The Economist: “Houston is not pretty, but it thrives”

March 15th, 2015

houston-nozoningMy new hometown of Houston continues to draw interest of how its lack of a zoning code has invigorated economic development. The latest piece is from the Economist sums up the city well: “Houston is not pretty, but it thrives.” I couldn’t agree more. Despite the slowdown from dropping oil prices, Houston’s regulatory vacuum will help the city continue to grow:

Paradoxically, perhaps the city’s biggest strength is its sprawl. 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. Houston’s reliance on the car and air-conditioning is environmentally destructive and unattractive to well-off singletons. But for families on moderate incomes, it is a place to live well cheaply. …

If disaster is avoided, it will be because Houston has reached a critical mass where employers keep moving in because others are already there. Joel Kotkin of Chapman University in California argues that thanks to cars, even over its vast size, Houston creates the same possibilities for people to meet and share ideas that generate wealth in denser cities such as New York. Sprawl may not be pretty—but it seems to work.

All too often, government is seen as the only force that can slow an economic downturn, when it reality transferring wealth to non-producers prolongs and deepens inequality. Houston provides a metric of how less government can allow people of all classes to thrive, even in down times.

Tyler Cowen puts the point well.

If we think about, what are the best cities in the United States, particularly for the poor, it’s places like Houston, which have no zoning and which have very easy regulatory systems in which you can build. You can get a permit to build within a matter of days, compared to New York where you’ve got to go through a dozen different permitting processes and you have to hire specialized people whose only job is really to stand in line to help you get through the process….So, people of modest means can still buy a house in Houston. And they can’t do that in many other places in the United States because of zoning and not-in-my-backyard rules, a kind of secession of the rich, not in terms of gated communities but in terms of adding on rules and restrictions on how large your lot has to be in order to build a house, how many people can live in the house etc. All of these things have made it extremely expensive to buy in any of these cities, which use more top down planning.