Wednesday, June 02, 2010

Joel Kotkin in Forbes on Houston as a model city

Joel Kotkin has a great piece in Forbes titled "Houston: Model City" (also reposted on New Geography), holding that our innovation, job growth, and immigration put us ahead of other cities like NYC and Boston.  Originally I wanted to show key excerpts, but I couldn't find anything to cut!  It's that tight (and quite short), making a great point in just about every sentence.  And I know most of you won't go to the link to read it, so..., what the heck, here it is.  Joel and I have worked together, so I think he'll cut me some slack.  You should still follow the links to both Forbes and New Geography to read the many comments, both pro and con (and, you know, check out their ads so everybody gets paid).
Do cities have a future? Pessimists point to industrial-era holdovers like Detroit and Cleveland. Urban boosters point to dense, expensive cities like New York, Boston and San Francisco. Yet if you want to see successful 21st-century urbanism, hop on down to Houston and the Lone Star State.
You won't be alone: Last year Houston added 141,000 residents, more than any region in the U.S. save the city's similarly sprawling rival, Dallas-Fort Worth. Over the past decade Houston's population has grown by 24%--five times the rate of San Francisco, Boston and New York. In that time it has attracted 244,000 new residents from other parts of the U.S., while older cities experienced high rates of out-migration. It is even catching up on foreign immigration, enjoying a rate comparable with New York's and roughly 50% higher than that of Boston or Chicago.
So what does Houston have that these other cities lack? Opportunity. Between 2000 and 2009 Houston's employment grew by 260,000. Greater New York City--with nearly three times the population of Houston--has added only 96,000 jobs. The Chicago area has lost 258,000 jobs, San Francisco 217,000, Los Angeles 168,000 and Boston 100,004.
Politicians in big cities talk about jobs, but by keeping taxes, fees and regulatory barriers high they discourage the creation of jobs, at least in the private sector. A business in San Francisco or Los Angeles never knows what bizarre new cost will be imposed by city hall. In New York or Boston you can thrive as a nonprofit executive, high-end consultant or financier, but if you are the owner of a business that wants to grow you're out of luck.
Houston, however, has kept the cost of government low while investing in ports, airports, roads, transit and schools. A person or business moving there gets an immediate raise through lower taxes and cheaper real estate. Houston just works better at nurturing jobs.
It's not just smug coastal places getting smoked by Texas. Since the collapse of the housing bubble Houston has outperformed Sunbelt counterparts like Phoenix, Las Vegas and Los Angeles. A big factor has been that manufacturing, professional services, international trade and technology industries have been the primary drivers of the city's economic growth--rather than construction and speculation. Ironically, this has increased home values. Since 2007 prices of homes in Houston have ticked slightly higher, while those in Las Vegas, Phoenix, Los Angeles and the Bay Area each are down by more than 35%.
Some traditional urbanists will concede these facts but then try to shift the focus to "qualitative" factors: the best-educated residents, the highest salaries, the most expensive real estate. Although it also attracts a large number of low-skill migrants, Houston has considerably expanded its white-collar workforce. According to the Praxis Strategy Group, Houston's ranks of college-educated residents grew 13% between 2005 and 2008. That's about on par with "creative class" capital Portland, Ore. and well more than twice the rate for New York, San Francisco or Los Angeles.
But Houston's biggest advantage cannot be reduced to numbers. Ultimately it is ambition, not style, that sets Houston apart. Texas urbanites are busy constructing new suburban town centers, reviving inner-city neighborhoods and expanding museums, recreational areas and other amenities. In contrast with recession-battered places like Phoenix, Houston remains remarkably open to migrants from the rest of America and abroad.
Houston, perhaps more than any city in the advanced industrial world, epitomizes the René Descartes ideal--applied to the 17th-century entrepreneurial hotbed of Amsterdam--of a great city offering "an inventory of the possible" to longtime residents and newcomers alike. This, more than anything, promises to give Houstonites the future.

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At 5:24 PM, June 02, 2010, Blogger Alon Levy said...

The article isn't adding any new information. Sorry. It's the same as any Houston Chamber of Commerce press release. (We're growing! And that has nothing to do with our having oil! And New York and Boston suck! Rah rah rah!)

At 7:03 PM, June 02, 2010, Anonymous Anonymous said...

"Although it also attracts a large number of low-skill migrants, Houston has considerably expanded its white-collar workforce."

Isn't a good thing that the unskilled can come/stay here and have a chance of making a living?

At 10:03 PM, June 02, 2010, Blogger Tory Gattis said...

Yes, absolutely. He's just responding to critics that say Houston can't attract educated, skilled, higher-wage white-collar workers.

At 12:21 AM, June 03, 2010, Anonymous Theo said...

No mention here of Houston's relatively liberal land use policies. A flexible framework which encourages a mix of uses, doesn't foster housing shortages and their resultant high prices, and responds to the natural demands of growth is sure to play its own role in making a healthy local economy.

At 7:34 AM, June 03, 2010, Blogger Tory Gattis said...

Total agreement. A definite oversight of a key success factor.

At 7:55 PM, June 03, 2010, Blogger Alon Levy said...

No mention of Houston's ample developable land, either. In New York or Los Angeles, the nearest empty, developable land is tens of miles from the CBD, resulting in travel times well above the maximum most people accept. In Houston, the exurbs are in the next county over. Houston right now is really no different from Los Angeles sixty years ago. Let's see how fast the region keeps growing when Fort Bend County is as full as Orange County.

At 8:57 AM, June 04, 2010, Anonymous kjb434 said...


You forget to mention that looser development controls and regulations in New York and Los Angeles would allow for more residences to be available closer into those CBD's instead of forcing people to move far away. In Houston, living far from work is a choice instead of a requirement.

At 12:30 AM, June 06, 2010, Blogger Alon Levy said...

Los Angeles didn't have those development controls back when it was what Houston is today, and neither did New York.

Living far from the center isn't really a choice in Houston. The city has suburban zoning throughout, only it's not called zoning. In New York, you can build apartment buildings in the inner parts of the city without setbacks and without off-street parking. In Houston, you can't. It makes it prohibitively expensive to build in the inner city.

At 8:00 AM, June 06, 2010, Blogger Tory Gattis said...

Despite the parking and setback expense (and plenty of variances are granted), there seems to plenty of dense development in the inner city (albeit slowed by the recent recession), and there are certainly affordable, dense housing options (i.e. apartments) very close to every major job center in the city. Clearly people are *choosing* not to live in them, probably because they prefer their own larger home with a yard.

At 7:52 PM, June 06, 2010, Blogger Alon Levy said...

The question is quantity. How many units can be provided at affordable cost before you get too far from the job and retail center?

At 9:01 PM, June 06, 2010, Blogger Tory Gattis said...

If the demand is there, the quantity will get built. The first indicator would be very high rents, indicating high demand and limited supply. The market is very efficient at supplying where there is demand. Downtown, there has been modest growing demand over the last decade or two, first leading to the Rice Hotel conversion, then other smaller buildings, and now the new tower at Discovery Green. The Galleria/Uptown area has had much more demand, and the residential towers have been built to meet it. Each new increment of capacity has kept rents from growing too much.

At 11:37 PM, June 06, 2010, Blogger Alon Levy said...

Yes, that's part of it... but another part is that supply can lag demand - hence the rising rents in desirable areas.

But that's not where the Houston requirements for setbacks and parking are relevant. They're relevant in that they make it illegal to build prewar-style urban neighborhoods. It's still legal to build dense residences, but the setbacks make them pedestrian-unfriendly, thus less attractive. What's in vogue right now isn't necessarily density, but a certain neighborhood feel. That's probably why you see conversion of non-residential buildings instead of new buildings.

At 8:16 AM, June 07, 2010, Blogger Tory Gattis said...

I agree with that point, although I've also heard that the city planning commission is very generous with requested variances along those lines, and there is also the new ordinance allowing that type of development near the rail stops. The setback issue is pretty easily resolved, and parking's not much of an issue given that developers know they must offer it anyway in Houston, or they won't have customers.

But, saying Houston is missing some of the urban-style neighborhoods that some people desire is a different point than saying they don't have living options close to work, that those options are unaffordable, or that they're forced to live far from work - none of which seem to be the case in Houston, IMHO.


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