How Good is Houston?
Ed Glaeser, font of much of the research that drives this blog, often confounds me. He’ll put together an excellent piece of academic research on urban issues, adding key insights to the way we view the organization of cities. Then he’ll turn around and write something in the New York Sun that looks like a press release from the desk of Randal O’Toole, a lazy, wrongheaded, and deeply ideological thumb of the nose to the rest of us urbanists.
Today’s example can be found here. Glaeser draws on his research in making quite a few indisputable points. New York is richer than Houston, but it’s also much more expensive. That expense is primarily due to the difficulty of constructing new housing in New York.* As such, many families are leaving places like New York to move to places like Houston.
Then he runs off the rails in all kinds of ways. Let me discuss a few of his mistakes.
Glaeser is forced to note that New Yorkers earn more than residents of Houston, but he makes a number of key omissions that benefit his argument improperly. First off, the comparison itself isn’t all that apt. Houston is, thanks to its oil wealth, the richest and most productive of the sunbelt auto cities, but New York is not the richest of the “progressive” cities in Glaeser’s sights–San Francisco, Boston, and Washington are all richer. New York also manages to spread its economic power over many more people than Houston; density isn’t irrelevant. One suspects that if the Houston metropolitan area expanded to include 19 million people, it would have an extremely difficult time providing the quality of life found in New York City.
Next, let’s talk about the desirability of homes in the two places. Glaeser’s own research indicates real wages in New York are lower than might be expected from productivity alone, because amenity flows (Glaeser’s terminology) have been increasing. The opposite is true in the sunbelt. Real wages have had to increase there over time, in order to compensate residents for declining amenity flows. This corresponds to Glaeser’s research on the consumer city; lots of people want to be in New York not only because they earn more, but because it is an unrivaled consumer experience. This, too, is relevant to Glaeser’s disposable income argument. Money goes farther in Houston, sure, but there’s less to spend it on. If we assume a diverse set of middle-class tastes, it should be obvious that there will be many households for which less dough in New York will be preferable to more in Houston.
This point is connected with another Glaeser complaint–that tax rates strongly favor life in Houston. But anyone reading his research (as opposed to his columns) would quickly answer “so what?” Glaeser himself writes that the rise of the sunbelt is due to growth in housing supply and despite declining amenity flows (which are not disconnected from low levels of taxation).
Glaeser’s meditation on differences in transportation costs is particularly unfortunate. A few initial points. The Center for Housing Policy concluded in 2006 that for families with an income between $20,000 and $50,000, roughly the same share of household budgets was spent on combined housing and transportation costs in New York and Houston. That is, cheaper housing for working families in Houston was offset by more expensive transportation. The same report also noted that for those same families, average annual transportation costs were $10,262, not the $8,500 national average cited by Glaeser. That was in 2006.
Glaeser’s own research also indicates that lower income households prefer to live near public transportation, or, in the absence of public transportation, near the center. Glaeser notes that the recent rise in gas prices constitutes a small actual increase in transportation costs, but he, more than anyone, should recognize that this will significantly impact marginal households–the same ones being pushed from high cost places to low cost places by expensive housing. And since 31 percent of household budgets goes toward transportation, its reasonable to think that a doubling of gasoline prices will be painful for many working class Houstonians.
Cost issues aside, Glaeser’s treatment of the driving life as inherently preferable is completely obnoxious. Sure, the average public transit commute in New York is longer than the average drive in Houston. Having done both, I can attest that driving commutes are frequently stressful and uncomfortable. Moreover, Glaeser completely neglects relative per capita congestion and accident costs.
But the most egregious part of this whole piece is the ridiculous assertion that Houston’s growth has been driven by the free market alone, and that it would be wrong to boost places like New York by tying Houston down with regulation. Outrageous. Glaeser knows that were externalities like congestion and carbon emissions priced consistently in both places, Houston’s cost advantages would rapidly evaporate. I know he knows this, because he just finished writing a report on green cities that praises places like New York for design features, including public transportation, that make them greener than places like Houston and greener than the national average. And this, of course, completely ignores the historical role of government policy favoritism for highways, suburban housing, and sprawl generally. Free market, indeed.
My point in all this is not that Houston is a terrible place. Lots of people love it for lots of good reasons. And Houston has also taken some laudable steps to increase density and to provide more and better public transportation. And I’ll gladly sign on the proposition that adding housing in places like New York and San Francisco should be a top policy priority.
But Houston is not a model city, and it’s not an example of market forces producing a superior product. Glaeser might just as easily have written a piece praising New York City for creating density unparalleled in the nation, for creating an incredibly dense rail network despite outright government hostility to such transportation options, for constituting one of the world’s largest and most dynamic economic centers, for enjoying a rate of emissions one-third the national average, for managing to add 250,000 people to the 300 square miles at the center in just the last 8 years, and so on. And he could have easily written a piece condemning the Houston metropolitan area for its environmental profligacy and growth based almost entirely on a willingness to build dull suburbs out into the wilderness, heedless of any impact other than that on urban growth.
This kind of junk is beneath an excellent academic. He can and should do better.
* I’m largely eliding the difference between city, county, and metropolitan areas. It’s easier that way, and Glaeser essentially does the same.
July 17th, 2008 at 11:03 am
busy commenting day for me…
I remember from when I watched the movie “The Matrix” back in ‘99, I remember the protagonist being told that those inside the Matrix will first fight him to protect the Matrix because it’s what they know. Sometimes I feel that way when talking about transportation/urban/quality of life issues.
How sad a serious academic who has done research would write a piece that’s meant to be red meat for real life Matrix dwellers. I hope he collected a nice fee, at least.
July 17th, 2008 at 11:33 am
Even as a Houstonian, I largely agree, but with a few caveats:
1. While you’re right that “there’s less to spend [money] on” here, I would guess that the difference is smaller than you’d imagine. My impression is that New York doesn’t have more categories of stuff to spend your money on (after all, we also have Broadway shows, Major League Baseball, university lectures, etc.) but rather more choices within each of those categories. That matters too, of course, but I suppose my point is that I’ve talked to a lot of transplants who are quite impressed with the extent of cultural and arts offerings here.
2. I really, really, really don’t think Houston’s cost advantage would evaporate with carbon pricing (although of course it would narrow). First of all, a non-trivial part of the cost advantage comes from the availability of immigrant labor. Further, in the last year I’ve seen Avenue Q for $35, had great seats at The Drowsy Chaperone for $40, had 25th row seats on the first-base line for $25, played in a tennis tournament for $22, eaten multiple courses at upscale restaurants for $30, etc., and I don’t see how carbon pricing would affect any of those things (eh, probably a little bit on food prices). And for that matter, our housing cost advantages wouldn’t completely go away, either–much of the difference today stems from the vastly different permitting and development costs, which wouldn’t change with a carbon regime.
3. I’d like to know more about the history of government regulations favoring suburban housing and sprawl (that for highways is obvious enough). Or is it just implicit in the highway subsidies?
4. I would be quite surprised if Houston hasn’t also added at least 250,000 people to the 300 square miles at its center over the last 8 years (the metro has grown by 1 million during that time). The real growth here is not in the suburbs anymore, and it hasn’t been since I’ve lived here (2002).
Actually, come to think of it, Houston is probably among the best evidence that you’re right that people want a more-walkable, less-car lifestyle. This is the place with the fewest housing development restrictions, and as gasoline prices have risen, the growth in high-density urban housing has been astronomical.
July 17th, 2008 at 1:05 pm
Ryan, congestion pricing would not affect Houston’s growth. It merely monetizes the deadweight losses from scheduling and travel delays. Houston drivers are already paying those costs.
July 17th, 2008 at 1:18 pm
“for creating an incredibly dense rail network despite outright government hostility to such transportation options”
I would correct that to say that they have “maintained” an incredibly dense rail network despite the government hostility. Most of the rail infrastructure in NYC was built during a time when the government was not hostile to rail construction (although they did alter some long standing jurisprudence to force the railroads [and Jay Gould in particular] to compensate those people who got elevated railways built outside their apartments).
While there have been some rail lines built since the end of WWII, most of the subway and commuter lines were already built. I would argue that the main governmental hostilities towards rail didn’t start until after WWII.
Here’s a subway map from just after WWII:
http://www.mensvogue.com/design/slideshows/2008/03/subway?slide=4#showNav
July 17th, 2008 at 1:51 pm
9th - Houston’s cost advantage wouldn’t evaporate with carbon pricing, but it would narrow. Houstonians get a break in two big ways–most obviously with their transportation choices but also because homes are generally larger and require more juice to heat and cool.
Now it is true that cooling is generally cheaper than heating, and that northeastern electricity is pretty dirty. But Houston still performs quite poorly. The difference, as with increases in gas prices, would be with the choices of marginal households.
Also, let me recommend The New Suburban History for background on, you know, suburban history.
Finally, Harris County (about 1800 square miles) has added about half a million people since the Census, so it probably hasn’t done quite as well as New York in the center. I’m not knocking Houston, though; I understand that center is making huge gains.
And AC, I know that’s true in the strict sense. My feeling is that’s not how drivers actually think. Consider the consumer reaction to gas prices, and imagine how preferences might shift if instead of zero monetary cost on congestion, the minute-by-minute congestion toll flashed through the length of your commute.
July 17th, 2008 at 3:17 pm
Congestion pricing should not affect migration patterns between cities. Without congestion pricing, there is lots of congestion, which makes the area less desirable. With congestion pricing, there is less congestion, but it costs more money to commute, which makes the area less desirable. In either case, the commuting costs should be capitalized into land prices.
So you’ve got to argue that prospective residents systematically underestime the costs of congestion. And you have to argue that they’re likely to underestimate those costs only for some cities, otherwise the systematic errors would cancel out.
July 19th, 2008 at 6:29 pm
bottomofthe9th said ¨This is the place with the fewest housing development restrictions¨
That should read ¨This is the place with the fewest GOVERNMENT housing development restrictions¨. Most development restrictions in Houston are via restrictive covenants and deed restrictions. Houston is not the free-for-all development market that people would have you believe.
July 22nd, 2008 at 6:58 pm
I’ve lived in Houston for 25 years, and I can guarantee that our “amenity flows” have been increasing steadily. The number of options here has grown exponentially, esp. in the last decade or so. I will admit we don’t have the absolute highest level of cultural amenities like NYC, but what we do have can pretty easily satisfy 95+ percent of American families. And outside of rush hours, with our freeway network, I can access almost all of them within 20-30 minutes. I don’t think you can say that across the boroughs of NYC.
The high transportation costs argument for Houston doesn’t hold up when you dig into it. We have relatively high salaries and cheap housing, so people splurge on their luxury cars, trucks, and SUVs - which is NOT the same as “Houston is an expensive city to get around.” Those people could just as easily bought a Prius or a Civic and cut their “transportation costs” in half - as in fact many of them are now doing.
February 4th, 2009 at 2:25 am
I have visited Houston recently and I can assure you that New York city just got in a dead end street with their financial budget. It’s affecting everyone, I can consider my family as a middle income family with a 70K per year but the cost of living is just out of control. I rent a 2 bedroom in queens for 1550 a month and very tiny apartment. between my wife and I our commute expenses are around 200 S a month and my kids are very young for school… wait until I get there and then my expenses for commuting will be around 400 A month… so lots of people are saying a good thing about NYC but honest to god… It is good for the people that can make more then 250k a year otherwise you should consider yourself living under poverty… what the state does to keep so many of us is giving us free health insurance for the kids and let you believe that you are making money that can’t be make anywhere else except NYC. I will tell everyone the real truth, this town is run by few thousands of greedy people that takes advantage of the other 8 million. So take an advice from me, Houston is probably less exciting than NYC but at least the leaders have faith in their communities and people. So please, if you have a family get yourself out of NYC before your kids blame you about it…