Scott Sumner  

Market urbanism in Houston

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Over at TheMoneyIllusion I did a recent post on the Texas economic miracle, which has survived the oil bust. Commenter ChargerCarl directed me to a very interesting slideshow (prepared by Barbara Tennant) on market urbanism in Houston, which is famous for having almost no zoning restrictions. As a result, developers are creating lots of interesting solutions to accommodate people who are moving back to the city. For instance, small single-family homes are being replaced by sets of townhouses:

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When the neighborhoods are complete, they are often quite attractive:

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And although most new units use traditional styles, the lack of zoning allows for more experimentation than in other cities:

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Just imagine what would be built in cities with a larger cohort of creative types, such as San Francisco and NYC.


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I'd encourage people to scroll through the entire document, if you are interested in urban design. I live near Boston, which used to produce beautiful urban neighborhoods full of townhouses. Today, zoning restrictions prevent us from doing sensible urban makeovers to turn neighborhoods of single-family homes into denser areas. And places like Los Angeles are now being hurt the most by zoning regulations.

Here's ChargerCarl:

LA developed similarly in the postwar period before we clamped down on zoning in the 80's. Now Texas cities are eating our lunch.
People are voting with their feet---in favor of the Texas model.

Comments and Sharing

CATEGORIES: Property Rights , Regulation

COMMENTS (15 to date)
mbka writes:


this is lovely. It's hugely important to have a rare example such as this, counter the majority technocrat opinion that everything, absolutely everything, ought to be managed.

It's also en example of something else, the importance of diversity, human, economic, legal, what have you. Only with diverse societal setups can there be the natural experiments necessary to find out which solutions work better than others.

Bernard Siegan's Land Use Without Zoning reported on Houston's success without zoning. For some reason that I do not understand, that city has not fallen like other cities for zoning.

ChargerCarl writes:

What I love about Houston's development is that it often takes place in single family neighborhoods, meaning you get a neighborhood with a variety of lot sizes and building types that makes for the type of architecturally interesting streetscape that people love.

Here's a similar neighborhood in LA that still allows this type of development:

Kevin Erdmann writes:

That slide show makes me want to move to Houston.

Scott, maybe you should change your plans about LA. Maybe Galveston?

Andrew_FL writes:

But when they vote with the rest of their body, will they negate the gains from voting with their feet?

Zach S writes:

Houston is no free-market panacea. One of the most onerous regulations in many cities is minimum parking requirements, and Houston definitely has these.

Parking often takes up a large amount of space, especially at the low end where surface lots are the only economical choice, and can significantly drives up the cost of development. This is especially true where an existing building would be replaced that pre-dates parking regulations. You can end up in situations where 1000 square feet of space requires 3000 square feet of parking.

The CBD IIRC does not have these requirements, but much of Houston does.

Take a look at Houston's parking requirements:

Houston also has minimum lot sizes in a section of their code that is not called zoning but is very similar:

Houston has an easier planning process, and that should be commended, but they still have Soviet command and control style regulations that have wide societal effects.

ChargerCarl writes:

Zack, you're absolutely correct. However, unlike most large American cities, Houston is moving in the right direction.

ThaomasH writes:

It's pretty much common knowledge (among economists) that zoning that prevents higher density residential and commercial development is bad for cities. It's sort of like the consensus for free trade, carbon taxation, EITC over minimum wage, opposition to crop and ethanol subsidies and taxing business income, and NGDP targeting*. It's a real puzzle why we have so much trouble getting through to politicians and the public.

** OK we're not quite there with that one but most economists think the Fed should be acting the way NGDP targeting wold indicate.

maynardGkeynes writes:

In DC, where I live, my objection is that in many cases the new construction, which is usually much larger, free rides on the beauty of the rest of the block, which is typically smaller scaled and less dense. If you are the first popup, you enjoy the benefits, while socializing the costs of crowding, loss of light, and parking on your neighbors. It then becomes a war of swords and shields, with constant one-upmanship, until the original aesthetic is destroyed (which is a loss if one liked the original look, often quite charming in the case of DC). Some very smart DC-ists (like Matt Yglesias) are all for opening the floodgates, but I respectfully disagree. Here is a link to some photos of street scenes. Decide for yourself.

Moderator I did preview, and the link doesn't seem to show up as a link when I use the link button, so i pasted it in also.

[I fixed the url and html for you--Econlib Ed.]

michael pettengill writes:

Are theso new housing units in Houston priced for families of five earning $30,000?

Ie, is this housing designed to enable the working poor to move into great school districts?

Or is this simply entry for young upper middle class into established upper middle class neighborhoods before they have gotten the decade of wage hikes that in the 20th century arrived by age 30?

Trevor H writes:

@micheal pettingill.

In answer to the first question, no, the newest housing units in the most convenient neighborhoods in the city are not priced for the bottom of the economic ladder.

Houston doesn't have great school districts. The buyers of those units probably have no kids or send them to private schools for the most part. There's plenty of decent, affordable housing with good schools in the suburbs where I live.

I'd be curious to see actual data, I assume the prototypical buyers are newly empty-nest professionals moving in from the suburbs.

Someone who has a few kids despite very limited economic prospects is choosing a pretty hard life no matter where they dwell.

whwb writes:

@maynardGkeynes: beauty is in the eye of the beholder. Is it right that the wealthy and politically connected should be able to prevent the relatively less wealthy and powerful from living where and how they want, simply to maintain their own subjective idea of beauty?

You mention socializing the cost of crowding, loss of light, etc--does the enforcement through zoning of a particular aesthetic not socialize the cost of low-density housing and urban sprawl? How did you determine (indeed how could anyone determine) that the cost imposed on you by an "ugly" house is greater than the higher rents those living in the ugly house would otherwise pay?

An argument could be made that people with (ugly) tattoos impose an aesthetic burden on others, and bring down the attractiveness of the human form as a whole. Should people not be able to get tattoos, or be required to have tattoo designs approved by a government organization, in order to maintain the aesthetic of humanity?

maynardGkeynes writes:

@whwb: It's not about aesthetics, it's about free riding. My tattoo neither benefits from, nor detracts from the value of your tattoo, so there is no free rider issue. The quaint charm of your Georgetown row house and the other 20 on your block clearly does benefit me when I decide to build my 12 story condo, and equally clearly, my 12 story condo, which blocks your light and is out of scale with your home, almost certainly does detract from the value of your house and neighborhood, by reducing the "quaint charm" that led me to build there in the first place.

Xenophon writes:

@maynardGkeynes: This hypothetical game is really fun. Let me play!

Alternatively, your 12-story condo could enhance the sales price of my Georgetown row house (and the other 20 on the block) by demonstrating to developers that so many people are willing to pay for units in a 12-story condo in this part of Georgetown that they should bid up the price of those row houses beyond what any buyer would otherwise pay… exactly so that they can buy the row houses and replace them with 12-story condos.

Seems to me that one can construct a perfectly good hypothetical “showing” that the owners of the existing row houses benefit from those 12 story condos, or a different hypothetical “showing” that the 12-story condo decreases the value of the row houses (to the current owners’ detriment). Absent actual data, I see nothing to make me confident that one of those hypotheticals is any more likely than the other.

maynardGkeynes writes:

You may be quite right in terms of "market" prices, I doubt that market prices fully capture true social value in such cases. One could simply call it a market failure (cities should levy taxes to purchase the air rights, but rarely do for reasons of political expediency, or people figure they will be moving away anyway; or it's a pretty good idea to be among the first to sell to the condo developer, before further condo development trashes the value of your home those of your neighbors who hold out). I think these reasons are real, not hypothetical.

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