we're going to see more employers considering places like The Woodlands, Katy, and Sugar Land to cut their employees' commutes while still giving them nice, new, affordable homes in good school districts - to the detriment of the core City of Houston tax base and vitality.

Where is the money for those new commuter solutions going to come from? My proposal would be to scale back the core LRT network to connecting just the major job centers and destinations. That network would still address the first three reasons given at the beginning of this post, but would free up money by temporarily switching the North, East, and Southeast lines to signature bus - saving 15 miles of line and potentially more than $1.5 billion ($900 million local and $600 million federal). None of those lines connect up a major destination that will not also be served by the Main, Universities, or Uptown lines. They have relatively low ridership projections and are through neighborhoods with uncongested streets where buses work just fine for the demand. In this new reality, we can no longer afford speculative rail lines through uncongested low-density neighborhoods without major destinations, while hoping for long-term densification.

That leaves four messy issues to deal with:
  1. The FTA applications are already in the pipeline for a 50% fed $ match on the North and Southeast lines. They've both been rated "medium." If we don't get the money, the decision has been made for us. But if we do, it's pretty much impossible to turn it down. Any way we could get them to redeploy it for better uses?
  2. East End line construction has already started. I don't know how much has been spent or what kinds of contracts we're locked into.
  3. Political backlash from those communities, who voted heavily for the lines. We're not eliminating the lines - just delaying them as higher priorities have jumped ahead of them - but we still need to offer compensation. I think, with a small fraction of the money that was going to go to the LRT lines, we could create vastly improved bus service in those neighborhoods, with far greater frequencies, new routes, more high-speed signature lines, and improved stops and shelters. In fact, I'd bet we could create better overall service for most riders than they would have gotten with the new LRT lines.
  4. Christof and I's starter plan for commuter rail would have to be modified, since it assumes the North and Southeast LRT lines for connections. But the good news is that the money could be freed up to connect the 249 and Galveston lines together through downtown from day one.
If political cover is the issue, one option would be to put a few different solution package options on the ballot this November and let the voters pick.

Like I said at the beginning, there needs to be a citywide conversation about this, and soon. Autopilot is not an option. Otherwise we may find ourselves locked into some very limited and painful choices in the near future. Let me know what you think in the comments.

Update: an article on transit agencies across the country struggling to meet the surge in demand.

Update 2: Backing up my assertion that employers will consider leaving Houston for the suburbs if their employees don't have fast, affordable commuter options, an excerpt from this Chronicle article on the top-in-the-country job growth in Ft. Bend County:

Fort Bend officials acknowledge that most county residents still work in Harris County and will for some time but think that high fuel prices could accelerate employers moving to the suburbs.

"We think more companies will look to locate closer to the work force rather than making the work force travel to them," Wiley said.

"I think that bodes well for us in the future."

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Thursday, July 24, 2008

UH Tier 1 Flagship, rankings, plans, fans, and more

According to the Chronicle today, seven different universities are going to pitch the legislature on being elevated to Tier 1 research university funding status at the same level as UT-Austin and TAMU (extra $70m a year). They may choose one or two, but it's unlikely to be more than that. According to this paper, UH and Texas Tech are the most obvious candidates, with the highest annual research spending. My own thinking is that UH should be able to pull it out *if* they get strong unity of Houston-area legislators. DFW's legislators will be splitting their support between UT-Dallas, UT-Arlington, and the University of North Texas, while San Antonio (UT), El Paso (UT), and Lubbock (Tech) all have relatively small populations and therefore fewer representatives. With top research spending, some strong departments, unified legislative and community support, a good growth plan, and excellent new leadership, UH should be able to win the beauty contest. Good luck. Kuff has more.

Moving on to some smaller misc items for your weekend reading:

"Houston is interspersed with old and new areas, wealthy and poorer neighborhoods, low and high density housing and we can’t even hear the screams of people complaining about a Lowe’s store being constructed next to a residential neighborhood. Imagine that.

Houston grows because businesses can flourish there with little interference by government. If you and I wanted to begin a construction project of winding, tree-lined streets and comfortable homes, we could walk into the building permit section, acquire our permits and begin construction today — just as it should be.

Oddly, there are many people who have served on the City Council who believe the city government has the best answer of what the homes should look like, how tall they should be, how best to construct them and where the building should be placed on the parcel of land. It’s like a giant Sim City computer game played by bureaucrats with other people’s money.

What a great scam."

Finally, a minor item that made me smile recently. I was watching the Universal HD channel on cable, and they started running a promotional commercial for the movies they're showing this month. Each movie got two clips totaling a few seconds, starting with the text "Life is better with..." over the first clip, and then some answer over the second clip relevant to that movie. I instantly recognized the traumatic explosion clip from "Apollo 13" when they started it, saying "Life is better with...". Can you guess the answer in the second clip? A shot of frenetic activity at NASA mission control:
"Life is better with... Houston."

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Monday, July 21, 2008

On a roll in rankings and the national media

I've heard of the, well, "herd mentality" in the national media, but it seems to be definitely the case with Houston lately. We've been getting all sorts of attention, and it seems to be snowballing. First, some recent rankings.

Forbes just ranked Houston the third-best city for young professionals (city profile), behind SF and Boston (Hat tip to HAIF). That puts some pretty high profile cities behind us: #4 NYC, #6 Chicago, #9 Austin, and #18 Dallas (poor Tampa came in last). They base it on high-powered business opportunities for 25-35 year-olds, and they look at success in attracting graduates from top universities. It helped us a lot that they include Rice in the universities they track along with Stanford, Princeton, Harvard, Duke and Northwestern. This year they stopped penalizing cities and states that attract their own grads, so we shot up from #16 to #3 with all those Rice grads, along with high salaries, a low cost of living, and plenty of singles. There's been a lot of fretting over the years that Houston can't attract grads from top schools, but this data seems to put that to rest.
"Anyone who follows the news knows that materials and energy companies have had a good year, and there's a high concentration of the nation's best geospace engineering firms, oil and gas operations companies, and oceanic exploration companies in Houston. Despite its size, the city ranked eighth for the number of graduates it was able to attract from the class of 1998."
Houston is also now Inc.'s #4 best big city for business, behind Raleigh-Durham, Austin, and Salt Lake City, and moving up 13 places from last year (rankings, story). We're the highest ranked of the mega-cities with over a million jobs. Hat tip to Joel.

The Texas Ascendancy Continues

While California is struggling, says Los Angeles-based architect David Hidalgo, Texas is thriving. Hidalgo just completed a large Latino-themed shopping center in Ft. Worth and sees more of his business coming from the Lone Star State. "That's where the opportunities are," he says. "Its costs, regulation, and infrastructure drive you to Texas."

Our rankings certainly bear out Hidalgo's assertion. In many ways Texas has become the new Florida, dominating the top of the list. Among the largest metro areas, a remarkable five of the top 12 best places to do business are from the Lone Star State, ranging from Austin (No. 2) and Houston (No. 4) to Ft. Worth (No. 9) and Dallas (No. 12). Among the small cities, Midland, now ranks No. 1, up 10 places from last year. Odessa and Longview, both big gainers, round out the Texas stronghold on the top portion of the list.

Texas' boom reflects solid growth in a variety of industries, from energy and agriculture to manufacturing and trade. "The big difference for Texas is we did not rely on the real estate bubble," suggests Bill Gilmer, a Houston-based economist for the Federal Reserve. "Our gains are based on jobs elsewhere and that has insulated us pretty well."

And our final ranking: Houston ranked #1 for manufacturing jobs. Hat tip to Brian.
"Texas is home to 24,273 manufacturers employing 1,225,585 workers, ranking second in the nation for number of manufacturing jobs and plants, just behind California. The state accounts for 62 percent of the Southwest's manufacturing jobs and 55 percent of the region's manufacturers.
Houston alone currently accounts for 222,072 industrial jobs -- comparable to the number of manufacturing jobs for the entire state of Oregon. Houston saw employment drop by 1.6 percent over the year, but still ranks first in the nation for number of manufacturing jobs, according to the report."
The rankings aren't the only national press we're getting.
"Houston's newfound energy prosperity comes on top of other economic advantages the nation's fourth-largest city has long possessed. Tax rates are low, as is the cost of living, and the city's political climate is aggressively pro-business—officials steadfastly resist imposing zoning laws, for example, because they could crimp development."
"To the extent that Houston is the energy capital of the world, [it] is not because we have a lot of hardhats, but because we have a lot of technology," said Barton A. Smith, director of the Institute for Regional Forecasting.
Thanks to Jessie and Nick for most of those links.

Finally, in case you missed it, the Chronicle's own Lisa Falkenberg says taking our boom times for granted is a dangerous attitude:

The fact is Houston's bubble can be popped. Each time we've managed to convince ourselves that the next big thing — tech, real estate, oil — was an invincible industry, we've been proved wrong.

"You know, there's probably a good reason for Houston to be looking over its shoulder just a little right now," says Bill Gilmer, senior economist and vice president at the Federal Reserve Bank of Dallas.

As tempting as it is to bask in the fairytale stories of Maserati sales, we should face the crude truth. One of the surest ways to bust a boom is to actually buy into it.

Or, as the local bumper stickers used to say,
"Please Lord, give us one more oil boom. I promise not to blow it next time."
Time to hold up our end of the bargain...

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Thursday, July 17, 2008

Harvard prof on Houston over NYC

Ed Glaeser, the famous (in urban policy circles) Harvard prof, has a great column this week in the NY Sun on Houston over NYC. His analysis covers all the angles. I highly recommend reading the whole thing, but here are my favorite excerpts:
Houston, New York Has a Problem

By EDWARD GLAESER, Special to the Sun | July 16, 2008

The Southern city welcomes the middle class; heavily regulated and expensive Gotham drives it away.

New Yorkers are rightly proud of their city's renaissance over the last two decades, but when it comes to growth, Gotham pales beside Houston. Between 2000 and 2007, the New York region grew by just 2.7%, while greater Houston — the country's sixth-largest metropolitan area — grew by 19.4%, expanding to 5.6 million people from 4.7 million.


Houston's great advantage, it turns out, is its ability to provide affordable living for middle-income Americans, something that is increasingly hard to achieve in the Big Apple. That Houston is a middle-class city is mirrored in the nature of its economy. Both greater Houston and Manhattan have about 2 million employees.

In Manhattan, almost 600,000 of them work in the idea-intensive sectors of finance, insurance, and professional services; only 2% are in manufacturing, and fewer than that in construction. Finance increasingly drives New York City's economy as a whole. By contrast, Houston is a manufacturing powerhouse that makes machinery, food products, and electronics, with a retail sector twice the size of Manhattan's and lots of middle-class jobs.

Housing prices are the most important part of Houston's recipe for middle-class affordability. In Gotham, the extraordinarily high housing costs aren't a problem for the hyper-rich. With enough money, you can live in a spacious aerie overlooking Central Park, shop at Barney's, eat at Le Bernardin, and send your children to Brearley or Dalton.

The abundance of poorer immigrant New Yorkers, in turn, tells us that for people simply seeking a lifestyle that beats rural Brazil, the city's many entry level service-sector jobs, wide array of social services, and extensive public transportation can offset high apartment prices.

But what if, like most Americans, you are neither a partner at Goldman Sachs nor a penniless immigrant? Consider an average American family with skills that put them in the middle of the U.S. income distribution — nurses, sales representatives, retail managers — and aspirations to a middle-class lifestyle. What kind of life will such people lead in Houston and New York City, respectively?

From there, he goes into an excellent analysis of salaries, housing, taxes, transportation, commute times (and "quality"), and construction costs. Bottom line: our salaries are slightly lower, but our cost-of-living - and the higher quality we get for that cost - end up with us way ahead. Really, my excerpts don't do it justice. Please read the whole thing. Continuing:

You thus get much more house in Houston and pay a lot less for it. Small wonder Houston looks so good to middle-class Americans.


Big-city boosters may like to think that rising gas prices will end suburban sprawl, but a far more likely response to expensive oil is a large switch to more fuel-efficient cars.


The Houston family is effectively 53% richer and solidly in the middle class, with plenty of money for going out to dinner at Applebee's or taking vacations to San Antonio. The family on Staten Island or in Queens is straining constantly to make ends meet.


The permitting process in Manhattan is an arduous, unpredictable, multiyear odyssey involving a dizzying array of regulations, environmental, and other hosts of agencies. A further obstacle: rent control. When other municipalities dropped rent control after World War II, New York clung to it, despite the fact that artificially reduced rents discourage people from building new housing.

Houston, by contrast, has always been gung ho about development. Houston's builders have managed — better than in any other American city — to make the case to the public that restrictions on development will make the city less affordable to the less successful.


But Houston's success shows that a relatively deregulated free-market city, with a powerful urban growth machine, can do a much better job of taking care of middle-income Americans than the more "progressive" big governments of the Northeast and the West Coast.

The right response to Houston's growth is not to stymie it through regulation that would make the city less affordable. It's for other areas, New York included, to cut construction costs and start beating the Sunbelt at its own game.

Mr. Glaeser, a professor of economics at Harvard University, is a senior fellow at the Manhattan Institute. This article is adapted from the forthcoming issue of City Journal.

As always, comments are open, or you can check out the NYC reaction or the HAIF discussion thread. I like this comment in particular:
The way I have always seen it is that you move to NYC to feel better about yourself. But you move to Houston because you already feel good about yourself.
Thanks to Melissa, Brian, and Chris for the link.


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Monday, July 14, 2008

Why there aren't more New Urbanist developments

A while back, the Austin Contrarian asked why there aren't more New Urbanist mixed-use developments. He articulates several possible barriers and potential solutions, but I wanted to pass along my own theory I posted in the comments.

From his link:

"The problem is that, despite their often stated preference for walking, Americans have developed a taste for low prices and variety, and they don't mind driving great distances to get them."(although that might be changing)
Big boxes serve most of our retail needs very well: groceries + hardware (Lowe's or Home Depot) + misc stuff (Wal-Mart or Target). Many other retail needs fall in the "errand" category - done from the car while going to/from somewhere else, like work: banking, dry cleaning, Starbucks, etc. So start by taking most of that slice of shopping away from new urbanism in a historically car-based city. Here's the problem with supporting NU/mixed-use developments with "the rest" of our retail needs:

Stores need a pretty high volume of customer traffic to be viable. Foot traffic from a few stories of apartments or condos on top are nowhere near enough, so that means people have to be drawn there in a car from the surrounding city. Little or no frontside parking means people have to park a bit farther away and walk (like maybe a backside garage). People are only going to do that if there are a variety of stores/restaurants they are interested in after they get out of their car (if they're only going to one specific place, a strip mall or "lifestyle center" is far more convenient). That is essentially the definition of a "mall" - a collection of retail compelling enough people are willing to park at some inconvenience and walk around for a while.

To succeed, these developments essentially must become an open-air mall with apartments/condos on top (think of the Sugar Land and Woodlands town centers). That's fine, but realistically, a city can only support one mall every few square miles - putting a pretty low limit on how much new urbanist development a city can support. That, and, of course, in any existing city, those malls already exist somewhere, and so a new development must displace an existing one that already has critical mass and has probably cornered most of the premium retailers (how many Banana Republics can a city support? ;). Doable, and some clearly do it and succeed, but that doesn't mean it's not very challenging.

That, in a nutshell, sums up the major headwinds on more mixed-use new urbanist developments: they are essentially malls, there's a limit to how many a city can support, and they have to displace the existing entrenched retail districts/malls that are already there. Note that those headwinds come from the retail side. As he points out, clearly there is plenty of demand on the residential side - it's getting the matching retail to work that's tricky.


Saturday, July 12, 2008

My solution to the national housing crisis

Offer an immediate green card to any foreigner that buys a house here (along with their family of course, and subject to a few other filters like no criminal record and a minimum price on the house). The green card is only good as long as they continue home ownership - no new foreclosures allowed. The instant surge in demand would prop up prices and stop the cycle of foreclosures and neighborhood decline (and failing banks). If we want more specific geographic targeting where housing is the weakest, states could opt in or out of the program, or even define narrower areas inside their borders.

Update 2/11/09: Thomas Friedman of the NY Times backs the same idea, as does the economics blog Marginal Revolution.

Update 3/17/09: More support from a Wall Street Journal op-ed.

Update 4/22/09: Columnist Scott Burns backs the same idea from economist A. Gary Shillng and real estate developer Richard Lefrak.


Thursday, July 10, 2008

ULI CHF panel on Houston's future (+Metro North LRT)

I attended the ULI CHF luncheon today hoping for some new material from their panel, but, for the most part, it covered the same ground as the February event. I'm not going to rehash that material, so if you haven't seen it (or want a refresh), it's here and here. The issues and recommendations haven't changed and my agreements and criticisms haven't really either. Mike Snyder had some additional coverage in the Chronicle this morning, with a focus on the 1960 area.

A few new thoughts and observations:
  • More calls for homes closer to jobs. If you draw a 1-mile circle around every major job center in Houston, there are all sorts of housing choices around each (another benefit of no-zoning). But people still choose to live elsewhere - maybe for a better house value, neighborhood, or schools - or a spouse that works elsewhere. And then there's the fact that people are changing jobs every few years in the modern economy, but don't want to move every time they do. I'm skeptical at how realistic this goal is.
  • I was slightly annoyed by constant references to "Houston's carbon-based energy industry" in their report, which seems like a backhanded way for some resentful people with environmentalist planner leanings to say that we're just lucky and it's not gonna last. I'd like to point out Houston grew pretty well in the 90's too with $20 oil (approximately equal to 'free' by today's standards). Maybe we're doing some things right besides our industry mix?
  • I'm not a fan of public visioning processes (one of their core recommendations) because they tend to devolve into utopian wish lists and trade-offs are ignored, but I did like the idea that somebody (HGAC?) needs to get a better understanding of all the complex, systemic interdepencies so we can come up with better solutions than ones that are narrowly focused on specific problems or projects.
  • Alan Clark of HGAC has some good ideas on "fixing" Highway 6 and 1960 along the same lines as what's being done for Westheimer. He also made an amusing crack about HGAC "having a few carrots, but no sticks" to encourage good development - which is probably a wise approach. HGAC does have a funded program to encourage "livable centers."
  • They had a good insight about two sources of value creation: being close to good transportation infrastructure (well, duh), and "master developer environments across multiple parcels controlled by different owners" creating value from "adjacency predictability." With a focus on the latter, they had a graph showing how single projects have peak value around year 5 then decline, while master projects - like downtowns - start slow but build high and sustainable value over decades. We obviously know how well these work with private developers in the suburbs (very well), as well as in smaller, zoned and controlled cities like the villages (mixed) - but how to do it inside of a big city like Houston? Answer: special purpose districts (often TIRZs), like we have in Downtown, Uptown, Westchase, Greenspoint, the TMC, and others. These voluntary districts are unzoned Houston's answer to capturing the "master planned" value premium in certain areas. To a much lesser extent, strong homeowners associations do the same thing in residential neighborhoods.
  • On the problem of aging MUDs in unincorporated areas that can no longer be counted on to be annexed, and they need to be part of a larger and more efficient water-sewer system: at first I thought special-purpose annexations by Houston might be the answer, but then you have the problem of taxes and control without representation (i.e. voting). A better solution might be to spin out CoH water and sewer services into an independent county authority with directly elected reps that can integrate everything (similar to the county flood control district).
My recommendation for the first step based on this report? We clearly have regional problems that need to be addressed. HGAC doesn't have (much) direct power, but it can act as regional facilitator and reporter on issues like air and water quality, transportation, environment, and even education (particularly workforce training). To some extent it's already doing this, but I could see it taking it to the next level and issuing an annual "report card" on our top 10 regional issues - including documenting efforts to address them and their progress, along with recommendations. For each issue, that report will either show progress, or prod the right authorities to start cooperating (cities, counties, state, etc.). If we find too many important regional problems aren't getting adequately addressed through these cooperative efforts, then it might be time to start considering a stronger regional authority to make things happen.

Overall, Houston is doing very, very well. Radical changes are not needed and may even be dangerous. It's like that basic rule of health care: "First, do no harm." That calls for a careful, incremental approach, like the role I just described for HGAC.

UPDATE: GCI's take.

One last item on rail: Based on the Chronicle article on Metro's North LRT line in the FTA pipeline, we're looking at $116 million per mile (yes, that's still a Minute Maid Park every two miles) and $34K of capital investment per daily boarder ($68K per daily round trip passenger), leading one commentor to say:
So it is cheaper to buy each passenger not one but two brand new Toyota Priuses and gas them and buy their insurance than it is to build the train.
And another:
...applying FTA mandated financial amortization towards the project, it is going to cost about $3.50 per passenger-mile in order to attract a new rider to using transit over the current bus routes which have serviced the area for decades if we employ light rail as the means to do so. Note, that I did not say $3.50 per gallon of gasoline. I said $3.50 for one new rider to travel one mile. So, making an assumption that a new transit rider will be riding light rail for a five mile trip, that single trip will cost taxpayers $17.50. Making a round trip will cost taxpayers $35.00. And no, that is not fuzzy math.
I haven't been a big fan of the North line, although it would be critical to a short-term 249 commuter rail line which would increase ridership and drop per-rider costs significantly. I'm curious what my readers think. Does this sound reasonable? Looking forward to the comments.

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Houston nation's fastest growing city last year

We're officially the fastest growing city in the country last year (HAIF hat tip), adding almost 39,000 people (1.8%) inside the city limits to 2.2m. Phoenix, San Antonio, Forth Worth, and New Orleans round out the top 5 (NOLA bouncing back from a 50+% cut post-Katrina).

Peter Brown often laments that Houston is not getting its "fair share" of growth vs. the metro, but we seem to be doing better than every other city in the country, including much larger NYC, as well as LA and Chicago - and even better than smart growth Portland on both a numbers and percentage basis (since 2006 and even 2000, where they only grew 4% vs. our 10%). One of Peter Brown's stated models for master-planned growth and densification, Dallas only did one-quarter as well (one-fifth as well since 2000) on a population base about half ours.

When looking at gains since the 2000 census, we come in #2, just behind NYC on a base one-quarter their size (266K/8m vs. 254K/2m, or 13% - same % as ultra-hot Austin). Unlike Phoenix, SA, and FW, we don't actually have vast swaths of undeveloped land in the city limits that are getting built out with new suburban development - this growth is coming from redevelopment and natural densification driven by market forces and not impeded by our light regulatory touch - making us pretty unique among the growth leaders.

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Tuesday, July 08, 2008

More Houston top rankings and kudos, IAH A380, and more

Again, the smaller miscellaneous items have stacked up beyond one post, so here's half of 'em:
"Do not move to Austin. I live there now. There are no jobs, unless you want to be a cashier at Target for $9 an hour. Yes, Dell has laid off and will continue to lay off. Most everyone who works there says "Dell, no we call it hell". I grew up on OC (Mission Viejo) and thought Austin would be a good escape from the So Cal attitude I got so sick of over the years. Nope! Austin is the next OC. If Trader Joe's ever opens there, I'm leaving. I doubt they will since Whole Foods is headquartered in Austin and I'm sure they have a whole team of lawyers sitting in the trenches just waiting for the TJ's people to come. Do not move to a college town, and do not move to a place where MTV has done a "Real World" series. Learn from someone who made these mistakes. "

"The train is from one and a half to five times as expensive (vs. a plane), and takes four and a half to five times as long, turning a four-day trip into seven or eight days...

It’s not a matter of the government not supporting Amtrak. It’s not a matter of the U.S. not having the “will” to have the best passenger trains in the world. It’s that passenger trains, using any current technology or any technology we see coming in the foreseeable future, simply can’t compete with airlines.

It’s just arithmetic."

  • A very cool rumor that Emirates may soon be flying the new A380 double-decker mega-plane to IAH. Their nonstop Dubai service has been extremely successful - so much so they need a bigger plane. It will require double-decking one of the gates in Terminal D.
  • Finally, Joel Kotkin and others have started a new web site called "The New Geography." Good stuff definitely worth exploring. Here's one recent article on the decline of Chicago:
"In conclusion, Chicago’s long decline continues. In the coming years, public pension commitments will test even the high tax tolerant Chicago residents. Look for low regulation, low tax Houston to overtake Chicago in population in the next eight to 15 years."
They have 2.8m, and we have 2.2m, in the city limits - so we'd have to add a pretty good chunk of people inside the city to pass them and go from 4th to 3rd-largest city in the country. Possible, but not easy. We won't be passing their metro population (3rd largest) anytime soon: 9.8m vs. 5.6m.
I'll be attending the Center For Houston's Future ULI luncheon on Thursday (sold out), and hopefully a blog post on it that night, so the rest of the misc items will have to wait until next week.

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Friday, July 04, 2008

Doing commuter rail right by 2012

OK, after attending a couple of public meetings, reading the H-GAC report summary, and having an in-depth meeting with Christof (and thinking about his five questions), I think we've come to a consensus on what the right answer is for a "phase 1" commuter rail program (here's my first post on the topic). Those who remember my "Commuter rail is the wrong ride" op-ed from a few years ago - which Barry handed out at the H-GAC public meeting - might wonder why I've changed my mind. I will lay out the reasoning, as well as the narrow set of circumstances where I think it makes sense. I'm not now a blanket supporter of commuter rail. HOV/HOT express buses that travel nonstop at high speed and circulate at their destinations are still the best overall commuter transit solution for the many decentralized job centers of Houston.

The reasons commuter rail can make some sense now for Houston:
  1. I agree with County Judge Ed Emmett that our metro growth is so fast now, and projected to be so large over the next few decades, that we will really need to tap all sources of mobility capacity that we can.
  2. Freight track corridors have been identified that are underutilized, and can support scheduled commuter services. The capacity is there, and we can tap it at marginal cost.
  3. For the most part, the new services will not overlap or eliminate Metro express HOV commuter buses. The goal is to add all-new service and capacity, not replace what we already have.
  4. Commuter rail is more comfortable for very long haul, connecting to places well outside the Beltway. In particular, passenger service stretching from TAMU College Station to Prairie View A&M to NASA JSC Clear Lake to UTMB Galveston is attractive for economic development purposes by tying more academic and technological brainpower to our city. (similar to how Yale and Princeton are tied into NYC)
  5. $4 gas (and increasing) is driving up demand for commuter transit, and Metro cannot buy buses or expand P&Rs fast enough. In fact, some of these rail services may free up more express buses for other in-demand routes.
The trick is doing something helpful, quickly and affordably. The hardest, most expensive, and most controversial part is inside the 610 loop. There are calls for expensive elevated structures and new routes through neighborhoods that will trigger a firestorm of protest. If I heard Judge Emmett right, he wants to do a "quick and dirty" implementation that stops at the loop and transfers to buses. That could be a mess. Cheap, yes, but offering bad service that attracts few riders and undermines public support. We believe he is partially right focusing on Galveston and 290 lines, but there are tweaks that can make for a much better start.

Here are the elements of our proposal:
  • Galveston line that comes all the way in to just east of downtown, with transfers to the new East/SE LRT lines to get into downtown. Christof has worked out how this is possible without using busy freight lines or building elevated structures (which he will detail in his own post soon). The line will have few if any stops inside the Beltway and will not replace Metro HOV services inside the Beltway.
  • Since a 290 line cannot (currently) make it to downtown, would not actually reach the Uptown LRT (it stops at the NW transit center), and is already well served with HOV bus service, it should not be part of a phase 1. Instead, some freight track improvements need to be made first inside the loop (along the Terminal subdivision - and they're needed regardless of commuter rail), which Christof will articulate in detail. Those will pave the way for a future 290 service that does not use the empty RoW through the residential Heights.
  • Instead, the real short-term opportunity is a 249 line to Tomball through the vast 1960-area suburbs, as well as picking up the back side of The Woodlands. This would attract many riders who do not currently have good access to HOV express bus service, and it would take traffic pressure off of both 290 and 45N. In fact, 249 ranked higher than 290 in H-GAC's study (see figure ES-7) This starter line would be used as is, and new track would not be rammed through the neighborhood north of the 290-610 interchange (as shown in the H-GAC plan). Instead riders would ride it all the way in to the North Metro LRT and transfer near Northline mall. A bus transfer stop would be an option down Mangum for those going to Uptown.
  • As part of this phase 1, Metro would experiment with running express LRT trains from the Northline transfer into downtown. The idea is that, after transferring off the 249 commuter train, most of those riders would want an express direct to downtown, with no slowing stops along the way. Also, even if the train stops normally from downtown on, it would make connections from the 249 commuter rail to the med center tolerable (vs. 45+ mins with all local stops). There are different ways these express cars could be run, even without a third track, via simple timing or using crossover tracks for passing (or maybe even via third tracks at selected stations). The expresses might be slightly disruptive to the local trains (making them crossover and/or freeze at certain points for a couple minutes), but it would be worth it for the enhanced commuter service, and would only be used for a handful of inbound trains in the morning and outbound trains in the afternoon rush hours that connect specifically with the infrequent commuter trains. If the expresses can be made to work well on the North line, they could be considered for other LRT lines in the future as needed for other new commuter rail connections.
  • For phase 1, no expensive hub, and only minimal maintenance facilities. Each of the two lines might have separate small maint facilities, or they could be routed at off-hours along the freight tracks to a central facility inside the loop (like Eureka yards). The freight tracks inside the loop are too congested to support scheduled commuter rail, but they still have enough capacity to shuffle around out-of-service commuter trains when needed (as long as they are not in any hurry).
  • The phase 1 target is 2012, to coincide with Metro's LRT plan, since it obviously relies on those connections.
Bottom line: we think both lines might be doable for a total capital cost less than $1 billion, vs. the $3 billion in the full H-GAC starter plan. That might sound like a lot, but it's only about twice what the Main St. LRT cost, and it's about 80 miles of track vs. 7.5 for Main St. It's also way cheaper than any new freeway capacity serving the same places.

Long-term potentials include a 290 line that connects on to Prairie View and College Station while continuing through the core on to Galveston (parents: easy-ship your teens to the beach and theme parks during the summer!), a downtown connection at Amtrak/UHD that would be more effective than Metro's northern intermodal terminal, and maybe lines to Alvin/Pearland and Ft. Bend. That's all speculative at this point, and I'm not prepared to pass judgment on their cost effectiveness. But this 2-line, "lite phase 1" proposal seems like it could be a cost effective way to "test the waters" by going after the low-hanging-fruit commuter rail opportunities while taking advantage of the Metro Solutions core rail network to save money and neighborhood disruption.

I will update this post with a link to Christof's excellent new maps when they become available (and here they are). If you know anyone attending Judge Emmett's commuter rail summit this coming week, please pass this along for their consideration. Much appreciated.

UPDATE: Christof's much more detailed explanation of this plan, with great maps.

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Tuesday, July 01, 2008

Spring 2Q08 Highlights

It's time again for the quarterly highlights post. These posts have been chosen with a particular focus on significant ideas I'd like to see kept alive for discussion and action, and they're mainly targeted at new readers who want to get caught up with a quick overview of the Houston Strategies landscape. I also like to track what I think of as "reference posts" that sum up a particular topic or argument.

Don't forget we offer an email option for the roughly twice/week posts - see the Google Groups subscription signup box in the right sidebar. An RSS feed link (Atom) (or RSS 2.0) is also available. As always, thanks for your readership.

And from Winter 1Q08:

And don't forget the highlights from the first three years. For what it's worth, I think the best ideas are found there, often in the first year (I had a lot "stored up" before I started blogging).