Monday, August 22, 2016

Zoning shrinks the economy, TX cities as people, Astrodome, appreciating townhomes, helping homeless, and more

Lots of smaller items this week:
  • A cool video proposal for what to do with the Astrodome. The proposal is to strip it to its frame as a park for events. Great visuals. An Eiffel Tower for Houston. That is somewhat appealing, but I hate to give up the potential enclosed, air-conditioned, climate-protected space, especially given Houston's harsh weather.  Couldn't it be a park and events space while staying enclosed?  And I think that's the county's current concept/plan.  Then there'd be a place we could hold events and festivals in the summer and winter, instead of just the spring and fall.

"Bryan Mistele, the CEO of traffic tracker Inrix, argues in the Seattle Times that proposed new light-rail lines will be “obsolete before they are built.” Specifically, he says, automated, connected, electric, and shared vehicles–which he abbreviates as ACES–are already changing how people travel, and those changes are accelerating. 
Sound Transit, Seattle’s regional rail transit agency, wants voters to approve a $54 billion ballot measure this November for more light rail. This, Mistele points out, is more than twice the cost of the Panama Canal expansion, yet isn’t likely to produce any significant benefits.
$54 *billion* (!!).  Wow - that's a lot of money for what will soon be a very large white elephant. Thank goodness Houston METRO isn't trying to jump off a similar cliff...
"Cashman’s argument is that self-driving cars won’t be “affordable,” while public transit is. Excuse me? In 2014, American transit agencies spent $59 billion to move people 57 billion passenger miles (see page 106). That’s more than a dollar per passenger mile. 
All spending on cars and driving, meanwhile, amounted to $1.1 billion (add lines 54, 57, and 116 of table 2.5.5). Highway subsidies in 2014 were about $45 billion (subtract gas tax diversions to transit and non-highway purposes from “other taxes and fees”). For that cost, Americans drove 2.7 trillion vehicle miles in light-duty vehicles. At an average occupancy of 1.67 people per vehicle (see table 16), that’s 4.5 trillion passenger miles, which works out to an average cost of 26 cents a passenger mile. 
In other words, transit is only “affordable” because three-fourths of the cost is subsidized, while less than 4 percent of the cost of driving is subsidized. I’m in favor of ending both subsidies, but someone has to pay those costs; when adding them in, driving is four times more affordable than transit."
"Whatever they look like, townhouses increase the housing supply in a relatively low-impact way. They can help keep Houston affordable while its coastal rivals commit economic suicide."
“...a study published last year by Chang-Tai Hsieh and Enrico Moretti which estimates that the U.S. economy is 14 percent smaller as a result of constraints on housing development.”
Finally, a little humor from George Rogers, who recently visited Houston from Chicago:
If Texas cities were people
Collin County (North Dallas): A Dad trying to be cool.
Austin: A Hipster trying to be cool. Lives at Urban Outfitters.
Fort Worth: Urban Cowboy.
San Antonio: Fort Worth's tejano buddy.
Houston: A nerdy kid that doesn't care about being cool.
Dallas: A dudebro that blows money at Neiman Marcus.
El Paso: Isn't that in New Mexico?
Dallas: I'm cool because I blew 500 dollars at Neiman Marcus.
Austin: I'm cool because I blew 500 dollars at Urban Outfitters.
Houston: What is cool anyways?

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Monday, August 15, 2016

Houston vs. NYC, Austin's rail fail, Tokyo's free market in land use, CA zoning impacts, and more

A few items this week:
"During my time there, I figured out a lot—about Houston. My hometown, I realized, is easy. The mail comes on time. You don’t have to wait for an hour, crammed in a small space with dozens of other people, just to get a prescription. You can use a full-size grocery cart at the grocery store. You don’t have to ask an employee to use his hook to pull down a package of toilet paper for you. You don’t have to lug your heavy groceries six blocks home. You don’t reach the end of May and find yourself trudging through sludgy gray ice, incredulous that it can still be so…darn…cold. You don’t find yourself freezing, needing a restroom, waiting for a train that never comes, before giving up and spending money you don’t have on a cab. Instead, you get to drive. 
That’s what I learned about Houston during my time in New York. What did I learn about New York? It’s a great place to visit. In the very late springtime.
"This new evidence adds to the extensive body of work demonstrating that land-use regulations reduce the stock of housing relative to what we would see in a free market. It’s particularly important in California, home to some of the country’s most regulated cities and the cities where land-use liberalization could have huge potential benefits in terms of allowing more people to live in high-productivity places."
"In the 1980s, Japanese cities were experiencing the same inflated housing bubbles that U.S. cities are today. Their planning methods, moreover, were rooted in Western notions about separating uses and limiting density. The federal government recognized that these regulations were the problem, so in 2002, it passed the Urban Renaissance Law. The law stripped municipalities of the ability to control private property. As a result, owners can build a variety of uses on their land, regardless of resistance from local bureaucrats or neighbors."
Who would have guessed that the Japanese could be more free market than America? Could you imagine if states or the federal government did something similar here?! 
"The line accounts for 2.6% of Austin’s transit ridership, while using 8.5% of the annual operating expenses for transit. 
Each trip taken on the rail costs taxpayers dearly, according to data provided by Capitol Metro. In 2014, the rail line had an operating deficit of $12.6 million. The upfront capital costs of $140 million, when amortized at 2% over 30 years, creates an additional $6.2 million annual cost to taxpayers. Add these two sums up, and then divide them by the line’s number of annual unlinked trips—763,551—and the per-trip subsidy works out to $24.62. Another commentator estimated that this figure is $18, compared to $3 for every bus boarding. Jim Skaggs, the retired CEO of Tracor and a local rail skeptic, wrote on his blog that “each average daily, week-day, round trip rider is subsidized an average of about $10,000 per year.”"
"Their causes for success are multi-faceted, and refute some of the received wisdom, but mostly boil down to their open economies. According to Site Selection magazine, Houston and Dallas were second and third, respectively, among the nation’s 10 largest metro areas in economic development in 2015. Texas was the leading state for economic development, and the two metros accounted for 70% of this...The recent growth has bolstered two metros that already have among the strongest corporate presences in America, and a state that has become famous for poaching companies and people from California, Illinois and New York. Much of it can be attributed to their good business climates at both state and local levels.

This begins with taxes. Texas is one of seven states that currently have no income tax, and has the fifth-lowest overall state tax burden, according to Forbes data. Texas and its various localities, including Houston and Dallas, also have light regulations regarding land use, labor rules, business permitting and compliance costs. Together, these two factors—light taxes and regulations—explain why Dallas, for example, was named America’s best business climate by, and why Texas routinely ranks near the top in economic freedom, recently improving its score even as economic freedom declines nationwide.
While NIMBYs often get road projects canceled around the nation (not to mention housing, offices and other aforementioned projects), this hasn’t stopped Houston and Dallas from building them. Both metros are among the leaders in per capita highway miles, sporting a large network of tolled and untolled highways. This has enabled multiple corporate job clusters to develop throughout both metros.
Indeed, Dallas and Houston reaffirm the notion that corporations and their workforces seek out places less for the generic lifestyle reasons, than for reasons that are simple, even blunt. They want reduced costs, whether that means low taxes, subsidies, or cheaper labor. They want ample space to expand, and a regulatory climate that allows this expansion. And they want infrastructure that will efficiently tie it all together. Texas’ two biggest metros are providing these conditions for economic development, and that is why they’re getting so much of it."

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Monday, August 08, 2016

Houston tops global city outlook, GDP, and brand rankings; 100 years of zoning now smothering the economy, and more

Back after some summer vacation time with a lot of smaller items to catch-up on:
"One can never be certain about these things, but it’s quite possible that excessive land-use restrictions are among the major causes of our long national economic malaise."
This is part of why presidents and the federal government are having so much trouble reviving the economy - the regulations causing the problem are outside of their control.
Finally, it's way too big to fit here, but an interesting and amusing infographic you might want to check out:  "If Texas Were a Storage Unit, What Countries Would Fit Inside?"  It will give you a new appreciation for just how big Texas is.

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Houston tops global city outlook, GDP, and brand rankings; 100 years of zoning now smothering the economy, and more

Back after some summer vacation time with a lot of smaller items to catch-up on:
"One can never be certain about these things, but it’s quite possible that excessive land-use restrictions are among the major causes of our long national economic malaise."
This is part of why presidents and the federal government are having so much trouble reviving the economy - the regulations causing the problem are outside of their control.
Finally, it's way too big to fit here, but an interesting and amusing infographic you might want to check out:  "If Texas Were a Storage Unit, What Countries Would Fit Inside?"  It will give you a new appreciation for just how big Texas is.

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Monday, July 18, 2016

Elements of an Opportunity City

As part of a project for the Center for Opportunity Urbanism, I tried to take some elements of Houston and generalize them to describe an Opportunity City model that other cities could emulate. I came up with three major items supported by many descriptive sub-points. I'd love to get feedback from readers in the comments.  Did I miss anything?

Elements of an Opportunity City

  1. Energized community with an open culture
    1. Big small town - combine the best of both worlds
    2. Belonging + Diversity
    3. Strong philanthropic/charity culture
    4. Strong civic/contributing culture
    5. Arts & culture scene
    6. Friendly, welcoming
    7. Openness to outsiders, immigrants, minorities
    8. Live and let live tolerance
    9. Future orientation, optimism
  2. Entrepreneur friendly (both for-profit and nonprofit)
    1. Emphasis on “the little guy” here, small business including immigrants; tech entrepreneurs too, but that’s secondary
    2. Pro-growth, pro-business
    3. Vibrant economy
    4. Diverse and high-quality restaurants
    5. Lots of small and mid-sized developers (urban and suburban)
    6. Small businesses
    7. Competition increases affordability, lowers cost of living, improves quality of life
    8. No zoning (lowers barriers to development)
    9. Predictable checklist permitting
    10. Low regulation
    11. Municipal Utility Districts (MUDs) easily enabling new subdivisions of housing
    12. Cultural tolerance of risk-taking and failure
    13. Supporting nonprofit entrepreneurs too
  3. Affordable proximity: can affordably live within range of where the jobs and urban action are, especially family-friendly neighborhoods with good schools
    1. Good mobility infrastructure opens up more housing within a reasonable commute range
    2. Allowing housing supply to meet demand - both urban and suburban - ensuring affordability
    3. Low cost of living -> high discretionary incomes -> vibrancy
    4. #1 standard of living (graph)

Houston has the nation's highest standard of living

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Sunday, July 10, 2016

On-demand is the future of transit, #2 friendliness = Houspitality, benefits of no-zoning, red vs. blue urbanists, and more

This week's items:
"Under a shared mobility system, the Gini co-efficient dropped from 0.27 to 0.11 for access to jobs; from 0.26 to 0.08 for access to health services; and showed near perfect equality at 0.01, down from 0.26, for access to education. The more efficient use of vehicles makes it possible to cut current prices of public transport journeys in the city by 50% or more without any subsidies."
"...transit can provide mobility for people who can’t or don’t want to drive, but it can’t relieve congestion, reduce transportation costs to taxpayers, save energy, reduce pollution, create real estate development, or stimulate the economy of a region."
"...these self-driving fleets will be significantly cheaper than owning a car, which sits idle roughly 95% of the time. With the savings, you will be able to escape your cramped apartment in the city for a bigger spread farther away, offering more peace and quiet, and better schools for the children. 
Your commute will be downright luxurious, quiet time in a vehicle designed to allow you to work or relax. Shared self-driving cars will have taken so many vehicles off the road—up to 80% of them, according to one Massachusetts Institute of Technology study—that you’re either getting to work in record time or traveling farther in the same time, to a new class of exurbs."
Finally, a great piece in the City Observatory on "Why Houston has been special since at least 1999," which goes into great detail about how we've been able to add more affordable density in the core, especially townhomes.
"...Houston’s lack of an official zoning code actually does allow for more flexibility, and densification, than the vast majority of American cities."

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Monday, July 04, 2016

Building to the Grand Finale - An updated analysis of the 45N rebuild

Happy Independence Day! (a bit of that theme in the post) I'm finally back from my travels. This week we have a guest post by Houston Freeways author Oscar Slotboom on plans for the 45N project, which was recently featured in the Chronicle where I was quoted.

In May TxDOT  posted updated schematics for the inner loop section of the North Houston Highway Improvement Project on the official project site. This is the second update after the seriously flawed original design released in April 2015 and the first update in September 2015.

The good news is that TxDOT and their engineering consultant HNTB continue their steady progress of improving the design, and my updated analysis now contains only four serious design concerns, down from sixteen in the original release and seven in the September 2015 update. See the September 2015 issue status list for the improvements in the latest version.

For the latest project design:
  • Three of the four remaining concerns are related to access to the northbound MaX (managed express) lanes from downtown, including the poorly situated proposed slip ramp, the lack of access to the MaX lanes inside the loop, and reducing northbound IH 45 to three main lanes at the Loop. TxDOT has agreed that the design in the area can be improved and is currently studying options.
  • TxDOT made a huge improvement in the latest design by restoring the on-ramp to northbound IH-69 from San Jacinto, which currently exists but was removed in the first two versions of the plan. But the new design does not restore the currently-existing southbound exit to Fannin, and still requires vehicles to exit to Almeda and then proceed west through Midtown, where the streets are not designed east-west traffic. So half of this problem is solved, and I propose possible designs to fix the other half.
Overall we’re very close to getting a plan which will be just about the best it can be within the already established framework and constraints. Let’s continue the ongoing refinement to get a plan worthy of a fireworks grand finale, with no remaining serious design concerns.

The MaX Lane North-South connectivity issue
TxDOT and HNTB say that their traffic model indicates that traffic will move through downtown much better, an average of 24 miles per hour faster, and touts the huge benefits for IH-69. But we all know that future traffic often exceeds projections as economic and population growth push volumes higher, and latent demand also consumes newly added capacity. In the larger perspective, north-south travel has become one of the most serious travel challenges at rush hour, with downtown, the West Loop and West Sam Houston Tollway all typically heavily congested.

With the IH-45 MaX lanes in this plan, construction soon to begin on the SH 288 managed lanes, existing HOV lanes on the Southwest, Gulf and Eastex freeways, the planned Hardy Toll Road extension into downtown, and possible future MaX lanes inside the loop on the Katy and Southwest Freeways, there will be a huge number of managed lanes converging into downtown with no dedicated path for managed lane traffic to get through downtown.

Ideally, this plan should have included a MaX lane connection through downtown on a north-south axis, both for transit and to give an option to motorists. The biggest beneficiary of the connection would be the Texas Medical Center, since downtown congestion limits their access to the workforce on the north side of the city.

While it may be too late to include a north-south connection in this plan, it is important that future options are not precluded by the project design. Within 6-9 months, it should be possible to do the following:
  • Launch a short-term technical study to identify future volumes of demand for MaX lanes in all directions around and through downtown, based on current and potential future MaX corridors. Also identify possible future long-term connection corridors, which could be tunnels.
  • On the section of IH 69 between Spur 527 and SH 288, consider a right-of-way set-aside for one or two managed lanes. Even if a north-south MaX lane connection is determined to be infeasible, this connection could serve as an extension of the SH 288 managed lanes to connect to the Southwest Freeway.
  • Based on the study results, adjust the design so as not to preclude potential future MaX lane connections. This could mean preserving space for an additional lane on the downtown spur (on the west side of downtown), or preserving space for connections between existing HOV lanes and lanes going through downtown, for example, allowing the Eastex Freeway HOV lane to connect into the IH-69 main lanes near IH-10 to allow passage through downtown to the medical center.
Very Nice, but Expensive
The most recent cost estimate places the overall plan cost at $7 billion, with the downtown improvements costing $4 billion.

TxDOT has fully accommodated the wishes and desires of downtown and north side interests, leading to a very ambitious downtown design which is very expensive. To put things in perspective:
  • The 35-mile-long US 290 project currently in progress from 2013 to 2017 has a total cost of $2.4 billion and a construction cost of $1.3 billion.
  • The 25-mile-long Katy Freeway expansion built from 2003 to 2008 cost around $2.7 billion, which would probably be in the range of $3.2 to 3.5 billion in today’s money.
  • At current funding levels, this project will consume virtually all funds for new construction for a period of around 10 years, or the construction could drag on for a very long time, 15 years or more
What does this mean?
  • There will probably need to be an increase in funding at the federal and/or state levels to complete this entire project in a reasonable amount of time, which I would say is seven years or less after construction begins since we don’t want downtown to be a construction zone any longer than necessary. 
  • Looking at the benefit/cost ratio of separate independent sections will be necessary if funding is short, rather than plunging straight into the entire costly downtown rebuild.
  • Independent sections which could offer the most benefit to relieve bottlenecks include the section of IH 69 between Spur 527 and SH 288, IH 69 on the east side of downtown, and the IH 45/Loop 610 interchange and adjacent sections. 
Looking Ahead
While the funding issue can be worked out in the next few years, getting the federal “record of decision” (ROD) is the top priority, since nothing can move forward until the ROD is received. Houston is a can-do city, and by getting this project done we’ll have perhaps the best, most urban-friendly downtown freeway complex in the United States.
  • Make the final needed refinements to the design as soon as possible, including adjustments to ensure any future north-south MaX lane connections are not precluded.
  • Get the record of decision by 2018, which is TxDOT’s stated goal
  • Start work on sections with the most benefit as soon as 2020.

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Tuesday, June 14, 2016

False sprawl tax, DART's rail fail, raves for Houston's 'zoning lite', racist red tape for aspiring Uber drivers, and more

Our featured item this week is the so-called "sprawl tax", which I argue against in the Chronicle here and on local KPRC TV here (I start at 1:15). I always struggle to keep my answers crisp in these interviews, but they worked a miracle in editing, distilling 10 minutes to 12 seconds, lol.

In short, I object to the label – sprawl tax – because it implies you have no choice (taxes are not voluntary). In these cases, people are explicitly *choosing* to live further out, whether for a bigger, more affordable house or better neighborhoods or schools. They’re voluntarily making that tradeoff. People are accepting this cost they calculate to get those benefits.  In every city they could choose to live closer to work, but that house might be smaller/older/more expensive/worse schools.  It makes about as much sense as calculating a “luxury car tax” for those who choose to buy a BMW, Mercedes, etc.  “Why are they choosing to do that when they could buy a Toyota Corolla for much less!?” Kinda obviously absurd when stated that way.  I’ll also note that the big metros that are low on their sprawl costs also have some of the highest housing costs in the country – those people are definitely not living at a lower cost.  Maybe someone should calculate a “urban housing tax” or “smart growth tax” for metros that restrict new development and push up prices?

This week's items:
“Holder explained that while fingerprint checks are a valuable law enforcement tool, they “often do not indicate whether a person who was arrested was even charged or ultimately convicted.” Thus, mandatory checks “can prevent people from getting a job even if they were never found guilty of a crime.” Because black men are arrested more than white men, the policy affects men of color disproportionately.”
Finally, despite some recent questioning of the value Houston's lack of zoning, we've recently gotten some great outside recognition for the strength of approach from both Bloomberg and Market Urbanism.

Justin Fox at Bloomberg refers to our approach as "zoning lite" and has this awesome observation in his piece:
"Houstonians do seem to understand a basic economic truth that many people in other cities have a remarkable amount of trouble getting their heads around -- that allowing more housing to be built makes housing more affordable."
He also has a companion piece, "They Know How to Build Apartments in Houston"
"If developers are building lots of apartments in and around Dallas and Houston, it's because they think they think there's demand. 
Some of that demand  is about living close-in, in walkable neighborhoods with public transportation close by. Yes, even in Houston, that's becoming a thing. But a lot of it is surely just demand for housing that a non-wealthy person can afford. Houston and Dallas have been building lots of it. Despite strong job growth in recent years, San Francisco, San Jose and the cities around them have not. That's partly because they're already more tightly packed than Houston and Dallas, and face geographical limits on expansion that Texas cities generally do not. But it's also just because it's so danged hard to get permission to put up apartment buildings there. Which is a shame."
Lastly, Nolan Gray at Market Urbanism has written one of the best pieces I've ever seen on Houston's approach to development: "Houston’s Beautiful (Yet Partial) Embrace of Market Urbanism".  Here's one good excerpt, but it's packed with them and I highly recommend reading the whole thing.
"Contrary to conventional wisdom, many US cities have a lot to learn from Houston. With tight development restrictions, out-of-date urban planning regimes, and burdensome regulations forcing middle- and lower-class Americans out of West Cost and Northeastern cities, Houston’s mix of affordable housing and economic opportunity is more valuable than ever. As other cities have attempted to maintain tight, centralized control on urban and economic development - exemplified by a recent push by Dallas to shutter local businesses in order to attract chains - Houston has opted to take a back seat to residents, entrepreneurs, and civil society groups in cultivating economic development and crafting urban communities... It is well past time that we start taking Houston’s success seriously."
I'm heading to California on business for two weeks - not sure if I'll blog again before July.

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