Monday, November 30, 2009

Houston one of five cities that will rise in the new economy

The Christian Science Monitor recently named Houston one of five cities that will rise in the new economy, along with Boston, Seattle, Huntsville-AL, and Fort Collins-CO. Not bad company. In fact, they open the main article with us:
In Houston, the Texas Medical Center is expanding so quickly that it will soon become the seventh largest downtown in the US. By itself. The hospital complex brims with restaurants, shops, and hotels, and employs 100,000 people – the population of Billings, Mont.
Later they mention the power of affordable housing to attract young talent. They also have detailed profile article on Houston with some good excerpts:

...Many say the city is poised to do well because of its ties to the global marketplace. Houston is home to NASA, as well as the largest medical complex in the world, the second-busiest port in the nation, and a strong international business sector.

...“To me, Houston is the perfect intersection of old industry stepping up to advance leading-edge industries,” says Vivante’s founder and president, J. David Enloe Jr.

But Houston has much more than energy experience powering its future. It is the largest US port in foreign tonnage and the second largest in total tonnage. (including strong exports)


Then there is the Texas Medical Center, which may be Houston’s version of the Great Pyramids, only with windows and an antiseptic smell. More than $3 billion is going into expanding the Med Center’s footprint from 30 million to 40 million square feet – making it larger than the size of the area inside Chicago’s Loop. The complex currently serves up to 65,000 patients a day, says Richard Wainerdi, the CEO.

Still, even with the port, the medical center, and NASA, the petrochemical industry remains the flywheel of the economy – accounting for about half the area’s total output. Eager to be in the vanguard of the New Economy, city officials are trying to redefine Houston as more than just an oil and gas capital. They want it to be an energy capital – including renewables.

Last summer, for example, Houston became the No. 1 municipal purchaser of green power in the nation, with 25 percent of the city’s total electricity load coming from wind energy. (Texas leads the US in wind-energy production.)

The article also includes a couple of nice Houston pictures here and here.

Hat tip to Jessie.

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Wednesday, November 25, 2009

Houston a green capital? plus top rankings, reducing crime, and elevated busways

Some smaller items for your reading pleasure when escaping the relatives or shopping of Thanksgiving break (or work, if you're stuck there this afternoon or Friday).
"The Daily Beast set out to definitively sort the best and the worst, undertaking a comprehensive study that heavily factored in on-time arrivals and departures, and also examined safety records, tarmac nightmares, airport accessibility, the baggage process, security waits, and amenities."
Here's the IAH profile for the story. Hat tip to Jessie.
"The lesson of High Point is that you can reduce crime by making credible threats, without having to lock up so many people. To deter, a punishment must be swift, certain and severe.
Mr Kleiman suggests several other promising, non-macho approaches to curbing crime. Raise alcohol taxes. Start school days later to prevent after-school crime. Force probationers to wear GPS tags, thus making probation a tough (and much cheaper) alternative to prison. Americans should experiment with such ideas, he says, and if they are serious about justice, the object should be to cut crime, not to make criminals suffer."
Lone Star Luck

In No. 2 city San Antonio, home to four military bases, and Austin, our third-ranked city and the state seat of government, municipal jobs supplement Texas' robust energy sector. In Dallas (No. 6), it's a thriving tech industry that buffers it from energy highs and lows. Although Houston (No. 8) is invested mostly in oil, it has diversified its energy industry beyond oil rigs into refining and chemicals manufacturing.

What's more, the state's housing prices never ascended to the unsustainable levels the rest of the country hit at the peak of the housing bubble. Thus, it didn't crash as hard. These factors have toughened the local economy against a recession that is inextricably tied to real estate.

"Texas didn't have as big of a boom," says James P. Gaines, research economist at the Real Estate Center at Texas A&M University. "So we're not having anywhere near the kind of bust."

"Houston actually makes a lot of sense. Unlike many places in the country, Texas’ electricity grid isn’t under stress, for starters. And from an environmental perspective, it’s fairly clean, with a lot of juice coming from wind farms and natural-gas fired plants.

Electricity-guzzling cars that up the demand for natural-gas for power generation could even make the region’s fossil fuels industry happy, says says Kenneth Medlock, an economist at Rice University. And since most cars would charge at night, Texas’ booming wind-energy industry would find new customers, too.

In the end, America’s fourth-largest city epitomizes the country’s love affair with the car. Unlike in green urbs like San Francisco or Seattle, it’s all but impossible to live here without wheels—so they might as well be electric. It will probably be cheaper and easier to electrify urban sprawl than rein it in altogether.

Who knows? Maybe in a decade Houston’s famed ArtCar parade will be a largely electric affair."

(as I've been saying on this blog for a while: transit will not take over more than a tiny percentage of trips, the personal vehicle is now a permanent part of society, it will just change propulsion technology)

  • Speaking of being a green capital: algae fuel is picking up momentum, and biofuels are Houston's best bet for leveraging our energy infrastructure skill base to lead the next generation of energy technologies.
That's it for this round, but keep 'em comin' Jessie (and everybody else).

Hope you and yours have a Happy Thanksgiving.

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Thursday, November 19, 2009

Five steps to save the Obama presidency

I usually try to avoid politics on this blog, but this Forbes op-ed from Joel Kotkin on saving the Obama presidency not only resonated with me, but also touches on some of the subjects I cover
here. Describing the administration as " run by the Chicago machine" is painfully to the point. He notes:
I suggest these things because, for all his missteps over the past year, Barack Obama is my president and I want him to succeed. But to do so, first he needs to hit his own reset button -- and the sooner the better.
His five recommendations are:
  1. Forget the "Chicago way"
  2. Focus on real jobs, not favored constituencies
  3. Step on the (natural) gas (clean energy independence that would be a big boost for Houston)
  4. Rediscover America
  5. Chuck the Nobel; Embrace Exceptionalism
#4 is directly relevant to common topics on this blog:
Obama's people need to understand that 80% of America live in suburbs or small towns. They do not want to live in dense cities or realize a move there would mean living in less than idyllic conditions. If Obama wants to shape a green America, he must find ways that work with the majority's preferences.

But so far the president's housing, transport and planning advisers seem to be pushing the death of suburbia and promoting ever more densification. It's hardly surprising, then, that suburbs and small towns feel left out. After finally starting to inch toward the Democrats, they are now turning again to the right. If Democrats want to retain their majority, they need the strong support of these constituencies -- without it the Congressional majority will be gone by the end of the second term, if not the first.

I think it's a problem all presidents face: no matter how centrist they aspire to be, they have to deal with extreme left or right Congressional leadership (since the most lopsided districts tend to have the most stability and therefore seniority) - and the farther down administration appointees get from the President, the more extreme left or right they tend to be - because that's the supporter base they draw from. These extremists undermine centrist Presidents in the million little actions that happen every day in DC. It's an inherent flaw in the system, and the system needs to be fixed.

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Monday, November 16, 2009

Houston=Brooklyn? plus rankings, not-so-smart growth, anti-poverty incentives, mixed-use difficulties

Clearing out some smaller items:
  • In case you missed it, Randal O'Toole had a must-read Sunday Chronicle op-ed on how smart growth would not save Houston from future Ashby high-rises, and in fact would create more.
  • New Geography: Smart Growth loses Houston mayor's race. Hat tip to Josh.
  • Has anybody seen a chart similar this one for Texas or other states? Note to politicians: incentives to stay in poverty are not good.
  • An older Dallas Morning News article I recently came across on the difficulty of filling the ground-level retail space in mixed-use projects, which seem to be more popular with planners than with retailers, usually because of the difficulties of access/parking. The upper-floor residential is not enough to support the shops or restaurants. This may become more of a problem in Houston as development happens under the Urban Corridors ordinance near the LRT stations. Hat tip to Neal.
  • From the national DMIBlog: Is Houston becoming the new Brooklyn? Not much news here, but might be of interest if you want to see an outsider's perspective. Hat tip to Jessie.
  • The Milken Institute has released its 2009 Best Performing Cities list. Houston scores very well at #5, up from #16 last year and by far the largest metro in the top 10. Austin is #1, and Texas has 9 of the top 25. Hat tip to Neal.
  • Continuing the rankings theme, a few cultural ones from Travel and Leisure magazine (out of 30 cities):
  1. Theater: Houston #5, Austin 23, San Antonio 24, Dallas 27.
  2. Museums: Houston #8, Dallas 24.
  3. Classical Music: Houston #5, Dallas 22.
A nice sweep of our in-state rivals, and not a very close one at that. Hat tip to Brian.

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Thursday, November 12, 2009

The essence and future of TX vs. CA

I know there have been a lot of articles and references to Texas vs. California recently in this blog, but, well, there's a new one with some genuinely new contributions to the argument ("America's Future: California vs. Texas", Trends magazine, hat tip to Jeff). And it says some nice things about Houston too, so how can I pass on it? The beginning of the article is here - including an overview of both states' situations - but here are some key additional excerpts:
...Both the Brookings Institution and Forbes Magazine studied America’s cities and rated them for how well they create new jobs. All of America’s top five job-creating cities were in Texas. It's more than purely economics and regulation can explain, though. Texas – and Houston in particular – has a broad mix of Hispanics, whites, Asians, and blacks with virtually no racial problems. Texas welcomes new people and exemplifies genuine tolerance. When Hurricane Katrina hit, Houston took in 100,000 people. Not surprisingly, Houston has more foreign consulates than any American city other than New York and Los Angeles.
But, how did this happen? What’s wrong with California, and what’s right with Texas? It really comes down to four fundamental differences in the value systems embodied in these states:

First, Texans on average believe in laissez-faire markets with an emphasis on individual responsibility. Since the '80s, California’s policy-makers have favored central planning solutions and a reliance on a government social safety net. This unrelenting commitment to big government has led to a huge tax burden and triggered a mass exodus of jobs. The Trends Editors examined the resulting migration in “Voting with Our Feet,” in the April 2008 issue of Trends.

Second, Californians have largely treated environmentalism as a “religious sacrament” rather than as one component among many in maximizing people's quality of life. As we explained in “The Road Ahead for Housing,” in the June 2009 issue of Trends, environmentally-based land-use restriction centered in California played a huge role in inflating the recent housing bubble. Similarly, an unwillingness to manage ecology proactively for man’s benefit has been behind the recent epidemic of wildfires.

Third, California has placed “ethnic diversity” above “assimilation,” while Texas has done the opposite. “Identity politics” has created psychological ghettos that have prevented many of California’s diverse ethnic groups and subcultures from integrating fully into the mainstream. Texas, on the other hand, has proactively encouraged all the state’s residents to join the mainstream.

Fourth, beyond taxes, diversity, and the environment, Texas has focused on streamlining the regulatory and litigation burden on its residents. Meanwhile, California’s government has attempted to use regulation and litigation to transfer wealth from its creators to various special-interest constituencies.
They go on to make six forecasts:
  1. ...expect to see California’s loss of jobs to Nevada accelerate...
  2. ...expect to see a backlash in California and across the country against regulations, especially green initiatives that can’t clearly demonstrate a positive ROI...
  3. Watch for the smart money, including venture capital, to begin migrating to Texas for start-ups in many areas, including energy, info-tech, manufacturing, and biotech. Just as Delaware’s tax laws once encouraged numerous businesses to incorporate there, even when they had no connection to the state, Texas will become a magnet for new businesses by offering cheap land, a favorable regulatory environment, a business-friendly culture, and a large supply of skilled labor. Unless California revamps dramatically, expect to see its economy languish, even as the recovery takes off.
  4. To make its business climate even more business-friendly, Texas will invest heavily in secondary education and work hard to attract the best talent to its research universities (note the recent Tier 1 proposition and funding). Keep an eye especially on the University of Texas, which already has a first-rate campus and faculty. Within 10 years, UT, as the locals call it, may well rival Stanford or Berkeley.
  5. Other states will adopt tort reform measures pioneered in Texas. Unlike California and most other states, Texas has been aggressive in minimizing the enormous burden of frivolous lawsuits...
  6. Look to Texas to become a cutting-edge cultural mecca. Houston has always offered a vibrant cultural scene, ever since the Alley theater company was founded there in 1947 by Nina Eloise Whittington Vance. In the 1950s, John and Dominique de Menil moved to Houston with one of the most significant private collections of art in the world and began donating art and money to the Houston Museum of Fine Arts. Both institutions have grown to world-class status since then. In the coming years, this trend will spread to the major cities of Texas (take that, Dallas!), attracting the best talent and money and shifting the cultural balance of the nation away from New York and San Francisco.
I can personally vouch for #5. I was just visiting my brother out in CA, and a friend of his with a small store was being hit with a large disability discrimination lawsuit for a minor oversight (handicapped parking was marked on the ground and had the requisite walkways and ramps, but lacked a pole sign). Evidently this has become a cottage industry in California, where lawyers guide the disabled through stores looking for very minor violations of a vague law (things like high shelves or tables), then sue (expecting a quick settlement, of course). Under CA law, discrimination guilt is assumed if there's anything in the store the disabled can't do that a normal customer can do, regardless of the availability of employees to provide assistance. His friend was clearly exasperated with the unwinnable situation. Just plain nuts.

As Jim Goode says, "You might give some serious thought to thanking your lucky stars you're in Texas."

Update: a related op-ed. Hat tip to Ginny.
Update 2: Reposted over at New Geography and further commented on over at The American Enterprise Institute.

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Monday, November 09, 2009

Planes vs. high-speed vs. 'higher-speed' rail in Texas

This story on the Eurostar London-Paris high-speed rail caught my eye yesterday in the Chronicle Travel section. I have ridden it before, and it is a wonderful service. The speed is deceptively quiet until a train going the other direction passes by in the blink of an eye at a 300mph net speed difference. And London and Paris have great local transit connections at each end, of course. It was during my McKinsey management consulting days, and the travel department bought me a first-class ticket on a non-peak train, so I ended up with an entire first-class car, and hostess, to myself. Not bad at all...

But I digress. What jumped out at me from the article was the one-way prices:
  • First class: $425
  • Second class (i.e. coach): $300
  • Advance purchase restricted second-class/coach: $80-$160
Now, since the most touted route for Texas is DFW-Houston, let's look at comparable flight prices:
  • Continental first-class walk-up fare: $264
  • Southwest walk-up coach: $136-$151
  • Southwest advance-purchase restricted coach: $49-$106
So, for a route of roughly the same distance, HSR is roughly twice as expensive as current airplane service, which, by the way, is one of the most frequently serviced routes the country between Southwest, Continental, and American.

So tens of billions are spent to provide service that is twice as expensive as we already have? No wonder everybody wants the Feds to pay for it.

A more cost-effective alternative for Texas may be "higher-speed rail" running around 100mph on existing tracks (the 'higher' is relative to existing trains, not HSR, so we have the confusing situation of higher-speed rail being slower than high-speed rail). More here and here, as well as a Texas track map. This would also be compatible with the plans for 290 and Galveston commuter rail.

I've been collecting some other HSR links for a while now that are worth passing on:

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Thursday, November 05, 2009

Texas schools are better than you think (but still have a long way to go)

For a while I've been wanting to do a post on this McKinsey report titled "The Economic Impact of the Achievement Gap in America's Schools" (main report, supporting charts).

First, the (very) bad news:

This report examines the dimensions of four distinct gaps in education: (1) between the United States and other nations, (2) between black and Latino students and white students, (3) between students of different income levels, and (4) between similar students schooled in different systems or regions.

The report finds that the underutilization of human potential as reflected in the achievement gap is extremely costly. Existing gaps impose the economic equivalent of a permanent national recession—one substantially larger than the deep recession the country is currently experiencing. For individuals, avoidable shortfalls in academic achievement impose heavy and often tragic consequences via lower earnings, poor health, and higher rates of incarceration.

But within the report is small silver lining for Texas:
...differences in public policies, systemwide strategies, school site leadership, teaching practice, and perhaps other systemic investments can fundamentally influence student achievement. California and Texas, for example, are two large states with similar demographics. Yet as shown in Exhibit 7, Texas students are, on average, one to two years of learning ahead of California students of the same age, even though Texas has less income per capita and spends less per pupil than California. (details on p.58/57 chart here)
...the best-performing state for low-income blacks (Texas). (#2 for low-income whites behind MA, based on 4th-grade math)
So much for the argument that more money is the answer to improving public schools.

Some other nuggets from the slide pack of supporting charts:
  • Houston is near the top of metros for math performance of low-income black fourth-graders, and well above the national average (p.57 of pdf, labeled p.56).
  • On the downside, HISD is five points behind the Texas state average (p.65/64).
  • Texas is the #2 state for black graduation rates behind AZ. 68% is still way too low, but it is only 8% behind whites, one of the smallest gaps among states. Surprisingly, some of the largest gaps are found in most progressive/liberal/blue states. (p.66/65)
  • "California has the most students of any state and has a relatively high income level but low achievement level. Texas is the second most populous state with a medium income level and relatively high achievement levels." (p.114/113)
  • Schools and districts have a lot to learn from each other, especially from the best ones: "Across Texas districts, test passing can vary by 25 percentage points. Within Texas districts, school achievement levels can vary by 20-30 percentile." (these are adjusted for demographic differences) (p.55/54)
What might account for Texas' advantages? The report doesn't really say, but we can speculate.
  • Stronger private charter schools providing public school competition? (KIPP, YES)
  • Weaker teachers' unions make it easier to implement reforms and remove bad teachers?
  • Texas culture/work ethic?
  • A weaker welfare/safety net incentivizes student performance and parental support?
  • Being a right-to-work/weak-union state might also incentivize student performance and parental support: education is the path to a better job rather than dropping out and getting a comfortably-paid blue-collar union job. Unskilled labor does not pay well in Texas, and that's a pretty strong incentive to learn skills.
Your own thoughts/reasons are welcome in the comments.

For more on this, and how far Houston and Texas still have to go, I highly recommend checking out and supporting local Houston nonprofit 'Children at Risk'.

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Monday, November 02, 2009

Voting, Houston's greatness, top ranking, and more

Continuing from last week: originally, my plan was to break up the smaller misc items into two posts of five items each, but then three new items came up over the weekend, so you get eight in this one. The first three are the new ones:
  • Wondering who to vote for Tuesday? The Chronicle does a pretty good vetting, and their endorsements are here. Print it and take it with you to the booth.
  • Kevin Kirton, the developer behind the Ashby high-rise, made a good case in Outlook yesterday not only for his development, but also for our (usually) predictable rules of development:

Houston already has a plan for development that works. That plan is to 1) establish a basic set of rules, 2) provide a level playing field, 3) enforce the rules fairly — without regard to political influence, 4) accommodate growth with roadway and utility infrastructure, and then 5) allow the market and consumer demand to determine the best land use.

These simple principles, supported by a fair and mostly uncomplicated set of regulations, have allowed this city to grow at a pace and with a vitality unmatched by any other major city in the nation. For example, our form of planning has given us the largest medical center in the world, as well as Greenway Plaza, a major employment center close to the homes of the people who work there, and the Galleria, one of the most widely imitated retail and commercial districts in the world. Perhaps surprisingly to some, it even gave us Montrose, just named a national Top 10 Neighborhood by the American Planning Association.

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