Thursday, January 27, 2011

Fri Event: 2010 Report Card of the Houston Region’s Water Quality, Supply and Green Buildings to be Issued by Regional Think Tank at Symposium

The Center for Houston's Future is holding their annual 'Counting on Quality of Place Symposium' this Friday morning (1/28/11) at the GRB. They will release the 2010 regional ‘report card’ on three critical indicators: Water Quality, Water Supply, and Green Buildings.  Both Mayor Parker and Judge Emmett will be there.  Definitely worth checking out if you have the time.

More details and some of their findings here.

Registration here or on-site.


Tuesday, January 25, 2011

City culture vs. innovation, affordability ranking, the 'Houston way' of development, and more

The list of smaller misc items has been building so rapidly the last few weeks I'll need to split them across a couple of posts:
  • The Urbanophile has a very insightful piece titled "Chicago: The Cost of Clout", making the case that "the Chicago way" of clout/patronage inherently limits their potential as an innovation/tech hub.  I don't think Houston has this problem, although we might be at risk of developing it.  I'd be interested in your thoughts in the comments.  Some excerpts:
Here, merit counts for next to nothing…In New York, everyone wants to know: “What do you do?” In Chicago, everyone wants to know: “Who do you know?” ...
This is what clout in Chicago hath wrought. The culture of the establishment Chicago is simply incompatible with an innovation economy. It’s not just about money or resources. It’s about respect. It’s about what this town respects, and more importantly what it doesn’t. It’s about what Chicago whispers to you about what you should aspire to achieve, what success means in this city, and the subtle – and not so subtle – messages about how you get ahead here.
Until you’ve already made your millions or somehow wormed your way into connections or up through the hierarchy, establishment Chicago has no use for you in its economic plans, no matter what talent, ideas, or ambitions you might harbor.
  • Another interesting post by the Urbanophile has a graph showing Houston ranking highly in terms of freeway lane miles per capita.  Of course, at this point I fear our population growth is definitely outstripping our addition of new freeway lane miles.  It's been a critical key to our successful growth over the decades, and one we really will have to find creative ways to keep up (like more toll roads).
  • An Australian "unconventional economist" says "Why not copy Houston?" (and follow-up), specifically our approach to land use and development, vs. the tight restrictions and very high costs in Australia.  The comments are interesting too, and they clearly need more Houstonians to chime in with local knowledge if you're so inclined.  Hat tip to Hugh.
  • Demographia has just released their 7th Annual International Housing Affordability Survey, with an introduction by Joel Kotkin - and, as usual, Houston is held up in very high regard as one of the most affordable markets, with median home values only 2.9 times median incomes ($160k vs. $54.5k) due to our light touch when it comes to land use and development regulations.  Again, hat tip to Hugh.
  • Alan has shared a neat Google Map he created with me illustrating how difficult cross-downtown traffic will be with all of the new street-blocking developments on the east side.  Unfortunately they just haven't been well thought-out, and I think the blockages will probably keep the near east-side (over 59) from developing as well as it might have with better connectivity.
That's enough for this week.  Stay tuned for more.

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Tuesday, January 18, 2011

Fast metro growth predicts lower incomes, and why that's a good thing

Houston Tomorrow recently featured a story about a study claiming that faster urban growth leads to lower incomes and higher poverty and unemployment.  I find the whole assertion deeply flawed, as does UH professor Peter Bishop in his comment.

Here's what's happening:
  • A city gets to the point it's difficult to add new housing to meet demand.  It might be because of regulations, geography, or transportation limitations (or probably all three), but regardless, the effect is the same.  In the U.S., this is the case in cities like NYC, LA, SF, Boston, and others.
  • Of course, if new housing is hard to add, then growth must slow.
  • Since housing supply is now constrained, prices go up, sometimes way, way up.
  • Poorer people can no longer afford to live in the city.  Lower incomes move out (or are generally displaced as their neighborhoods gentrify).  Unemployed move out (or just don't come in in the first place looking for new work).  
  • Voila, the average income in the city increases as the poor and unemployed move out.  Note that their situation didn't get any better (in fact, it probably got worse), but they're just no longer counted in that city's statistics.
Now, I think most people would agree this is not a very healthy scenario or a model for cities across the country (if every city did it, where exactly would we move all the poor people?).  But now an academic comes along and finds a simple correlation between slow growth and high incomes, so slow growth must be the prescription for a better city, right?  Quick, let's pass some laws banning employers from adding any new jobs.  I'm sure our incomes will start taking off in no time.  See the absurdity?

The reality is that high growth cities are opportunity cities, and people move there (inc. poor and unemployed people) to take advantage of those opportunities (inc. affordable housing) so they can improve their and their family's lot in life.  Doesn't that seem like a better model?  In fact, in this economy, wouldn't you think that should be the model for all our cities?

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Tuesday, January 11, 2011

Krugman's muddled argument against Texas

Last week NYT columnist and economist Paul Krugman wrote a very popular column pointing to Texas' revenue shortfall and declaring it an example of the failure of conservative government.  I found the whole piece a muddled mess and dismissed it, but you can't believe the notes I've gotten from people requesting a response.

The thing is, I don't really get his point. The bad national economy was going to cut state revenues no matter what. Is he saying we'd be better off if we had a fat government with easy cuts, instead of a lean government with tough cuts?  How much sense does that make?

The nice thing about delaying my response is that others have already made great cases against the column (saving me the work).  Kevin Williams at the National Review is a bit sarcastic for my tastes, but makes several great points - the main ones being:
  • there's no such thing as a shortfall in Texas, since we use zero-based budgeting (i.e. we start from nothing building every budget with no assumptions from prior years), and
  • our unemployment rate, which is better than the national average, is even more impressive when you consider our huge population gains and the jobs we've had to provide just to keep up with it.
Bill Watkins at New Geography also lays into Krugman's fuzzy thinking:
"People are not as stupid as many Nobel Prize winners might think; they move for opportunity, not just for cheap houses or low-paid work."
Then he comes up with a great new acronym:
"A business moves to or expands in a region based on a whole host of reasons. These include available infrastructure, resource availability, market size and location, labor supply and costs, worker productivity, facilities costs, transportation costs, and other costs. Those other costs include what I call DURT (Delay, Uncertainty, Regulation, and Taxes)."
Conveniently, the Wall Street Journal made the case for Texas' growth and opportunity the next day: - Opinion: The Great Lone Star Migration
Today one out of 12 Americans lives in Texas—the same proportion that lived in New York City in 1930.
...Finally there is Texas. In 1930 there were (rounded off) six million people in the Lone Star State versus 13 million in New York. In 1970 there were 11 million in Texas and 18 million in New York: Each had grown by about five million. But in 2010 there were 25 million in Texas and 19 million in New York.
Back in the 1930-70 period, liberal political scientists hoped and expected that America would become less like Texas and more like New York, with bigger government, higher taxes and more unions. In one important respect—the abolition of legally enforced racial segregation—that has happened. But otherwise Americans have been voting with their feet for the Texas model, with its low tax rates, light regulation and openness to new businesses and enterprises.
Today one out of 12 Americans lives in Texas—the same proportion that lived in New York City in 1930. Metropolitan Dallas and metropolitan Houston, with about six million people each, threaten to overtake our fourth largest metro area, San Francisco Bay (population about seven million), in the next decade.
That doesn't seem to be much of an indictment of Texas' approach to governance...

That's not to say the next budget is going to be easy.  A lot of hard tradeoffs will have to be made.  But it's pretty clear Texas is a very far cry from being a failed state.

Update: another rebuttal against Krugman from a UH professor.  Hat tip to Big T.
Update 2: Richard Florida and Derek Thompson responses supporting Texas.

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Friday, January 07, 2011

2010 Highlights

It's time for the Fall 4Q10 quarterly highlights post, which also sums up all of 2010. 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 once/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 may you have a wonderful 2011.

    Summer 3Q10

    Spring 2Q10

    Winter 1Q10:

    And don't forget the highlights from the first few 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). 


    Tuesday, January 04, 2011

    A Physicist Solves the City (and implications for density vs mobility)

    There's been a buzz lately about this NYT piece on Geoffrey West (not all of it good - scroll down to the second section).  He applies some complexity principles to cities, which yields some interesting insights, albeit ones we kinda already knew.

    I highly recommend reading the whole thing, but here are some excerpts that jumped out at me:
    He didn’t want to be constrained by the old methods of social science, and he had little patience for the unconstrained speculations of architects. (West considers urban theory to be a field without principles, comparing it to physics before Kepler pioneered the laws of planetary motion in the 17th century.)
    ...all of these urban variables could be described by a few exquisitely simple equations. For example, if they know the population of a metropolitan area in a given country, they can estimate, with approximately 85 percent accuracy, its average income and the dimensions of its sewer system. These are the laws, they say, that automatically emerge whenever people “agglomerate,” cramming themselves into apartment buildings and subway cars. It doesn’t matter if the place is Manhattan or Manhattan, Kan.: the urban patterns remain the same. West isn’t shy about describing the magnitude of this accomplishment. “What we found are the constants that describe every city,” he says. “I can take these laws and make precise predictions about the number of violent crimes and the surface area of roads in a city in Japan with 200,000 people. I don’t know anything about this city or even where it is or its history, but I can tell you all about it. And the reason I can do that is because every city is really the same.”
    In city after city, the indicators of urban “metabolism,” like the number of gas stations or the total surface area of roads, showed that when a city doubles in size, it requires an increase in resources of only 85 percent. (which is part of why growth is good)
    ...modern cities are the real centers of sustainability... Small communities might look green, but they consume a disproportionate amount of everything.
    In essence, they arrive at the sensible conclusion that cities are valuable because they facilitate human interactions, as people crammed into a few square miles exchange ideas and start collaborations.
    According to the data, whenever a city doubles in size, every measure of economic activity, from construction spending to the amount of bank deposits, increases by approximately 15 percent per capita. It doesn’t matter how big the city is; the law remains the same. “This remarkable equation is why people move to the big city,” West says. “Because you can take the same person, and if you just move them to a city that’s twice as big, then all of a sudden they’ll do 15 percent more of everything that we can measure. ...when people come together, they become much more productive.”
    Consider the data: When Bettencourt and West analyzed the negative variables of urban life, like crime and disease, they discovered that the exact same mathematical equation applied. After a city doubles in size, it also experiences a 15 percent per capita increase in violent crimes, traffic and AIDS cases. (Of course, these trends are only true in general. Some cities can bend the equations with additional cops or strict pollution regulations.) “What this tells you is that you can’t get the economic growth without a parallel growth in the spread of things we don’t want,” Bettencourt says. “When you double the population, everything that’s related to the social network goes up by the same percentage.”
    ...the positive feedback loop of urban life — a growing city makes everyone in that city more productive, which encourages more people to move to the city, and so on. According to West, these superlinear patterns demonstrate why cities are one of the single most important inventions in human history. They are the idea, he says, that enabled our economic potential and unleashed our ingenuity. ...As cities get bigger, everything starts accelerating.
    The only real criticism I have is the leap from "interactions are good" to Jane Jacobs' "we need density so we can run into each other on the sidewalk."  Yes, all through history up until about 50 years ago, density was the best way to increase interactions.  But now we have a wealthy society where just about everybody owns a car.  It's no longer about unplanned interactions on the street or planned interactions we walk to, but planned interactions that we drive to.  That shifts the focus from density to mobility: what parts of town can I reach in a reasonable time?  That will dictate what events/interactions I attend vs. don't because it takes too long to get to them.  That means business meetings, restaurant meals, and social, entertainment, and networking events of all types - if they're too much of a hassle (i.e. time, distance, traffic, parking), I'm probably not going to do them.

    To repeat what I've said before on this blog: in Jane Jacobs' old world, mobility was fixed (i.e. walking speed) and density was variable, so maximize density - vs. today's world where density is constrained to a relatively modest range (to accommodate cars and a more affluent peoples' desire for more private space (historical norms of large families in small apartments vs. today with singles and couples in large apartments and small families in large houses)) but mobility is variable depending on freeway and arterial networks vs. traffic congestion.  Developing a few dense neighborhoods to meet demand is fine, but the real bang for Houston's buck is improving mobility - and therefore interactions - for all.

    (Hat tip to Howard for the heads up on the article)

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