The Wall Street Journal's take on Houston's housing market

The Wall Street Journal has a piece on Houston's relatively laissez-faire approach to land-use regulation. (via Planetizen; link good for seven days). Particularly interesting is the article's comparison of Houston to California and the Northeast:

Houston's model is in stark contrast to cities such as Boston and San Francisco, which have strict zoning, exacting building codes and laws governing historic preservation.  Some economists, including Edward Glaeser of Harvard University, say excessive regulation in such cities has slowed construction to the point where demand has outstripped supply, fueling a run-up in home prices.

In the once-sizzling markets where home prices are falling, housing costs are double, triple or even quadruple those of Houston.  The danger, says Dr. Glaeser, is such places have priced out today's highly skilled "knowledge workers," forcing them to live in a more affordable locale where their contribution to the economy might not be as great.  "These are places where only the elite can live," Dr. Glaeser says.

Houston's also paid a price, of course, as the article notes.  It has lots of sprawl and lots of what most people would consider an incompatible mingling of commercial, retail and residential.

I'm not endorsing Houston as a role model for Austin.  But I think we can let housing supply keep up with demand without resorting to Houston's laissez-faire mismash.  The formula's pretty simple:  (1) allow smaller lots; (2) allow more multi-family; (3) allow row houses and other land-minimizing, single-family development; (3) allow greater height and density on principal corridors (without resorting to the gimmick of calling it a "bonus"); (4) allow more large houses, garage aparments and duplexes; and (5) eliminate costly micromanagement.  We can do all that without putting a skyscraper or strip mall in the middle of a residential neighborhood.

Glaeser's observation about the "creative class" is particularly pertinent to Austin.  Its weirdness -- its bohemian culture -- eventually will be a casualty of spiraling housing costs.  The over-regulation pushed by neighborhood groups is the main threat to Austin's vibrant alternative culture, not a means for preserving it. 

The comparison to California is especially apt because many of our neighborhood advocates believe that California-style regulation should be the model for Austin.  The McMansion ordinance, for example, is based on Palo Alto's, a city which, by strangling the housing supply, has managed to push its median home value to well above $1 million.  I personally think that permitting a few homeowners to cartelize the housing supply is a pretty crappy strategy for creating wealth.

Comments

[M1EK]

Don't fall for the hype. Houston, while it lacks a strict use-based zoning code, has other regulations which more than make up for it in the "forcing sprawl" department. (Minimum lot sizes and parking requirements much more strict than even Austin's suburban code - i.e. our original regulations, for two). Then you've got all the freeway subsidization by the center-city, and sundry other market interventions.

More here: http://mdahmus.monkeysystems.com/blog/archives/000270.html

Sprawl is almost never the result of the free market.

[AC]

I hadn't seen this paper; thanks for the pointer.

I'll wait until I've read it before I respond to your Houston point.

My response to the rest was too long, so I'm making it a separate post.

[Ben Brumfield]

I completely agree with the Houston article. Having lived there for most of the mid-nineties, the lack of zoning and wide-open land was what made for cheap, abundant housing (i.e. sprawl). Unsightly, pedestrian- and bicycle-unfriendly, but on the other hand it's remarkably diverse in terms of economics and culture.

Austin is segregated and socially stratified by comparison to inside-the-loop Houston.

[M1EK]

The housing isn't cheap because of the lack of zoning - it's cheap because Houston built essentially all the highways anybody ever asked for, and never took any land off the market for any reason whatsoever. This could be a mix of good to bad depending on your stripes - but it doesn't really map to zoning regulations. Houston's rules are actually stricter against high-density housing than are Austin's; and the remaining effect of zoning codes largely have to do with commercial properties, not single-family residential.