Tuesday, February 26th, 2013

Reason #763 Why Houston Is Prosperous by Keep Houston Houston

Matty G has a short post up on the economy of Breezy Point, Queens and my first reaction is “right, this is reason #763 why Houston is so prosperous.”

Mostly it has to do with annexation. At one extreme end you have a city like Philadelphia. Philly isn’t all that bad of a place, but when you look at the massive growth of NYC and DC, you have to consider the city’s development trajectory to be a failure. Philly lost population during the nineties and was flat during the aughts, and the city largely coasts on the infrastructure of previous generations. Roadway expansion (e.g. double-decking the Schuylkill) and transit expansion (e.g. Roosevelt Subway, Swampoodle Connection) have both gone nowhere. Taxes are high, services are low, and what little growth has occurred mostly takes the form of cancerous exurban development which has consumed productive farmland without much housing to show in return. Detroit follows the same pattern.

But if you look at the city boundaries this all makes sense. The place is hemmed in on all sides by small boroughs and townships. In some directions you can go from Center City to out-of-the-city in less than four miles.

The fun continues outside the city boundaries. There are no big suburbs outside Philly; instead, counties are a bouillabaisse of boroughs and townships of a couple thousand acres each. This is about the size of your basic Sunbelt master-planned community, so it isn’t particularly surprising that the local governments function more like homeowners associations. Exclusionary zoning is the norm, and most residential subdivisions are required to include large swaths of “open space” which is mostly about maintaining the visual deceit that you live in the “country” and not a suburb.

Meanwhile, in the middle of the annexation distribution you have a city like Dallas. Dallas goes out about eight to ten miles, plus Far North D, which is like an extended middle finger of garden apartments sticking into the adjacent cities. An east-west trip across Dallas is about 20 miles. But while Dallas is in the middle of the “city annexation” distribution, DFW as a whole is hardly in the 50th percentile in terms of prosperity and quality of life.

There is a reason for this: Where Dallas ends, the mega suburbs begin. Arlington and Plano are respectable cities in their own right, holding about 360,000 and 270,000 people, respectively. Carrollton, Frisco, Irving, and Grand Prairie each clock in well above 100,000. Large suburbs are not always favorable to “urban” things like mid-rise and high-rise structures, or LRT and other rail transit. Frisco in particular opted out of the DART taxing area, using sales tax money to subsidize commercial development instead. But large suburban jurisdictions generally tend to have coherent transportation planning, well-developed park systems, and a variety of housing types, including multifamily and small-lot single-family.

Big suburbs also make more effective use of land. The easiest way to measure this is population density. Bellevue, Washington clocks in at 4000 people per square mile. Plano “sprawls” at 3800, Arlington at 3900. Irvine, California holds 3200 a mile, and has what is perhaps the most coherent bike network in SoCal, combining near-100% arterial bike lanes with continuous off-street paths.

Meanwhile, back outside Philly, Exton – a major Amtrak and SEPTA stop – contains fewer than 1400 people per square mile, while neighboring East Whiteland township contains fewer than 1000. Density scarcely improves as you get closer in. The major corporate centers and edge cities of King of Prussia and Plymouth Meeting straddle multiple townships which each contain fewer than 2000 people per square mile. By contrast, even Frisco – which is exploding in population and has annexed a lot of vacant land in anticipation of future development – is already at 1900 people per square mile.

Which brings us to Houston, the opposite extreme. Houston’s expansion knows no geographic or political boundaries. When other cities incorporate, it just goes around. Suburbs like West U, Bellaire, and the Villages become enclaves. Strategic annexations of roadways and other tracts of land extend Houston’s reach even further. A cross-section of strategic Houston annexations from Prairie View to Lynchburg measures 65 miles across. A trip from Willowbrook to El Dorado is forty.

When your city is this large, it leads to some interesting paradoxes. Houston’s nominal population density of 3600 people per sq. mile is surpassed by many of the enclaves. West U, in particular, is north of 7000. But Houston is scattered with pockets of density above 10,000/sq. mi, and portions of Gulfton and Gulfgate check in north of 20k. Houston’s 3600 is also almost exactly 30% higher than Phoenix, which pursues the exact same transportation and annexation policies but with Euclidean zoning.

Really rough back-of-the-metaphorical-envelope calculations tell me that if you drew a line at Beltway 8, you’d come out with a population density in the 6000s. (Note: see followup post.) Which is really incredible. That’s higher than Portland or San Jose, and almost to Minneapolis and Seattle, both of which have more constrained geographic boundaries. And this density is achieved in a relatively young, Sunbelt city, that grew up almost entirely around cars.

Not bad.

The reader may note that the title of this blog post said “prosperous,” while an earlier paragraph on Dallas mentioned “quality of life.” This because the two are indirectly related. Prosperity is inextricably linked to population; you need people to have an economy, you need people with skills to have clusters, the more people you have the more skills there’ll be and the more clusters you’ll get. Likewise, life is typically more enjoyable if there’s more stuff. What the stuff is doesn’t matter – it might be restaurants, museums, churches, or death metal. People do stuff and the more people you put in reach of yourself the more stuff there is and the more likely it is you’ll find stuff you like.

Now there’s two ways to gain access to people and stuff. The first is you can put people closer together. The second is you can build faster transportation so it’s easier to get to them. The Chicago “L” is a slow loris, but at 11000 people per square mile citywide, it’ll still take you to a lot of places. The intersection of North and Halsted affords a view of a set of three successive 10mph corners on the Ravenswood and Evanston Ls. But as you can see there’s also a whole of stuff built there. On the other side, Phoenix is not particularly dense, but you can always hop on this thing and go wherever. Of course the best option is to combine density with high-speed transportation infrastructure which gets you the spur through Midtown or perhaps Roppongi.

Both of these things, land use and transportation, are more easily accomplished in a larger governmental jurisdiction. The primary opposition to land use is NIMBY – “I don’t want to look up at the Ashby high-rise while I’m mowing my lawn.” The primary opposition to transportation infrastructure is, again, NIMBY – “I don’t want to live next to this freeway.” The latter is somewhat more understandable, since freeways generate noise and pollution externalities that residential towers don’t. But in both cases you’re pitting NIMBY concerns against regional concerns. The larger a city you have, the more diluted the NIMBY voices are within the overall governmental framework.

About the only way to screw this up is to devolve decision-making authority to sub-units. DC and NYC do this with zoning decisions, which is sort of exactly why DC and NYC have ludicrous zoning policy. By contrast, Houston’s super neighborhoods are strictly advisory bodies. If you had any doubts you can check out the official site which uses the words “stakeholder,” “plan,” and “priority” twice each in the span of three paragraphs. Anytime you see those words, you know that no actual, real decisions are being made. And that’s the right way to do it.

This post originally appeared in Keep Houston Houston on November 1, 2012.

Topics: Demographic Analysis, Public Policy, Strategic Planning, Transportation
Cities: Houston, Philadelphia

87 Responses to “Reason #763 Why Houston Is Prosperous by Keep Houston Houston”

  1. Racaille says:

    I think that the comparison between Houston and Detroit is really a stretch and a non-starter. I also believe that anyone who believes Houston’s economy has significantly rotated out of energy is ignorant of the facts.

    Aaron had mentioned Houston’s chemical industry. Well I can assure you that 95% of those chemicals are based on petroleum. They might have the largest medical center, but that’s not due to the quality of care, it because of the shear amount of patients the Cardiac Belt generates. It’s simply moving the slaughter house to where the cattle is.

    Furthermore, based on the changing demographics, influx of immigrants, and the laissez-faire attitude of Houston’s planning organizations (and Texas in general), Houston is quickly becoming the Mexico City of the US. And if you the place aerial photos of both cities side by side, the similarities are stunning.

  2. Tory says:

    For what it’s worth, I’ll insert into this thread that the case can be made that Houston has the highest standard of living of any major metro in the U.S. and possibly the world, if you equate standard of living with the cost-of-living adjusted average wage. More in the middle of this post, including the graph and additional links:

  3. Tory says:

    For what it’s worth, I’ll insert into this thread that the case can be made that Houston has the highest standard of living of any major metro in the U.S. and possibly the world, if you equate standard of living with the cost-of-living adjusted average wage. More in the middle of this post, including the graph and additional links:


  4. John Morris says:

    I do find the so called “liberals” total lack of concern for the urban middle class pretty galling. To a large extent cities like Houston are built on the failures of other cities to fill the need for affordable urbanism.

    Destroying mixed use urban areas was a central “progressive” goal until a few years ago.

    Government backed “loans” are not the solution to the problems caused by government induced shortages. We need to rip out the costs, which to some extent, Houston is doing.

  5. Vince says:

    John and Tory, even though this thread has perhaps gone on long enough, I have to ask you both a few questions. Who says that liberals have a complete lack of concern for the urban middle class, and what do you mean by saying that destroying mixed use urban areas was a central goal of liberals until a few years ago? Those are two of the whackiest statements I have ever read.

    Tory, Houston may offer a high standard of living to people using your measure, but there are other measures by which it would not be considered a high standard. For example, if I had to spend time in slow-moving traffic every day, I would consider that a reduced standard of living. I know some Houstonians don’t have to spend time in traffic every day, but I would suppose there are many who do.

  6. John Morris says:

    Well, as far as the lack of concern the record sort of speaks for itself. Long standing policies like rent control in cities like NY should have proved themselves enough of a failure after 70 years for honestly concerned people to be questioning them. Ditto, with many of the regulations, unions and zoning laws that have pushed up the cost of housing- especially since so much of the progress in places like Soho & Williamsburg came about by people willing to break them.

    Who empowered monsters like Robert Moses to destroy thousands of American neighborhoods? Who still doesn’t question the unlimited use of eminent domain for almost any reason?

  7. Tory says:

    Houston certainly has tough rush hours, although the average commute here is about the same as most big cities. It’s a remarkably easy city to get around outside of rush hour – something I just heard reinforced by a new couple I met that just moved here from Chicago. And more and more people are choosing to live in the vibrant inner loop and avoiding the commute problem altogether.

    I would agree that “standard of living” does not equal “quality of life” – where I would include things like traffic, climate, topography, etc. – but it’s certainly hard to have a low SoL and a high QoL (maybe expensive and mostly low-paying Hawaii would be an example of that?). But what I like about cost-of-living adjusted average wages as a proxy for standard of living is that it gives an objective measure for government and economic development officials to be held accountable against, vs. vague quality of life goals, press releases, and media events. “Look we revamped part of a park, or opened a hip new mixed-use project or spiffy light rail line or streetcar – we have great quality of life!”

  8. Vince says:

    John, I can’t picture how you think New York City would be different, in better ways, from the perspective of a middle-class person, if it had no zoning laws, rent control, or organized labor. Any specifics?

  9. John Morris says:

    Obviously, there’s no way to win a counter factual argument. It’s pretty clear that NYC and every other city with rent control has a huge affordable housing problem.

    NYC, is a great model since so much of the city’s basic structure; almost all of the subway system and a large mass of the basic apartment stock comes from the period before these policies were dominant. “Progressives” gave us East New York, and isolated public housing blocks on barrier islands like Rockaway and Coney Island. (NY segregated public housing until the early 1990’s)

    Proof that they are full of it how many hipster, liberals only survive by living in sublets or lofts which wouldn’t exist if people obeyed the law.

    BTW, Houston’s claim to be a free market city is also a scam since parking minimums, lot sizes, set backs and other de-facto zoning codes are widespread.

  10. Tory says:

    > BTW, Houston’s claim to be a free market city is also a scam since parking minimums, lot sizes, set backs and other de-facto zoning codes are widespread.

    It is certainly not a perfectly free market, but it is more free market than any other major city. We do have requirements to get a building permit, like adequate parking, setbacks, etc., but we don’t dictate land use (like a single-use zoning code), and we don’t have corrupt zoning boards adding cost, risk and uncertainty to developers. If you meet the checklist, you get your permit. And my understanding is that we’re also pretty easy on approvals for variance requests from the checklist, inc. building up to the sidewalk in denser areas. A new code going through now will allow more flexible parking arrangements, including substituting bike racks for parking spaces.

  11. John Morris says:

    I am somewhat familiar with that, Houston does come up with with people I talk to when I visit Queens.

  12. Tory says:

    That’s great for Chicago. Glad to see they at least have something good happening among the problems in the broader context (see excerpts below). Chicago’s great strength is that they have the most vibrant inner core in the Midwest, which is attractive to all those Big 10 college graduates who want to stay within a days drive of home (DFW and Atlanta are similar regional hubs). The question is if Chicago can parlay that into turning around the broader metro area?

    In the anecdote/single-data-point department, I just met a couple from Chicago that moved here this week, and they were raving about the job opportunities, lack of snow, affordable big nice houses, ease of getting around, and restaurants. I was sorta surprised to hear them say our rush hour traffic was mild compared to Chicago.

    …despite the loss of 200,000 people in the 2010 census. –

    This isn’t to claim that Chicago has it made. Beyond the glitz of the mega-Loop, the city has ominous problems, from a gang-fueled murder wave to the seemingly unending cycle of poverty, abysmal education, broken families and joblessness, particularly in minority neighborhoods on the South and West sides. Unpaid pension bills and hefty public payrolls could drive out business. The middle-class exodus to the suburbs could resume if Chicago schools don’t improve before today’s 20-somethings start having children.

    Just as worrisome, the city center often looks good only because the region generally is doing so poorly, lagging many others in recovering from even the 2001 recession. The millstone now is older suburbs, with shrinking economic bases, aging populations and many of the social ills of long-struggling city wards.

    If for decades after World War II we asked whether the area could prosper with rich suburbs but a dying inner city, the question now is whether the area can prosper with a thriving core but sinking neighborhoods and inner-ring suburbs around it. “We’re creating this paradox of prosperity and despair at the same time,” says Joe Schwieterman, director of DePaul University’s Chaddick Institute for Metropolitan Development.

    Still, there are reasons to worry that even a vibrant hub won’t be enough to sustain metropolitan Chicago. The region’s edge cities never developed the amenities needed to keep a new generation of talented young adults living there, and those young adults now are moving, some to Chicago and some to other states, Mr. Cross says. Left behind are suburbs and their aging populations, with minority residents with smaller incomes increasingly moving in.

  13. John Morris says:

    We also can’t grade Chicago on a curve. Considering the urban assets, leading colleges, top tier museums, transit & commuter rail that the city brought to the table it should be able to have at least a thriving core.

    Pittsburgh’s colleges in relation to the size of the city have a similar effect- as long as the students and research dollars keep flowing.

    Chicago’s performance is terrible when you account for the assets the city had at the start.

  14. John Morris says:

    One of Dallas’s great real estate mysteries has been solved. State Farm insurance looks to be moving thousands of jobs into the area- most likely, at least partly from Springfield Illinois.

    In the last month, Cardinal Health said it was moving 700 jobs from Waukegan, north of Chicago and took a charge for the loss it will take on the sale of it’s factory and office complex there- making it likely it will be moving more jobs out. Several other tech companies like, Other World Computing have moved from Illinois to Austin.

    The sweet spot right now is clearly the high cost suburbs of NY, NJ, Philly, Ct. Texas, looks like a great relative value.

    One big area I disagree with is that Austin is a huge part of this puzzle.

  15. John Morris says:

    There is no doubt, that compared to the absurd array of fragmented suburbs in much of the Northeast, Houston has to look great.

  16. John Morris says:

    From a year ago..


    Houston is not the main destination for , California tech companies- Austin is with Dallas a fairly strong second.

    My guess right now is that fully diversifying the economy of Houston means linking the total region much more strongly than it is now.

  17. Tory says:

    Here’s how the industry clusters shake out in Texas:

    Austin – tech, higher ed, state govt
    Dallas – telecom, tech, distribution/logistics/transportation, banking
    San Antonio – tourism, military, some biotech, cybersecurity
    Houston – energy, port/trade, chemicals, medical, aerospace/NASA

    Industry clusters bring sustainable growth in high-income jobs, but diversity provides risk mitigation. Most great cities have key industry clusters that drive their growth. Houston is no exception. What I don’t understand is how regional linking (the Texas Triangle, I assume) would provide diversification?

    There was a Dallas Federal Reserve report many years back I wish I had a link to. It analyzed the Texas Triangle metros and noted that they were very complimentary in their industry clusters, with little overlap or direct competition, and that if Texas geography had been different, they might have all ended up together in a single mega-metro like NYC or Chicago.

  18. the urban politician says:

    John Morris said:

    “Chicago’s performance is terrible when you account for the assets the city had at the start.”

    And the assets that John Morris listed are:

    “leading colleges, top tier museums, transit & commuter rail”

    In what way do these assets benefit anybody but the educated elite? Chicago’s downtown core, arguably booming more than any other in America, is booming as a result of assets that tend to benefit mostly the elite, and mostly benefit the core of the region.

    Now if Chicago had low taxes, no unions, and cheap laborers from China, as well as no regulations, and yet still couldn’t keep its industrial base around, then I would agree with you that “Chicago performed poorly despite considerable assets”. But the reality is, Chicago’s greatest assets are the ones that are currently at work making the core a very desirable place to live & indulge.

    In other words, I really don’t see your point.

  19. Chris Barnett says:

    I wouldn’t count on NASA as an economic driver for the foreseeable future.

  20. John Morris says:

    I guess I’m assuming a lot of cross pollination which is often hard to quantify. “Tech” is sort of an increasingly meaningless term as a big component of technology is integrated into almost everything -robotics/manufacturing medical/technology

    Houston is know as a big business city and Austin is known for startups. Also, for Dallas, it’s important to link to other places since the city is considered too boring to stand alone.

    Also, each city alone at this point really lacks critical mass

  21. Tory says:

    Well, they’re already very well linked by freeways, freight rail, and frequent cheap flights and inter-city bus service like Mega-bus, so I’m guessing you’re calling for high-speed rail? That’s a really hard multi-billion dollar case to make, IMHO, but evidently a private company from Japan is looking at doing it without public subsidies, which would be great if they can do it (I’m skeptical). Even if it were built, I’m not sure the fares would be all that much lower than flying, so I have trouble understanding the marginal integration value it would bring. Maybe it is a “hard to quantify cross-pollination”, as you say, but I have trouble imagining specific scenarios where it would open up new ties that don’t already exist.

    > Also, each city alone at this point really lacks critical mass

    I think if you look at the growth statistics the last decade or more for all the Texas Triangle cities, it’s hard to argue they haven’t hit some sort of critical mass. DFW and Houston are the 4th and 5th largest metros in the country. Austin is certainly not SF/SV – nobody is – but it still seems to be generating an incredibly healthy growth rate around tech.

  22. John Morris says:

    Since when is a good transit & commuter rail system something that just benefits an elite? To the extent that happens it points to bigger issues the city has creating lots of stable, transit oriented neighborhoods.

    The low density levels along Philly’s main line tell the same story of being unable to fully leverage the asset into solid transit oriented growth.

  23. John Morris says:

    Yes, the geography, relative distance and growth rates make a good case for high speed rail. As you have stated, the size of a community really has a lot to do with travel times.

    I also see lots of value in building up the core in all these places.

  24. John Morris says:

    To place the scale in perspective, Houston’s 2011 population of 2,145,000 isn’t that much more than Manhattan’s estimated population today of around 1.7 million.

    Serious critical mass and economic diversity only shows up if you combine the total triangle and estimate a growth rate.

  25. M.W. Brown says:

    Tory, do you live in Chicago? I do. I have for 20 years. I’ve never met anyone who was the victim of murder. I’ve never seen anyone murdered. I’ve never stumbled onto the aftermath of a murder. I’ve never been murdered myself. I also live in a diverse, multi-ethnic, multi-class (tending toward the middle and lower end) neighborhood. We have crime. I’ve heard about it on tv and read about it newspapers and heard people I know talk about it. It must be true. I’m also pretty sure its isolated to some narrow areas and is focused on creating and protecting markets without the benefit of government regulations. The FBI, Illinois State Police, the Chicago Police were all quite effective at beheading the large, organized gangs involved in all sorts of money making (sans government regulation). What we’re left with is the shattered remnants of the gangs regrouping and reestablishing market segments in a much freer environment (without the external regulation of government markets or the internal market regulation of the gang organization). This too shall pass. Chicago in 1880 was by far a much, much more wicked and dangerous place.

    As for the folks who moved to Houston in February/March – what do you think they’ll be saying when its 104 degrees with 86% humidity lying on an oil fouled beach? I know what I’ll be saying when its 85 with 53% humidity on the pretty clean beach 5 minutes from my house. Oh, my only complaint on the commuting issue when I can’t get a seat on a packed L train home. I generally go my downtown Loop neighborhood bar for a few beers with the regulars until the trains are less packed. Then I stop by a Thai place, say hello to Sam, and get my order of Larb. Then its a 5 minute walk home – in the bitter cold (in winter).

    Are businesses moving into the Chicago region? Chicago city proper?

    Our taxes are high. Our officials corrupt (but nothing like they were under Big Bill Thompson – Republican).

    What happens when gasoline begins its steep climb up, up, up? I’m pretty sure there’s not a big ever-growing pool of oil under the ground for us to tap. I’m pretty sure industry had to be dragged kicking and screaming to the CAFE.

    (What’s the difference between the Japanese and American car manufacturers? In ’78 when CAFE was originally introduced the Japanese hired 100 engineers and said “Lets Get To Work!” the Americans hired 100 lawyers and said “Lets Go To Court!”).

    What is going to happen to all these suburbs and exurbs when people have to pay market prices for fuel? What’s going to happen when they clamber for the politicians to eliminate all taxes on fuel? (this will happen first) How are the massive investments in “infrastructure” (highways/bridges/interchanges/etc) going to pay for itself?

    Oh well. At least we’re living in interesting times.

  26. John Morris says:

    You have explained pretty well, the case for moving into an urban area like Chicago, but said nothing about why the city is still failing to provide, an affordable, safe lifestyle & jobs to a large enough group of people to keep from shrinking.

    As much as much of Houston may disgust me, the city is building on the failure of many other urban & suburban areas to fix problems- or in the case of vast parts of NYC, even admit they exist.


    At this point it seems far more likely that Houston’s pro growth ethos can be shifted towards smarter growth patterns than to believe that the dysfunction in many other cities can be fixed at anything like the scale that’s needed.

  27. Mike says:

    I do not hate Houston. Even if peak oil ends there is likely not doom and gloom waiting just around the bend for Houston. I am intrigued by the city and envious of its success. But as New Yorkers of the late 19th century tired of Chicago’s “Windy City” boosters, I too am tired of Houston boosterism.

    Houston is no greater than any other large American city. Houston’s lack of zoning is not the primary reason its success. Houston while diverse and successful benefits primarily from one undeniable fact. Twenty of the twenty-three largest companies in Houston are based in oil and gas. Right now it is very profitable to be in those businesses. Nothing benefits the city more than being the American hub for the most important natural resource we have except fresh water.

    I am tired of hearing that the typical features of a successful American city, great restaurants, entertainment, parks, recreation, amenities, and convenience are more superlative in Houston than anywhere else. In actuality they are on par with most all of our great cities. If you put enough people in one place there is bound to be some interesting variety.

    I am tired of hearing that the city’s open regulatory environment is the key to its success. I appreciate that it is easy to get things built in Houston and I think that it is a model more cities should follow. But let me offer this counter argument. It is easy to have open and unrestrictive regulations when you are building on green fields. No one is there to oppose you.

    Take New York City for example, a city 4 times as populous, 9 times as dense and 200 years older than Houston. Do you think zoning is to blame for high housing costs and difficult building conditions? Or do you think zoning is the political manifestation of hundreds of competing interests that need to be harnessed so that thousands of people can live together harmoniously? Any new development could potentially disrupt the delicate balance of life for many thousands of residents. Therefore it is a political necessity to have rules in place for how and where things get built.

    New York already went through its accelerated, unregulated growth phase. So how do your account for the time 50 to 100 years later where transportation innovations suddenly changed the way people got around? Instead of vilifying Progressive Era planner’s decisions on transportation and housing appreciate the fact that they faced difficult decisions for how to accommodate the automobile into a city that was never built for it and fix substandard housing conditions brought on by the free market.

    If you believe that the market should control Houston’s future and that political controls should not, that is fair. But then you also must acknowledge that the life cycle of the market will lead to an inevitable decline. When the market decides what the favored growth corridors in Houston are will it be as easy to commute to and from distant suburbs? Will the city be able to adapt when its population growth slows and its borders become fixed? Will Houston have the political will to build transportation systems that allow people to get around an increasingly congested city, without the expanding tax base to support it? Will the city be as open and permissive to not regulating the built environment after political interests become entrenched in local neighborhoods? That is not to say Houston won’t succeed. I look forward to seeing how what the future holds for the city. Enjoy the robust times now. But don’t think your city is immune from the problems that older more established cities face.

  28. M.W. Brown says:

    Chicago has to compete in a “low-road” economic network in which policies play out to create a “race to the bottom.” Chicago is still a union town – although, the labor environment has worsened under a well financed, concerted effort by business and government. With the hugely subsidized, publicly financed road network that makes companies infinitely mobile, coupled with the digital revolution business is in a position to play municipalities off of each other. We, in the USA have chosen a “low-road” economic paradigm. There’s nothing “natural” about this. Its not a “law of economics”. Its our choice. Luxembourg is the richest country on the planet (80K per capita) and has a manufacturing labor cost index of 112. The USA is 16th on the list below Japan, Germany, Switzerland, Norway, etc.. They pay more, export more, etc.. What is our problem? Houston has benefited massively from a public investment bonanza that started with the end of WWII. The investment bonanza in Chicago ended with The Great Depression. Is Houston enacting intelligent policies (with a long-term view)or is it developing rapaciously with a very short life-cycle? We also don’t have much in the way of BIG PENTAGON spending in this state or region. Texas takes IN more than it sends to Washington DC. Not so in Illinois.

    As for population, Chicago is trending UP. “Overall, Cook County, including Chicago, added more residents than collar-county suburbs, according to an analysis of census data by Mr. Johnson, previously a demographer at Loyola University Chicago.

    Cook County grew by 17,100 residents from 2010 to 2011, compared with an increase of 15,100 for the outer suburbs in the 14-county metro area that stretches from Wisconsin to Indiana.”

    Read more: http://www.chicagobusiness.com/article/20120628/NEWS02/120629792/census-data-shows-chicagos-population-finally-growing#ixzz2MbaOvAAs
    Stay on top of Chicago business with our free daily e-newsletters

    “Chicago’s outer suburbs, which enjoyed an average in-migration of 21,900 residents a year between 2000 and 2010, experienced a net out-migration of 12,300 between 2010 and 2011, Mr. Johnson says.

    The Chicago Metropolitan Agency for Planning cautioned, however, that the growth of the suburbs continues.”

    Read more: http://www.chicagobusiness.com/article/20120628/NEWS02/120629792/census-data-shows-chicagos-population-finally-growing#ixzz2Mbab1JF3
    Stay on top of Chicago business with our free daily e-newsletters

    I encourage Houston and DFW to continue on the growth pattern they’re on. In a land of infinite resources I’m sure its a fantastic idea.

  29. M.W. Brown says:

    Also, try googling “Debunking the Texas Miracle.” The Texas unemployment rate in 2011 was 8.2%. In 2011 the Illinois unemployment rate was 8.7%. Do you think those stats are relevant? (http://www.economist.com/blogs/democracyinamerica/2011/08/job-creation — and respectively — http://www.deptofnumbers.com/unemployment/illinois/)

    There may be other Texas policies that other states haven’t, and shouldn’t emulate such as the Texas Enterprise Fund – a slush fund going to the governor used to poach businesses from other states. It would seem that Texas’ per capita debt increase has been in “infrastructure” and has increased 140% per capita between 2000 and 2010. I read somewhere, I can’t remember (I think it was Texas Magazine back during Perry’s run) that Texas was, for the first time in its history, spending more on debt service than anything else government does.

    Is this a state positioned to prosper in the long term, or one that is temporarily benefiting from policies that are transient and fleeting?

    I think Chicago has its problems for sure. Our taxes are misspent (not sure they’re too high, but who knows). Our pol’s are corrupt as anyone else’s (we might hide it better with a ton of oil sloshing around though – yeah, I’m looking at you Louisiana, North/South Dakota, Texas, and Alaska) and our infrastructure has been woefully lacking comprehensive investment since the late 1880’s to early 1900’s. I do believe natural resource constraints are going to be factoring themselves into our economic fabric more comprehensively in the near future. At this point I believe the natural weaknesses in the suburban land-use paradigm adopted in this country will rear its ugly head. Viciously. Oh, I also don’t think, for a second, we’ll be able to deal effectively with it.

  30. John Morris says:

    @ M.W. Brown

    I thought of doing a really long point to point response complete with lots of supporting links. Many of the points you make show you have not read my comments well and have a very distorted and limited knowledge of urban history. Don’t feel bad about that, because not accidentally most people don’t know much about the role government has played in destroying cities.

    A) If you read my comments on this and other threads, you can see I’m not a big fan of Houston’s unlimited highway sprawl model and I agree that it’s likely headed for big problems related to the carrying cost of low ROI infrastructure. You act like Texas invented sprawl and that it doesn’t exist elsewhere when what it has done is develop ways to beat other states like Michigan, Ohio, New Jersey, Connecticut with municipal fragmentation and or hyper controlled zoning at the sprawl game.

    B) You underplay recent trends towards transit, density and smarter growth that are starting to develop in Texas. How these play out is critical.

    C) You act like other states don’t also spend/waste billions poaching companies from other states with countless special crony capitalist deals and handouts.

    I will be back to respond to your largely inaccurate comments on urban history and markets.

  31. John Morris says:

    Forbes and The Wall Street journal have stories showing the real migration from California is of the poor and middle class.


    It also seems like the stronger Texas job market isn’t the biggest attraction.

    “housing costs matter the most: the exodus from California was strongest when and where the gap in housing costs between California and other states was biggest. This detailed analysis confirms what the above chart showed: outmigration from California was most dramatic in 2004, 2005, and 2006, which were also the years when California home prices were most expensive relative the rest of the country.”

  32. Tory says:

    I think a lot of that earlier exodus was people cashing out of their massively appreciated CA house and moving/retiring to places like Vegas and Phoenix on that nest egg. After the crash, a whole lot more people were under water on their mortgage and couldn’t move as easily.

  33. John Morris says:

    That theory would be supported if higher net worth people were leaving more than the lower income poor.

    Moving to Texas turned out to be a much better plan than buying a “cheap house” in Modesto or the Inland Empire.

    In many ways, the Texas story is closer to the Arizona, Nevada story in that growth is driven partly by affordability- more than jobs. But Texas’s economy has jobs and is still far more diverse than most lower cost states.

    Notice from the story, that California itself attracts people from high cost states like Massachusetts and New York.

  34. John Morris says:

    It’s very unlikely that the largest groups leaving with annual incomes from 0- 40,000 are property rich.

  35. Tory says:

    Well, there were/are certainly plenty of modest income Californians that were lucky enough to buy their house 30+ years ago and get to cash out nicely now as they near retirement, but your points are valid.

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