Tuesday, June 29, 2010

Austin vs. #1 Houston, transit, migration, CoL, and more

Some smaller items this week:
The Lone Star Shines  
There are good prospects for ambitious young professionals across the country, but Texas dominates our list, boasting three of the top 10 spots. Because of its business-friendly environment and abundance of oil money, 14 of the country's largest companies (as measured by market capitalization) are based in our No. 1 city, Houston. Only New York, N.Y., which ranks No. 4 on our list, boasts more big employers. Houston also shines thanks to high average incomes and a concentration of grads from elite colleges--and not just from local Rice University, but from across the country.
  • Here's a fun interactive map at Forbes showing domestic migration.  Pick any county and see where people are coming in from (black lines) and going out to (red lines).  Harris County is doing quite well with mostly black lines, although there a few red ones to New Orleans (returning Katrina refugees) as well as a little weather, geography, or tech-driven migration (I assume) to Austin, CO, and WA.  As you might expect, Austin/Travis County looks like a black hole: people come in, but they don't go out.  Check out the exodus from Chicago and Detroit.  Ouch.  Hat tip to David.  Here's some of the debate on why people are moving to Texas, and here are some more of the maps for browsing (hat tip to kjb).
  • A little (dark) humor: a New Yorker on "Reasons I Hate Public Transportation".  NYC is not the transit/transportation paradise it is often made out to be.
  • The power of private commuter transit in NYC: Private Bus Line Seeks to Profit on MTA Cuts - WSJ.com .  This is something I've advocated for a long time.  An excerpt on the cost disparity:
  • "He sees opportunity because he says he isn't burdened with the MTA's expensive union rules, debt payments and legal mandates, such as providing transportation for the disabled. For example, the $5.50 fare for the X90, which Mr. Azumah will keep the same, covered just over one-quarter of the MTA's estimated $19.04 cost per rider on the route."
    Although I doubt Metro has anywhere near the same cost burdens as MTA, could you imagine the huge numbers of new express commuter bus routes that could open up in Houston with that kind of cost savings?
  • Continuing with the NYC theme: New York's envy: What will half a million dollars buy you in Houston? - 2010-Jun-17 - CultureMap Houston.  Hat tip to Hugh.
  • Cost of living excerpt below from the GHP.  Note the benefits of no-zoning on housing and grocery competition, although I'm surprised it didn't help more on misc goods and services.  Also note that our transportation costs are not out of line, despite claims from the anti-sprawl crowd.  I'm actually impressed our utilities are in-line with the national average given the high A/C requirements here in the summer.  Maybe electricity competition is actually working?
Houston Maintains Low Cost of Living — In Q1/10, the cost of living in Houston was 18 percent below the average for 27 metropolitan areas over 2 million population and 9 percent below the average for all 308 reporting places, according to the ACCRA Cost of Living Index. The index, produced by the Council for Community and Economic Research, measures differences in the relative cost of consumer goods and services appropriate for a professional or managerial household.
Bargain housing costs help maintain Houston’s low cost of living. In Q1/10, housing costs in Houston were 39 percent below the major metro average and 22 percent below the average of all 308 reporting places. According to the ACCRAsurvey, the same new house that cost $209,000 in Houston in January cost $348,744 in Miami, $420,600 in Boston and $607,391 in Washington, D.C.
The cost of grocery items in Houston was also the lowest among the major metro areas, 17 percent below the major metro average and 13 percent below the national average. Houston did not differ significantly from the nationwide average on the other components: utilities, transportation, health care, and miscellaneous goods and services.

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Tuesday, June 22, 2010

Astrodome plan questions and a better option

Last week HCSCC released a new master plan for Reliant Park with three options for the Astrodome, including two large, relatively detailed chart documents and a public feedback form.  Summing up the three options in their words:
  1. Reliant Astrodome is demolished and replaced by a green space plaza - $873 million
  2. Reliant Astrodome's outer shell remains, a floor is built at grade level, and the interior is converted into a multi-use venue - $1.1 billion
  3. In addition to the improvements in Option 2, additional enhancements will be made to the building, creating a one of a kind mega venue, incorporating a Science, Technology, Engineering and Mathematics Institute, a planetarium and much more - $1.4 billion
How does demolition cost almost as much as two new Reliant Stadiums, you might ask?  Well, they cleverly included their real wish-list with all 3 options: a new mega-hotel on-site, new arena, additional exhibition space, and a large parking garage.  There's no option to vote against any of that.  It's also a clever way of making the all-out revamp package seem not that much more expensive than demolition.

Swamplot has their own humorous, mocking take on the plan here, especially the amusing sketches with hundreds of people just milling around inside the empty dome.  I was also a fan of the feel-good pictures of kids learning and graduating - who can vote against that?

First, a couple things I like about this plan:
  • With easy light rail access to the med center, the hotel might actually be viable - it could attract customers even without an on-site convention.
  • The festival space concept is pretty cool, with a nice landscaped outdoor area if the weather is nice, but also a great indoor backup option inside the Astrodome if it's not.  I think festivals could have layout plans for either scenario and make the call a day or two in advance depending on the weather forecast.
But the plan also raises a lot of questions:
  • Is there really demand for this much exhibition space, especially when the George R. Brown has already been expanded?
  • If we need a new arena and additional exhibition space, why aren't they being built inside the structure that already exists and most obviously needs viable uses: the Astrodome?  That would also mean much less parking is lost to new development, meaning we probably wouldn't need the expensive parking garage.
  • If part of the goal is the preservation of a historically significant structure, why do plans call for such a radical change of the Astrodome exterior? (which also adds more cost)
  • If a big part of the majesty of the dome is the vast interior space, why are we cutting that in half with a new raised floor at ground level? (which also adds more to the cost and diminishes the historic preservation)
  • So the best plan we can come up with dumps light rail arrivals on the ugly backside of the buildings (where the freight trucks make deliveries) and requires long, circuitous walks around those buildings to get to the Astrodome, Reliant Stadium, or even to the main entrance of the convention center?
  • What are the specifics of the STEM (Science, Tech, Engineering, Math) institute?  I support the goal, but what is it really?  What will it offer that's not better served with programs in existing schools?  Here's the concept I pitched in this blog before, but it had a much smaller and less expensive scope:
"It's also compatible with a concept we've been kicking around at the Education Foundation of Harris County: a large-scale Math and Science Summer Academy for jr.high and high school students. While festivals would use the Dome on weekends, summer weekdays could accommodate thousands of kids spread in small groups throughout the seating tiers doing fun science projects like building robots for competitions, solving Rube Goldberg challenges, understanding the physics of Astroworld rides, and taking light-rail field trips to museums, the zoo, Rice University, the Texas Medical Center, and even Minute Maid baseball games (after learning the physics of baseballs, of course)." 
  • What would this planetarium offer that our existing one at the HMNS doesn't already?  Is the attendance at HMNS's planetarium strong enough to argue for an expensive new one?
  • What is the 'white elephant' risk of these proposed rides and planetarium?  And what's the risk these attractions will drain attendance from and weaken our existing museums?  Examples around the country show that these types of things often do well for a couple of years as all the locals try them out, then attendance drops like a rock (for example, see Seattle's $100m "Experience Music Project still struggling five years later", or The Millennium Dome in London).  Even Space Center Houston has struggled to refresh attractions to keep up attendance.  London's Millennium Dome should serve as a particularly strong cautionary tale: if a much larger number of rides/attractions can't survive in one of the largest, top-ranked world cities on the planet - one that attracts throngs of tourists every year - what chance do a handful of rides/attractions in tourist-starved Houston have?
In the end the study calls for... wait for it... another study.  This one more detailed and, of course, more expensive.  If I had to sum up this one with a car analogy, I'd say it's like taking your used SUV to the car lot and being offered 3 choices: crush it, or replace it with a Rolls Royce or a Ferrari.  Does it seem to anyone else like some more reasonable options are missing?  Harris County Judge Ed Emmett thinks so:
Emmett favors minimal improvements to the Dome that would essentially convert it into an indoor fairgrounds.
"(A) middle option preserves the Dome but doesn't lock us into a major cost item," Emmett said. It buys time, too, for the possibility of a private developer coming along with a proposal to lease the Dome for a grander project.
 (note that I don't think his 'middle option' corresponds to the middle option in the plan, but instead a new 'middle option' between demolition and the expensive plan options)
That's a plan I can get behind.  Let's set aside the gold-plating and use it as-is (well, with minimal upgrades to pass code) as a weekend festival market space on non-Rodeo/non-Texans weekends - especially during our brutal summers.  Even a modestly attractive schedule should be able to bring in enough parking revenue to at least cover upkeep.  Let a non-profit run it and evolve it bottom-up as they try out innovative ideas and raise funding (like they do now at the Zoo).  And maybe one day they'll work out a viable big project, like a massive movie studio or Smithsonian Museum of Energy and Power.  That's the prudent preservation option.

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Tuesday, June 15, 2010

Dropping JV crime, new flights, Metro press, nanomedicine, and more

A few smaller and mid-sized items:
  • A story on the dramatic one-third drop in juvenile crime since 1997.  My theory: the rise and now ubiquity of the internet, cell phones, and video game consoles have got to be a big factor here.  Youth don't get bored and cause mischief as much anymore - there's always something entertaining to do close at hand.  Or with texting, IM and social networking, they're always informed of the latest social events to go join.  While I don't think a continuous stream of novelty/entertainment/socializing is the ideal way to grow up, it's better than some of the darker alternatives like drugs and crime.
  • A YouTube video visualization of planned improvements to the 290-610-10 interchange.  They can't happen soon enough.  Hat tip to Gonzalo.  And here's a video on the plans for BW8 and 290, along with the new Hempstead Tollway.
  • Some of my long-time readers probably know I'm also a bit of an aviation nerd, so I got pretty excited by the Continental announcements of new 787 service from IAH to both New Zealand and Nigeria in the fall of 2011 (once they get the planes).  Nigeria is all about the oil industry, but New Zealand is all about the feed to and from Star Alliance partner hubs at each end: Air New Zealand to points all over NZ and Australia, and Continental to the eastern US, Latin America, and even Europe.  The only other US service to Australia or New Zealand is from California, but Houston can offer a lot more connections than LA or SF can.  I was a little disappointed Continental is not offering thru-service from IAH to Sydney with a stop in Auckland, but evidently it's a crew-rest issue (you'll be able to easily connect on Air New Zealand).  I also understand that the schedules allow them to use just three 787s to provide a circulation of flights covering both destinations (usually it would require four, since each leg is over 12 hours).  Anyway, all in all it's pretty cool and a nice feather-in-the-cap for Houston (take that, DFW!), as is this designation from the press release:
"With the addition of flights to Africa, Houston will become one of just four cities in the world - and the only city in the Western Hemisphere - to have nonstop service to every inhabited continent on the globe."
Well, that's if you assume New Zealand is part of the Australian continent, which is debatable, but I'll buy it.  For the curious, the other three cities with similar service are Doha, Dubai, and Johannesburg.
"I can see in Houston the nanomedicine industry developing like Silicon Valley," said Mauro Ferrari, chairman of the Department of Nanomedicine and Biomedical Engineering at the University of Texas Medical School at Houston. "I think it’s a big opportunity for the city and the state, and it’s developing at a good pace."
In the 3½ years Ferrari has been conducting research in Houston, his lab has brought in close to $70 million in funding.
"By the summer, my department will have brought in over $100 million," he said. "Those are unprecedented numbers. That speaks to the growth of nanomedicine and that Houston has excellence in research in nanomedicine and excellence on the clinical side."
"If you put together the numbers for my department, plus these 170 faculty in the alliance, you have by far the largest collection in the world of nanomedicine expertise, and literally hundreds of millions of dollars in funding coming in," Ferrari said. "Nanomedicine is an area that has an unbelievable economic impact, and to be leaders in this high-growth field has a huge impact on Houston and on Texas."
Houston’s position as a hub for nanomedical research has also spawned a number of startup spinoffs in the private sector, including Leonardo Biosystems, with which Ferrari is affiliated. The company is developing a technique to deliver drugs that would fight refractory breast cancer.
The Texas Medical Center continues to grow and provide great high-tech diversification from energy, space, and the port for the Houston economy.

Finally, I've mentioned before that I also have a companion blog at the Chronicle called Opportunity Urbanist.  Some of you may be interested in a new series I've started running over there on Friday afternoons where I re-post (and occasionally update) highlight posts from the archives at Houston Strategies.  I've started at the beginning in mid-2005, and am moving forward from there.  You'd be amazed how many readers front page placement on Chron.com can bring in...

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Tuesday, June 08, 2010

The pros and cons of Renew Houston

Last week I was briefed on the Renew Houston city charter amendment initiative, which is trying to collect 22,000 signatures this month so it can be on the ballot in November.  The basic argument makes sense: we pay dedicated fees for water and sewer, which keep them maintained properly year after year, but we pay for roads and drainage out of the general fund, which is always being short-changed by the politicians for nearer-term needs, leading to massive underinvestment, flooding, and decay - so let's make roads and drainage work the same way as water and sewer, with a dedicated set of funding sources.  Drainage fees would be roughly proportional to the amount of land you own and how much you've covered it with an impermeable surface - which seems pretty fair to me.

Another benefit is that this initiative seems to shut down selling bonds for roads and drainage.  That may seem like a bad thing, but the problem is that politicians want to have a short term impact, so they sell a big bond issue to build something (and get the credit), and then make future administrations pay for those bonds, including significant amounts of interest.  If we operated instead on a pay-as-you-go basis, we could save all of that money going to interest and put it into actual infrastructure.

But the devil is in the details, and I'm hearing that the details were not vetted with some big players before going to petition.  The biggest issue seems to be the open-ended developer impact fees.  These have been a major problem in other cities.  The argument seems reasonable - "make developers pay their fair share" - but that's not how they really work out in practice.  Politicians find it easy to tax new development because that doesn't upset most voters (some of the anti-growthers even promote it).  By raising the cost of new housing (often by many tens of thousands of dollars), it has an insidious secondary effect of raising the market price of all existing housing.  Existing homeowners/voters love it - of course - but the city becomes less affordable and less competitive over time.  It can also dramatically reduce new construction - costing thousands of skilled and unskilled blue collar construction jobs - as well as increase sprawl and incentivize development to move outside of the city.  Discretionary incomes drop as more goes to housing, which means people spend less on restaurants, arts, sports, entertainment, charity, etc.  All in all, it's a very destructive slippery slope.

The charter mandates a minimum annual budget of $125 million.  I had a major concern that politicians would have too much incentive to make developers pick up as much of that burden as possible to keep the drainage fees lower for most homeowners - but after reviewing the charter language, that doesn't seem to be an issue: it clearly specifies that the $125m must come from drainage fees - all other sources of funding are "gravy", including impact fees.  But that doesn't mean the city council still couldn't set up outrageous developer impact fees - they just can't do it to reduce the drainage fees on land owners.

So my feelings on the initiative are mixed: I agree with the concept, but have serious concerns about the details - especially the open-ended development impact fees.  Unfortunately at this point, the language is set - and I think that language will bring out some tough opponents in the fall.  In addition, this is shaping up as the year of the angry, anti-tax, Tea Party voter, which does not bode well at all for initiatives like this.  DOA?  Maybe.  We'll just have to see how it plays out.

An interesting side note: I've often wondered how much new development outside the city affects runoff into the city.  Steve Costello, a city councilman and engineer, said he felt pretty confident there are adequate regulations in the surrounding counties to make new development runoff-neutral, i.e. they have enough local water detention.  I do hope that's the case.  If you have confirming or conflicting information, I'd appreciate hearing about it in the comments.

If you'd like to read more, the Chronicle, Rick Casey, and lots of other bloggers have written on Renew Houston too: Kuff, Bay Area Houston, and Brains and Eggs (which also has additional links) to name a few.

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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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