Sunday, June 28, 2015

Jurrassic Park Houston, defending Texas exceptionalism, passing Chicago, Market Urbanism, and more

Before getting too a few smaller items this week, I need to debunk this absurd post attempting to debunk Texas growth exceptionalism.  It claims we're not growing because of our policies, but because we simply have the space with greenfield growth opportunities as opposed to the northern cities.  But there are plenty of greenfields around the northern cities once you get outside their cores.  There's not much growth happening in them for a reason: people and businesses are choosing Texas over those places.  It's as simple as that, and that is, quite clearly, Texas exceptionalism.

Moving on to this week's items:
  • National NPR Here and Now story on Houston's lack of zoning.
  • Cool column about how Miami has staved off gentrification in certain neighborhoods by allowing unlimited building heights in the popular areas, so the wealthy aren't displaced into adjacent neighborhoods.  Not quite Houston's no-zoning, but a similar benefit.
  • If you're curious when Houston will pass Chicago as the country's third largest city, Kinder has done the analysis: ~2030, assuming current growth trends continue.  And we should pass their metro population too soon after that, although I don't see us catching up to DFW, so we'll be fourth in the metro rankings, not third.  Chronicle story.
  • An amazing list of rankings for Houston. Well worth a skim. Very impressive - will make you proud to be a Houstonian.
  • Scott Beyer introduces his Market Urbanism concept in Forbes with a book coming down the road.  The concept has many similarities to Opportunity Urbanism: cities needing to let land-use markets work instead of regulatorily distorting them with serious negative consequences.  I'm looking forward to sharing more of Scott's posts over time like the Miami one above.
Finally, to end on a little tongue-in-cheek humor, The Atlantic CityLab asks "Where Should We Build Jurassic Park?" And the winner is... Houston!
The single best place to build Jurassic Park: Houston 
Houston is the nation’s most demographically diverse metropolitan area. Its broad base of religious communities and ethnic enclaves, plus its sizable LGBT population, would help to host the millions of visitors who would make the prehistoric pilgrimage every year. 
Houston is characterized by its low density—a negative in many respects, but an undeniable plus when it comes to containing the tragic-yet-frequent dinosaur outbreaks. The city’s growth and urban sprawl only indicates the sore need for the kinds of transit and infrastructure upgrades that such a major development could help to facilitate. 
The city enjoys a progressive economy that is weathering the downturn in oil prices reasonably well. (Best not to mention oil around the dinosaurs.) According to Area Development, a trade publication that covers, well, area development, Houston ranks second among U.S. metro statistical areas in terms of economic diversity, workforce skills, and other business factors. 
Plus, no zoning in Houston means no exclusionary mammal zoning
Houston is already home to NASA; if past is prologue, then the city’s successes as the host of the nation’s explorations into the final frontier (space) will serve it well when we conquer the next one (time). Put a Jurassic Park next to the Johnson Space Center and call the campus the Space-Time Continuum! 
Finally, putting a dinosaur theme park in Houston solves two problems in one. The Astrodome—whose fate is still uncertain—is just begging to be rehabbed as a T-Rex paddock.
Lol.  I also love the digs against NIMBYs at the beginning of the article... ;-D

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Monday, June 22, 2015

The Economist tallies the cost of excessive land-use regulation

A couple of months ago, The Economist magazine had a cover story on "Space and the City: Poor land use in the world’s greatest cities carries a huge cost," and I'm finally getting around to writing a complete post about this excellent piece (rather than including it in my usual lists of smaller items).  It included both an opening editorial leader and an in-depth briefing article, and reiterates several of the long-term themes of both this blog and The Center for Opportunity Urbanism around the high cost of excessive land-use regulation.  Since most of you may not have the time or the subscriber access to read the whole thing, here are what I think are the most key excerpts below.  I realize this it is a bit long, but it just goes to show how many good points there are here:
" regulations in the West End of London inflate the price of office space by about 800%; in Milan and Paris the rules push up prices by around 300%. Most of the enormous value captured by landowners exists because it is well-nigh impossible to build new offices to compete those profits away. 
The costs of this misfiring property market are huge, mainly because of their effects on individuals. High housing prices force workers towards cheaper but less productive places. According to one study, employment in the Bay Area around San Francisco would be about five times larger than it is but for tight limits on construction. Tot up these costs in lost earnings and unrealised human potential, and the figures become dizzying. Lifting all the barriers to urban growth in America could raise the country’s GDP by between 6.5% and 13.5%, or by about $1 trillion-2 trillion. It is difficult to think of many other policies that would yield anything like that.
San Francisco could squeeze in twice as many and remain half as dense as Manhattan.
Zoning codes were conceived as a way to balance the social good of a growing, productive city and the private costs that growth sometimes imposes. But land-use rules have evolved into something more pernicious: a mechanism through which landowners are handed both unwarranted windfalls and the means to prevent others from exercising control over their property. Even small steps to restore a healthier balance between private and public good would yield handsome returns.
One estimate suggests that since the 1960s such distortions have reduced America’s GDP by more than 13%.
... America land accounts for a third of total housing costs, and close to half in some metropolitan areas. A high share of land in housing costs results in the creation of large rents for landowners. 
If regulatory limits on building heights and density were relaxed, fewer plots of land would be needed to satisfy a given level of demand. That would reduce the rents collected by landowners, since any uptick in demand could quickly be met by new development. Just as soaring agricultural productivity led to a decline in the relative economic power of rural landowners in the 19th and 20th centuries, the relaxation of strict limits on development would lead to a decline in property wealth relative to the economy as a whole. More of the gains of economic activity would flow to workers and investors
Instead building regulations keep urban-land productivity low, and the costs are staggering. A 2005 study by Mr Glaeser and Raven Saks, of America’s Federal Reserve, and Joseph Gyourko, of the University of Pennsylvania, attempted to derive the share of property costs attributable to regulatory limits on supply. In 1998 this “shadow tax”, as they call it, was about 20% in Washington, DC, and Boston and about 50% in San Francisco and Manhattan. Matters have almost certainly got worse since then.
Similar work by Paul Cheshire and Christian Hilber, of the London School of Economics, estimated that in the early 2000s this regulatory shadow tax was roughly 300% in Milan and Paris, 450% in the City of London, and 800% in its West End. The lion’s share of the value of commercial real estate in Europe’s most economically important cities is thus attributable to rules that make building difficult. 
One may find it hard to sympathise with Mayfair hedge funds facing high rents. But the net effect of these costs is felt more by the poor than by the rich. Take American homeowners. The fact that 60% of households own property might seem to suggest that rising house prices and inflated land values were good for a large swathe of the middle class. Yet Edward Wolff of New York University notes that the middle class enjoyed much less of a boost to wealth because of an accompanying rise in mortgage debt (see chart 3). Meanwhile poorer Americans, who rent their homes, experienced soaring housing prices as a large and sustained increase in their cost of living. 
Housing wealth has played a critical role in rising inequality, to which Thomas Piketty, an economist at the Paris School of Economics, drew attention in his bestselling book “Capital in the Twenty-First Century”. In a recent paper Matthew Rognlie, a doctoral student at MIT, noted that the rising share of national income flowing to owners of capital, rather than workers, is largely attributable to increased payments to owners of housing. Capital income from housing accounted for just 3% of the total in 1950 but is responsible for about 10% today.
Growth in the rents available to property owners fuels corruption and wastes resources. Landowners work to strengthen development restrictions while politicians cash in on their ability, through selective development approval, to grant fortunate supplicants a windfall. In economies where political corruption is already a problem the renaissance of land may be especially corrosive. In October 2014 the Times of India reported that the bribes required to clear the various stages of the planning-permission process in central Mumbai could add up to as much as half of basic building costs.
...American GDP in 2009 was as much as 13.5% lower than it otherwise could have been. At current levels of output that is a cost of more than $2 trillion a year, or nearly $10,000 per person
The good news is that the world’s urban-land scarcity is largely an artificial problem.
Those already blessed with property may also object to the other obvious approach to the problem: faster and higher-capacity transport links allowing the benefits to be spread farther afield."
To paraphrase Goode Co., you may want to to thank your lucky stars you live in unzoned, relatively free market Houston, Texas...

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Sunday, June 14, 2015

Houston demonstrates social mobility, attracts millenials, ranks #1 for charity, beats Dallas; fixing transit to Galveston, and more

Lots of items this week:
"Notably, cities where incomes grew at the top overlapped very little with those where incomes grew at the bottom. Of the 11 cities where 20th-percentile incomes increased by a statistically significant margin from 2012 to 2013, just two (Jacksonville and Houston) also posted gains at the 95th percentile."
Finally, a Chronicle piece on how difficult it is to use transit to get from Houston to Galveston, which reminded me of my old proposal to move the Clear Lake Park-and-Ride to Space Center Houston to improve tourist access.  It would be pretty awesome if both Metro and Island Transit cut a deal with Space Center Houston to use their underutilized-on-weekdays parking lot for Park-and-Ride service, enabling tourists both from Houston and Galveston (like cruise-shippers) to visit NASA (Houston’s #1 tourist attraction) while also creating a natural Houston-Galveston connection…

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Tuesday, June 09, 2015

Speaking at HPRA lunch event on Friday

Just passing this along if any of you would like to attend.  Would love to see you there...

Houston as an Urban model for America

 The HPRA speaker this Friday noon will be Tory Gattis – Senior Founding Fellow with the new Houston-based think tank Center for Opportunity Urbanism.

Tory co-authored the original Opportunity Urbanism study with noted urbanist and Center Director Joel Kotkin, creating a city philosophy around upward social mobility for all citizens as an alternative to the trendy concepts of “smart growth” and "new urbanism", and the less famous creative class movements, with Houston as its exemplar city. 

Houston Property Rights Association

PUBLIC INVITED: $11.49 plus 10% gratuity - buffet self-serve - all you can eat.
Coffee and tea are extra.

The Lam Bo Restaurant (Chinese and American food), is at
6159 Westheimer Road, about a mile west of Chimney Rock on the south side.
 (look for us in the back room)

Friday, June 12, 2015
  Buffet lunch - 12:00 to 2:00 - Program starts at 12:30

Please tell your friends and neighbors about our meetings.


Sunday, June 07, 2015

Why expand freeways when they just refill? plus local think tanks, we're #1 in N.America trade, and more

Before getting into this week's smaller items, I have to call BS on this disparaging of the Katy freeway expansion because congestion and trip times are back up.  It completely ignores both the fact that the new I10 has the two-way HOT lanes option for all drivers and transit riders, as well as the fact the new 23-lane freeway is moving far, far more people than the old 7 lane freeway - and isn't that what transportation infrastructure investments are supposed to do?  How is "we shouldn't build this - too many people will use it" a legitimate argument?  It's absurd on the face of it.  Have you ever heard someone say "We really shouldn't build or expand that airport - too many people will want to fly"? Sure, economic growth causes freeways to grow congested over time (as can trains, btw - see Tokyo and NYC), but using that as an argument against expansions is a slippery slope that if you ran it backwards through history would lead to Houston having few or no freeways - and how many people think we'd be the economic powerhouse we are today without our robust, multi-lane/multi-loop freeway network we've expanded over the decades?

Moving on to the smaller items this week:
Finally, last week I mentioned this great fact sheet infographic on Houston from Patrick over at the GHP, but I forgot to mention that my favorites are the fact that we're up to 190 nonstop destinations from our airports (seriously impressive - the airports have been on a tear lately adding new service) and that we have more jobs in the metro area than 36 states!

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Monday, June 01, 2015

Best Cities for Minorities, Global Houston, good moves by METRO, and more

Sorry for not posting last week - I was visiting family in California and missing the flooding drama here (same way I missed Allison - you guys should be fearful when I leave town ;-).  Speaking of California, we found your lost rain here in Texas - feel free to come and pick it up anytime.

Some big news this week: our Center for Opportunity Urbanism has released its first major report, The Best Cities for Minorities: Gauging the Economics of Opportunity.  No surprise - Houston does pretty well. You can read Joel Kotkin's summary of it at RealClearPolitics here.  Key excerpts:
"We found, for all three major minority groups, that the best places were neither the most liberal in their attitudes nor had the most generous welfare programs. Instead they were located primarily in regions that have experienced broad-based economic growth, have low housing costs, and limited regulation.
There are other policy implications. Blue state progressives are often the most vocal about expanding opportunities for minority homeownership but generally support land use and regulatory policies, notably in California, that tend to raise prices far above the ability of newcomers -- immigrants, minorities, young people -- to pay. Similarly blue state support for such things as strict climate change regulation tends to discourage the growth of industries such as manufacturing, logistics and home construction that have long been gateways for minority success. 
Given the persistence of racial tensions, this data begins to give us a clearer understanding of what actually works for America’s emerging non-white majority. Denunciations of racism, police brutality and xenophobia may be all well and good for one’s sense of justice. But  if you want actually to improve the lives of minorities, we might consider focusing instead on policies that promote economic opportunity, keep living costs down, and allow for all Americans to enjoy fully the bounty of this country."
UPDATE: WSJ column discusses the report in the context of Baltimore.

Moving on to this week's smaller items:

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