Tuesday, October 25, 2011

Houston vs. Detroit government philosophies

The National Review recently published a great essay on the Detroit vs. Houston development models since WW2 titled "Houston, We Have a Solution" (big hat tip to Brian).  Detroit was so far ahead of us - how did things switch so powerfully over the last few decades?  The whole article is definitely worth reading, but let's dive into the key excerpts: (highlights mine)

Houston had suffered race riots, too, during World War I, but fortune would smile on it for most of the 20th century. And when oil prices collapsed in the mid-1980s, sending the city into a depression, it bounced back as if suspended from a bungee cord — even though the oil bust lasted nearly two decades. What Houston did for itself is not merely a model for any city facing the danger of sudden economic decline: The policies that Houston and Texas have followed are proof of concept for the conservative vision of government, which is, essentially, to keep the government off the people’s backs and let a free society find its own way to prosperity.

Detroit, conversely, is proof of concept for the liberal vision of government, which seeks to solve every problem through government, to shape economic development through government, to redress grievances through government, to attain social justice through government, and, finally, to insinuate government into every aspect of our lives. The problems Detroit faced in the latter half of the 20th century would have been enormously challenging no matter what policies it embraced. But it embraced the worst ones and so plunged recklessly down the slope of decline.

Each city has offered a nearly pure exposition of a particular philosophy of government and a vivid demonstration of the results. In the degree of collusion between business and government, in the power of labor unions, in the method of economic development, in the burden of taxation and regulation, in the tolerance for diversity — in all these ways and more, the two cities stand as diametric opposites in the choices a society can make.
Between 1900 and 1930, Detroit was the fastest-growing city in the world.
Texas likes to brag that it is “business friendly,” but it would be more accurate to say that it is, by both philosophy and force of circumstances, “competition friendly.”
Texas has prospered from the fact that it is a right-to-work state.
The Texas Medical Center in Houston is the world’s largest, employing nearly 100,000 people and receiving nearly 6 million patients per year.
Tolerance of cultural diversity has become a hallmark of Houston’s ascent, despite the state’s checkered history of race relations. Texans take individual freedom and individual responsibility very seriously, so meritocracy comes naturally to them. In the words of George Strake, one of Houston’s most venerated oilmen, “Everyone’s welcome here, so long as you’re willing to pull the wagon and not just sit in it.” That is perhaps why anti-immigrant feeling is not nearly as pronounced in Texas as it is in other parts of the Southwest. Like Detroit, Houston is minority white, but more diverse: Blacks make up 25 percent of the population, Hispanics 37 percent, and Asians (chiefly Vietnamese and Chinese) more than 5 percent.

Texas has managed to preserve something very essential about America, namely the frontier mentality, what the great Texas historian T. R. Fehrenbach described as the “cult of courage.” Or, in the words of Mr. Strake, “Give me wide open spaces. Let me enjoy the good times, and don’t feel sorry for me in bad times.” Naturally, this leads to a certain vision of government: Defend our shores, deliver the mail, and get the hell out of the way.
...keeping government off people’s backs and letting the free market innovate its way out of recession. The Lone Star State is now the industrial engine of the American economy, singlehandedly responsible for half of the country’s job growth in recent years.

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Tuesday, October 18, 2011

A remedial lesson in urban form and economics (part 2)

Continuing from last week with excerpts from Phil Hayward's amazingly insightful paper on urban form and economics. (again the bold highlighting is mine)
Platitudes like “we must locate people close to where they work”, or “we must locate jobs close to where people live”, have little basis in reality.
Ultimately, green planning will phase out cheap urban land, undermining this sector and destroying jobs in the process.
The Los Angeles urbanized area (the census bureau’s functional definition of “urban” that includes a central city and all of the surrounding land above 1,000 people per square mile) has increased in density from barely over 4,000 people per mile to over 7,000 people per square mile, making it the densest urban area in the United States. It is this increasing density, not sprawl, together with the fact that Los Angeles has one of the lowest provisions of freeway miles per capita in the nation, that has led to increasing traffic congestion in Los Angeles. This has happened despite the fact that Los Angeles has one of the most extensive transit systems and lowest car ownership rates in the country today. One of the things that all of these erroneous preconceptions about sprawl demonstrate is the complexity of urban systems and the way that in these complex systems almost every cause is also an effect and vice versa. Thus, rather than say, as many people do, that the automobile was a principal cause of sprawl in the twentieth century, it would probably be at least as accurate to say that a desire for lower density living was the reason automobile makers were able to transform themselves from a small industry turning out luxury products to an enormous industry making a product that has become a standard fixture in affluent households worldwide.
Eric A. Morris says, in “Los Angeles Transportation Facts and Fiction”:
“.......by the standards of U.S. cities, Los Angeles is not sprawling, has a fairly extensive transit system, and is decidedly light on freeways. The smog situation has vastly improved.....“........Los Angeles’s traffic woes stem from the fact that it doesn’t sprawl enough and has overinvested in costly rail transit at the expense of developing its undersized freeway network.....”
Although many people like to observe that Europeans still drive less than Americans, in fact the upward trajectory of automobile ownership and automobile use have increased in Europe in almost exactly the same way as in the United States, simply with a time lag due to a lag in affluence.
The term “dense sprawl” has recently been coined to describe LA. This also describes the cities of Australia and NZ. With all the successful infill development that has taken place, we have ended up with much higher traffic congestion, because our provision of road space has not kept up with the population increase.
Planners might have hoped that mode shift to public transport would negate the effect of higher density on road congestion, but this has never happened anywhere in the world, to sufficient extent to actually negate the congestion negative externalities. The very wrong assumption underlying our modern planning fashions is that increases in density might lead to direct reductions in car use. In fact, it perfectly logically leads to increases in car use per square mile/ square kilometer of the urban area, and increased congestion.

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Wednesday, October 12, 2011

A remedial lesson in urban form and economics (part 1)

Phil Hayward of New Zealand sent me an early draft of an amazingly insightful paper on urban form and economics.  Unfortunately it's not currently on the Internet, so I can't link to it, but I can share my favorite excerpts (italics and bold highlighting mine).  In fact, there are so many, I'm splitting them over two posts this week and next.  Long-time readers will recognize themes similar to my older posts.

In Melbourne, the CBD accounts for 10 percent of the employment and approximately 62 percent of its workers use mass transit. Outside the CBD, the share of workers using mass transit is about nine percent. Why the big difference? It is simply because mass transit uses a hub and spoke design system that provides direct service without transfers, to downtown areas. It is not financially feasible to provide hub and spoke access to other employment centers and it is thus impossible for mass transit to be automobile competitive.

(and yet we continue to hear calls for commuter rail in Houston, despite our large number of different employment centers and less than 7% of jobs downtown. Here's a better answer.)
The New York urban area has the longest work trip travel times of any major urban area in the USA, at approximately 35 minutes. This is simply because so many people use mass transit, which takes on average 75 percent more time than commuting by car. The average commute time in Los Angeles is approximately 27 minutes.
For a city to have a CBD as dense as Manhattan in the modern age, several historic preconditions are necessary. Firstly, that CBD has to have achieved that density in an era predating the ubiquitous use of the automobile. No CBD in the world has achieved “high” density, after its populace could afford and were allowed to use, automobiles.
Low land costs and non-obstructive permission processes also increase productivity. This is a major factor in the USA’s world-leading economic productivity levels, which are now some 40% ahead of strictly-planned, inflated land-cost Britain.
Housing has always remained affordable in cities where fringe land has been freely available to the urban economy with a minimum of "planning gain" accompanying development processes. In contrast, urban growth restrictions cause property price volatility and bubbles, as we should have well and truly learned by now. There are also numerous negative economic and socio-economic effects to inflated urban land prices, such as reduced productivity, reduced discretionary income, and reduced social mobility.
"Manhattan-isation" cannot be achieved with property rights and market freedoms intact.
Even the oft-heard argument that "peak oil' and rising fuel prices will cause changes in our location and density preferences, do not affect the foregoing reality. Rising costs of travel capitalise into property prices at "efficient" locations anyway. The current “cost of automobility” actually includes a very high discretionary component. The rising efficiency of automobiles has resulted in people buying larger, more comfortable, higher-performance automobiles. The potential low end cost of “automobility” in real terms, has in fact steadily dropped, even as oil prices have risen. There has probably never been as low cost automobility as a few-years-old, already-depreciated, yet still reliable 1300cc Japanese hatchback. (Depreciation is one of the main costs). We have plenty of room to maneuver yet, to retain the benefits of automobility in the face of rising fuel costs, by sacrificing size, weight, and performance as well as enjoying further technological advances. Mass transit is actually not a “solution” at all, as it causes major losses of productivity, and the cost of imposing the “urban form” that would grant it some competitiveness with “automobility”, is economically prohibitive.

To be continued next week...

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Tuesday, October 04, 2011

Summer 3Q11 Highlights

It's time for the Summer 3Q11 quarterly highlights post (and let's all take a moment of thanks that the hottest Houston summer on record is over!). 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; and, last but not least, they've also been invaluable for me to track down some of my best thinking for meetings or when requested by others (as is the ever-helpful Google search).  They're not quite as useful as they were when I was still doing multiple posts each week, but still have some value (at least for me).

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 is also available in the right sidebar. As always, thanks for your readership.

And from Spring 2Q11:

And from Winter 1Q11:




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) and most definitely in the 5th birthday retrospective.