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Urbs and Burbs
Houston’s Pro-Middle Class Sprawl

Throwing away zoning codes may be among the best ways to help America’s middle class. At Marginal Revolution, Alex Tabarrok highlights a startling statistic from a recent Economist piece on Houston’s economy and future:

Unlike most other big cities in America, Houston has no zoning code, so it is quick to respond to demand for housing and office space. Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000.

The sprawl this regulatory regime creates is, according to the Economist, “perhaps the city’s biggest strength,” keeping housing costs low for middle class families. In contrast, housing restrictions in states like California drive out the poor and the middle class to such a degree that progressives identify housing costs as the biggest blue crisis today.

As the Economist notes, Houston’s sprawl right now has a dark side, typified by its reliance on “cars and air conditioning.” But technology can help provide a solution. Telework, for example, means that some of Houston’s workers don’t have to drive to the office everyday, thereby reducing their emissions. A less dense city with minimal zoning regulations and sophisticated technology usage may be one of the best ways forward for the middle class. Alternatively, better housing regimes in big cities could preserve or increase density by, for example, making it easier to build higher, thus also lowering housing costs. Either way, it’s past time for other cities to follow Houston in limiting their zoning rules.

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  • Sammywoof

    oh my

  • fastrackn1

    As a home builder in the Houston area I can attest to the positive content of this article. If I build within the city limits of Houston it only takes about a month to get a permit, and costs less than $2000. If I build outside of city limits in county areas, a permit costs $150 and is received over the counter in less then 1/2 hour. Also there are no inspections. You don’t even need to be licensed to build here.
    When I built in California a permit took 5 to 6 months to get and cost a minimum of $35,000. Dividing land takes 3 years or more in California, and a month or two in Texas.
    I have built in 4 different states and Texas is by far the cheapest and easiest. You can buy a nice lot here for $10,000 to $25,000, and a buy brand new home for around $100 a sq. ft.
    The lack of government intervention here is what makes it so cheap to live. And for all the lack of government intervention in the building industry, I can not see any difference between the quality of construction here and other places I have lived. It just goes to show what a waste of time, resources, and money having more government creates in a society.

  • Anthony

    When it comes to falling in love with cities, size matters. …to feel comfortable, secure and emotionally involved as well as to identify with that city:

  • Boritz

    “But technology can help provide a solution.”

    Another solution would be additional coal fired power plants to charge all-electric cars. The problem solved would be self esteem. Add an all-electric commute to curbside single stream recycling of paper, plastic and metal, and self esteem goes through the roof.

    • Curious Mayhem

      I’ll trade some self-esteem for a cheaper house 🙂

  • CaliforniaStark

    A major factor for the high cost of housing in much of California is the limited amount of land that can be built upon. The vast majority of California’s population lives along the coast. For example, the coastal area between Santa Barbara and San Diego contains probably less than 2% of the United States’s total land, but about 10% of the total population. There is more affordable housing inland, in places such as the Central Valley or Barstow, but relatively few people want to live there. The cost for a parcel of buildable land in the coastal California is extremely high, the result more of the law of supply and demand than regulatory issues.

    Another factor making housing prices high in California is there are buyers willing to pay for high-priced luxury housing; particularly those who work in high tech and bioscience. There are also a lot of very affluent buyers who live elsewhere, but want to own homes in coastal communities like Laguna Beach and La Jolla (Mitt Romney is an example). A lot of these high income residents, particularly in tech/science fields, like the current regulatory regime in California for aesthetic and quality of life reasons. The high tech mavens of San Jose may be into funding wind farms and electric vehicles, but they don’t show a great interest in helping those who live in what may be termed the “San Jose favela”, which is one of the largest homeless encampments in California.

    In saying the above, will agree that California has some of the most burdensome, and often irrational, building regulations in the country; and more regulations are piled on each year. Add to that the high development impact fees, additional fees for such things as low income housing, and recent climate change-related regulations — it is a regulatory nightmare. However, am not seeing any sort of regulatory reform remedying the high cost of housing in coastal California. Adding more density will overload a transportation infrastructure that is already far beyond capacity, and has little room to expand. The combination of limited land and being a desirable location to live are going to keep housing costs high. The fact is that if you want to live in coastal California, your going to have to pay a higher price than elsewhere.

    • fastrackn1

      Actually there is plenty of buildable land in Cali, even close to the ocean. The problem is that it is such a complete nightmare to get anything done with it that it over-inflates the price of developing it, and that leads to over-inflated housing costs. It is much easier and cheaper to develop coastal here in Texas, even on the beach, than anywhere in Cali. Nobody gives a crap if you bulldoze some bird nests to build something here. The inland areas of Cali have unlimited land, but it is still much more expensive than Texas, and it still has the same nightmare regulations and development expenses as the coastal areas. The only thing “desirable” about ‘parts’ of Cali is the weather, the rest of it is an over-hyped mess. I lived and built in the San Diego area for 7 years, made my killing, then got out. I got tired of all the regulatory nonsense. Supply and demand is not as much of the issue as you think. If you put the identical building and development regulations, costs, etc. in Cali, as we have here in Texas, you would see a dramatic drop in housing prices in Cali of probably 50% or more.

      And then there is the Cali mentality…but I won’t go there….

    • Andrew Allison

      Local government in California figured out that real estate is a milch cow. First it was ever increasing tax on insanely appreciated property then, when Prop 13 put a stop to that, regulation and fees of every conceivable kind. The fact that the resulting increase in the sales price of new developments increased property tax was, I’m sure, not a consideration [snark].

  • Andrew Allison

    I do wish that TAI would take a serious look at its naive belief in telecommuting. Houston is Los Angeles redux.

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