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JakilaTheHun (99.93)

Why Do Houston and Dallas Continue to Grow?

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February 20, 2012 – Comments (34)

From Malthusian Nectar

This morning, I was reading over the 2010 US Census population figures for major metropolitan areas.  If you’re interested, you can view the rankings of the top 366 metropolitan areas here. There are a few interesting observations:

(1) Dallas has surpassed Philadelphia as the 4th largest metro area in the US.

(2) Houston was the 6th largest metro area as of 2010.  In all likelihood, it has now surpassed Philadelphia for the #5 spot.

(3) The fastest growing major metro areas in the US over the past decade are Raleigh-Durham, Austin, and Las Vegas. The growth of the latter has probably slowed significantly in the past few years, however. As for Raleigh and Austin, their growth is more predicated on being major technology centers with some of the best universities in the United States.  It’s likely that they will continue to grow.

(4) Atlanta is now significantly larger than Boston.  (This is somewhat surprising to me as an Atlantan.)

Why Do Houston and Dallas Continue to Grow?

Moving forward, Dallas and Houston will probably continue to grow more rapidly than the rest of the nation.  You’ll hear a lot of reasons as to why.  Certainly, part of the success in both cities in related to the growth of the US oil / gas industry over the past half-decade. While energy is an important part of both cities’ economies, it would be a mistake to overlook deeper reasons for their success. Both Dallas and Houston have diversified economies, so even with an energy downturn, the cities could still continue to experience healthy growth.

Texas certainly has a lower tax and regulatory burden than many US states.  It lacks some of the financial and budgetary issues, as well.  In fact, Texas was harmed much less by the financial crisis than the rest of the nation.  But while all this is true, it still only explains so much.

The biggest reason for the success of Dallas and Houston is best explained in economist Edward Glaeser’s work Triumph of the City.  Glaeser is an unabashed proponent of dense urban development and praises cities as “the healthiest, greenest, and richest places to live.”  While Glaesar speaks glowingly of densely populated cities, you might think his work would extoll praise for New York, Boston, or San Francisco.  Instead, Glaeser holds up Houston as the model for urban development.

Why makes Houston different?  A lack of housing development restrictions.

Houston was founded by real estate developers and carried with it a philosophy of minimizing burdens for those who wished to build.  Conversely, cities like New York and San Francisco have shifted towards restrictions that greatly limit development.  While it may seem counter-intuitive to suggest that Houston’s policies promote upward development moreso than New York’s, remember that much of Manhattan’s rapid upward development came in the early 20th Century, before the Great Depression.  After that, New York retreated toward policies of “neighborhood preservation”, high-rise restrictions, rent controls, and difficult development requirements.

The end result is that cities like New York and San Francisco are unable to meet their demand for housing, which creates massive upward price pressures.  These pricing pressures are bad for businesses, as well, since it means they have higher costs and become less competitive.  And let’s not forget, real estate is one of the most significant costs for most major American companies.

As an example, for a luxury high-rise rental that you would cost $8,000 per month in Manhattan and $10,000+ per month in San Fran, you could probably find a similar property in Houston for $3,000 per month.  Of course, it’s the lower- and middle- segments of the scale that are more important to economic growth, but that’s a dramatic display of how Houston’s policies allow for it to produce things at a lower cost. If you can provide housing at a lower cost, then you can pass the savings onto businesses, who are able to pay lower nominal wages, but higher real wages.

In other words, Houston’s development policies provide every single company that operates within a competitive advantage.  This is the secret to the rapid growth of Houston and Dallas.  If more major American cities emulated Houston’s hands-off development policies, the American economy would be more competitive; and we’d help solve many of our other issues in the process, including environmental degradation and excess energy usage.

Of course, you’ll note that a lot of Houston and Dallas’ growth has been outward, not upward.  But don’t be surprised if that changes over the next few decades.  With less virgin land being available to developers, it’s likely that you’ll see more infill properties and denser development in both cities.  After all, most major cities have developed outwards first; before pushing upward.  Cities like Houston and Dallas seem to be increasingly moving towards that next stage, which makes them very fascinating.

34 Comments – Post Your Own

#1) On February 20, 2012 at 1:19 PM, Turfscape (39.70) wrote:

While I'm no fan of restrictive legislation that unduly inhibits development...I fear a future where more cities are like Houston. That place is the armpit of America.

Just my own, personal, totally unqualified opinion. And worth exactly what you're paying for it.

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#2) On February 20, 2012 at 1:31 PM, JakilaTheHun (99.93) wrote:

Turfscape,

A lot of people say that about Houston.  But a lot of people would've said that about New York at one time. 

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#3) On February 20, 2012 at 1:59 PM, outoffocus (23.33) wrote:

As someone who lives in the Philly metro area, I think real estate development is the least of Philly's problems.  Philly has no problem developing real estate.  Their problem is more from a cost-benefit standpoint.  Taxes are high and numerous in Philadelphia. Also Philly's tax system discourages the development of small business and encourages the development of non-profits.  In return for high business taxes you have a weak police force, corrupt government, high crime, and crappy schools.  Unless you are making alot of money from the Philly market, there is no real incentive to live there.  As a small business owner, I refuse to move back there. The burbs are just fine for me.  But when I hear people around saying they want to relocate I cant say I blame them.

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#4) On February 20, 2012 at 2:08 PM, JakilaTheHun (99.93) wrote:

Philly has no problem developing real estate.  Their problem is more from a cost-benefit standpoint.  Taxes are high and numerous in Philadelphia. Also Philly's tax system discourages the development of small business and encourages the development of non-profits.  In return for high business taxes you have a weak police force, corrupt government, high crime, and crappy schools.  Unless you are making alot of money from the Philly market, there is no real incentive to live there.

I can't disagree with you there, outoffocus. My point was more about the success of Houston and Dallas over other cities. 

Philadelphia has some of the most punitive taxes in the nation.  I know I've considered looking for jobs there before, and I realized that living in the city would be foolish, given the huge tax burden.  I would've had to have lived in the suburbs, which was a huge drawback for me, because I like the city.

But I think real estate costs play an even bigger role than taxes in most locales. Yet, we hear a lot of about taxes and very little about real estate development restrictions. 

As another example of this in action, I briefly mentioned that the financial crisis didn't hit Texas nearly as hard.  Well, one reason for that is because supply shortages are more likely to lead to volatile prices.  Houston and Dallas' development policies have helped get supply into the market and have reduced volatility in prices.  So when the financial crisis hit, it never hit them nearly as hard. 

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#5) On February 20, 2012 at 2:39 PM, Turfscape (39.70) wrote:

>>A lot of people say that about Houston.  But a lot of people would've said that about New York at one time.<<

Very true. Very true.

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#6) On February 20, 2012 at 8:09 PM, HarryCaraysGhost (99.72) wrote:

Chicagos #1 in this stat-

http://content.usatoday.com/communities/ondeadline/post/2012/02/study-ranks-chicago-as-nations-most-corrupt-region/1

So we got that going for us...

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#7) On February 20, 2012 at 8:11 PM, HarryCaraysGhost (99.72) wrote:

Chicago's #1 in this stat-

http://content.usatoday.com/communities/ondeadline/post/2012/02/study-ranks-chicago-as-nations-most-corrupt-region/1

So we got that going for us....

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#8) On February 20, 2012 at 8:28 PM, HarryCaraysGhost (99.72) wrote:

Ugh!!!! sorry for the double post.

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#9) On February 20, 2012 at 10:05 PM, Eudemonic (63.12) wrote:

My understanding of Houston, which helps explains Houston's success, is that the limited or no zoning regulations means that a Houston home-owner could have a Harley repair shop and a dog-kennel owner for neighbors. Is that a fair assessment?

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#10) On February 20, 2012 at 10:44 PM, unsavyinvestor (< 20) wrote:

My understanding of Houston, which helps explains Houston's success, is that the limited or no zoning regulations means that a Houston home-owner could have a Harley repair shop and a dog-kennel owner for neighbors. Is that a fair assessment?

 

not exactly like that our neighborhoods still have covenants. However if you lease a building you may open any business that you wish without going through the zoning processes required of other cities with the exception of illicit book stores and things of that nature. 

 

 

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#11) On February 21, 2012 at 12:10 AM, devoish (98.05) wrote:

I think the land in Texas is cheap because there is a lot of it vs the population size. If it ever gets more valuable, people will protect it through zoning. The restriction on growth in Texas will be its water supply and cost. Despite all our regulations and zoning burdensome Gov't on long Island we have cheap clean water. Or maybe because of all that stuff. Cheaper water than unzoned deregulated Texas has.

I think your article incorrectly ignores the most significant issues and elevates zoning to a level it has not earned.

The article grabs two recent boom towns in the USA for its example and ignores the booms in overregulated California that beat less regulated dallas and houston a decade ago. It also ignores the dozens of citys growing faster in overregulated States.

Percentage growth in Florida killed Texas with communitys so overregulated they have little neighborhood zoning boards concerned with picking up dog poo and lawn decorations.

Zoning is a tool people use to get along with each other without fighting. Good fences make good neighbors as the saying goes. Sometimes zoning is abused to help rich folks steal, sometimes it is abused for racist purposes, but people acknowledge those things, and work on correcting them.

Zoning increases the value of land because a nice place to live stays a nice place to live. People do not look at a neighborhood zoned with no industry and say "I don't want to live there". They say "yes, thats worth working for and paying for and fighting to keep". The residential money goes where the smokestack doesn't.

Best wishes,

Steven 

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#12) On February 21, 2012 at 7:14 AM, JakilaTheHun (99.93) wrote:

My understanding of Houston, which helps explains Houston's success, is that the limited or no zoning regulations means that a Houston home-owner could have a Harley repair shop and a dog-kennel owner for neighbors. Is that a fair assessment?

Not really.  A lot of people initially think that happens, as did I, but when I started reading about it, I realized otherwise.  And it makes sense actually.

Why would a Harley repair shop set up next to a home?  Or as another example, why would a junkyard set up next to a large residential neighborhood?   Even in the unlikely event that either wanted, for some reason, to locate near a neighborhood, it's likely the neighborhood homeowners would buy up the property and prevent that from happening. 

People naturally tend to zone themselves.  A junkyard owner isn't going to set up next to a big residential neighborhood because (a) the land is going to be too expensive, (b) it's going to be more trouble than it's worth [there are still ordinances that protect peace and quiet and they'd have to deal with constant complaints, which are a "cost" in a sense], and (c) there's not a huge benefit to setting up next to a neighborhood. 

My take is that 'zoning ordinances' took our natural processes and turned them into law; but once you turn it into law, you limit flexibility, and you give some people political power that exceeds their true support.  So a small minority tries to block a high-rise because it 'obstructs their view'; even though the high-rise results in higher property values and more efficient property usage.

Here's a few interesting articles on how the lack of zoning works in practice:

http://www.businessweek.com/the_thread/hotproperty/archives/2007/10/how_houston_gets_along_without_zoning.html

 http://www.slate.com/blogs/moneybox/2011/11/30/the_myth_of_zoning_free_houston.html

 

There's a very interesting mix of people who have strongly supported Houston's lack of zoning regulations.  The inner-city poor and minorities have tended to support it because it helps provide affordable housing to them.  Real estate developers tend to oppose it for obvious reasons. 

The interest groups that typically support zoning are strong homeowners' associations that want more political clout.  But I'll admit, I find these groups very destructive and that they often deter ideal property usages.  Here in Atlanta, one particularly powerful HOA has held up development in an entire part of town, near Emory University, so rental prices in that area are sky-high; sometimes even higher than the valuable mid-town real estate prices (which seems bizarre; but it's all about lack of supply). 

My take is why should inner-city property go to waste, just becuase some people who don't even own the property object?  If they truly object that much, they should buy the property, rather than using the poliitcal system to get their way. 

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#13) On February 21, 2012 at 11:43 AM, JakilaTheHun (99.93) wrote:

Real estate developers tend to oppose it for obvious reasons.

That should read "tend to support [the lack of zoning]"

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#14) On February 21, 2012 at 11:45 AM, Jbay76 (< 20) wrote:

Houston and Dallas continue to grow becuase of Big Oil's presence there.  You take that industry to another state or location and you'll see Houston and Dallas shrink.  Plain and simple.  Everything else are artifacts.  The amount of money that industry brings in, especially for Houston, is staggering...think housing boom for Orange County, SoCal or CA in general.  If Big Oil moved,  the consequnces would be very similar.

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#15) On February 21, 2012 at 9:18 PM, Option1307 (29.96) wrote:

Good stuff, +1.

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#16) On February 21, 2012 at 9:34 PM, devoish (98.05) wrote:

Why would a Harley repair shop set up next to a home?  Or as another example, why would a junkyard set up next to a large residential neighborhood?   Even in the unlikely event that either wanted, for some reason, to locate near a neighborhood, it's likely the neighborhood homeowners would buy up the property and prevent that from happening. 

People naturally tend to zone themselves.  A junkyard owner isn't going to set up next to a big residential neighborhood because (a) the land is going to be too expensive, (b) it's going to be more trouble than it's worth [there are still ordinances that protect peace and quiet and they'd have to deal with constant complaints, which are a "cost" in a sense], and (c) there's not a huge benefit to setting up next to a neighborhood.   - Jakila

 

What is unique about Houston is that the separation of land uses is impelled by economic forces rather than mandatory zoning. While it is theoretically possible for a petrochemical refinery to locate next to a housing development, it is unlikely that profit-maximizing real-estate developers will allow this to happen. Developers employ widespread private covenants and deed restrictions, which serve a comparable role as zoning.- 

Investment Research Quarterly, a publication of CB Richard Ellis Investors LLC.

 

Google maps says these observations are not accurate at all.

Galena Park middle school and the surrounding area pretty clearly say that whatever the cause, zoning, not zoning, or flying pig magic, harley shops and junkyards are certainly next door to residences and proliferating in residential neighborhoods, and neighborhoods are indeed built right next to petrochemical facilitys.

In fact, any self respecting man would observe the condition of neighborhoods and the extraordinary closeness and proliferation of junkyards in residential neighborhoods, and ask to whose benefit and under what principles were private property values destroyed.

Best wishes,

Steven 

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#17) On February 21, 2012 at 11:33 PM, Melaschasm (52.35) wrote:

Devoish, that is a good chicken or egg question, which I can not answer.  I can provide an example from near where I grew up.

A long time ago there were a bunch of farms and a little village (much like little house on the praire).  Then one farm was bought, and a big tannery was built there.  On some nearby farms a small factory was built to produce related goods.

This created many jobs for people who were not farmers.  So some of the nearby farmland was converted into residential property for the workers.  

Fast forward 50 years, and the residents of this moderately expensive suburb no longer wanted the stench of a tannery in their town.  After some political bickering and threats of lawsuits, the tannery was replaced by one in China, where they actually wanted the jobs.

Bringing it back to Houston, did the residents move next to the businesses, or did the businesses move next to the residents?

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#18) On February 22, 2012 at 12:45 PM, devoish (98.05) wrote:

Melaschasm,

Whatever happened first is not significant to understanding that the evidence that Jakila and CB Richard Ellis entered into the discussion runs counter to what my own eyes tell me.

Whatever happened first is only significant in terms of whether or not what happened is right or wrong and to whom it was right or wrong.

Much like where you grew up I would expect that at one time the Port of Houston was much smaller, and was a working port surrounded by farmland to make the port useful and residences for the people who worked at that port. 

I would also expect that over time the industrial portion expanded outward until it arrived at the residential areas, at which time the investors in the "oil industry" realized opportunity but the earlier investors in "residences" saw the value of their largest investments destroyed.

Once the value of the propertys as residences was destroyed by the loss of the view of the river, the smell of production, the noise and lights night and day etc. Once the residential value is lost a lack of zoning might allow some of the residents to recover a portion of what they lost by opening small business's in their homes. But that only helps some, and overall it is a loss for the ones who are there, and an opportunity for those who grab the cheapened properties later.

Typically, residential investors are not compensated enough to get out from under their mortgages and move. They lose.

Or maybe they were offered compensation. Maybe the company that built the storage facility and destroyed their view and residential property values offered to pay off the mortgages of every residence that would be adversely impacted by their presence.

But that is not typical, especially without the added power of zoning laws on the side of small residential investor to combine their ability to fight a much larger foe.

What is fair in that resolution is one thing. 

Come to my face and tell me that Houston zoning prevented something from happening that I can see happened in the first and second places I chanced to look, and you have one chance to come back and say that Houston zoning didn't do what you thought it did as well as you thought it did.

Come to my face with falsified evidence to support your anti Gov't zoning case arguments and all I am wondering is why you don't tell the truth. Whose wealth are you trying to justify stealing?

Thats how I feel about the content of this post. 

Best wishes,

Steven 

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#19) On February 22, 2012 at 8:05 PM, rfaramir (29.47) wrote:

"Whatever happened first is only significant in terms of whether or not what happened is right or wrong and to whom it was right or wrong."

Excuse me, but what is right and what is wrong is paramount.

"Or maybe they were offered compensation"

Of course they were offered compensation. It is called "buying the property" from them. You know, a free market, voluntary transaction, which does not occur unless both sides agree because both sides benefit more than if the transaction does not take place.

The homeowners or residential housing speculators found that the land was worth more to the oil company than to themselves, so they made a tidy profit by selling to the entity that had a more productive use for the land than they did. That's how land and capital changes hands. Those who can make more money with it have the purchasing power to buy it from those who make little use of it. This is the free market participants (us consumers) signalling through the price of oil, globally, and the price of land, locally, which use of particular piece of land will best pleases us.

This is a good thing. The customer is always right. No one is forced to do anything. Initiate force and all morality is forfeited. (Forced zoning, forced sales, forcing serfs to stay and work land instead of leave; all are wrong.)

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#20) On February 23, 2012 at 2:23 PM, devoish (98.05) wrote:

rfaramir.

We have two issues here. The first is the attempt to tell me that not having zoning is a good thing because it prevented something bad from occuring, even though that bad thing did, in fact, occur.

The other issue is the "right or wrong" of it. Not to the landowner who sold to the oil storage facility, because they probably had a mutually agreed upon contract. We don't know that the oil company didn't threaten to ruin the landowner by having thugs throw his wheat crop into the ocean but rather than go into that flaw of free market theory that always assumes a mutually agreed upon contract lets just say that in this case they did have one.

The "zoning" right or wrong in question is the impact of the contract between the landowner and the oil company affecting something the neighboring properties have, without compensating them for their loss. And those are real things with real value to a residential investor. It is the quiet, the light traffic, the clear air, the view of the river, the cleanliness of the river, the night sky, a public school, etc. All of those things that impact the value of a property, that are not on or directly above or below a property.

In Houston, in the Galena Park neighborhood, they bought and built homes that had clean air, stars at night, a view of the river etc, and they paid more for those things because they wanted those things. Then a property owner between them and the river sold his land to the oil storage facility, and those things were lost to them. The value of their property plummeted because most residential buyers do not want to live next to an oil storage facility.

Free market theory says to them "to bad, you have no say in this". Their contract with their city says to them "to bad, we have no zoning, you have no say in this". And so it is in Houston, they have no right to influence what impacts them. 

I don't live in Houston. Where I live there are zoning laws. So when I buy property, underlying the contract between me and the person I am buying from is the contract he has with the town. That contract is described as zoning laws. The property I am buying is prevented by the zoning contract from putting in a boob bar. The person I am buying from is committed to that contract, the neighbor across the street is, and when I buy it is part of my contract too. A dentists office maybe, yes allowed, bright lights, loud music, and fights all night, not allowed. 

But maybe you really want to put in a boob bar. Maybe you are willing to pay up to persuade me to sell my contractual right under the zoning laws to restrict what you can do to impact my property values.

If you wanted a dentist office, and a bigger driveway for parking, I might not even care. But if you want to put in a boob bar, keep me up all night, invite drunks to drive past my car, and act the way drunks tend to act, thats going to be more expensive. My house is worth .5mil right now. After you are there it is worth, at most 1/4 of that. You are going to make up the difference before I'll surrender the zoning rights I paid for when I bought my house.

I am not Tea Party stupid. I am not trading the ability to protect a $500,000 dollar investment for "freedom" from that ability. And if there is anything that deregulation/republicansconservativeteapartylibertarians have taught me it is when they are selling me "free market theory" it is because they don't want to pay cash.

But CB Richard Ellis has changed my attitude. He tried to lie to  me in order to get me to sell my property cheap, and now I don't just want to be compensated for financial losses or the cost of moving. I want him to be punished for trying to cheat me. Someone looking to buy a residence will pay me fair value. He has to pay more.

Get it? This is not about the contract between the oil company and the landowner. This is about the property rights conferred on properties by zoning laws and an attempt to get idiots to surrender them for nothing.

Hopefully Galena Park Houston homebuyers understood that they had no protection from what happened to them, and did not pay up for something they were not getting. 

Best wishes,

Steven 

For bonus points we can guess why this subject is suddenly brought up today. 

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#21) On February 24, 2012 at 5:40 PM, rfaramir (29.47) wrote:

"Zoning is a tool people use to get along with each other without fighting."

No. Zoning is Theft. You may be thinking of covenants, like unsavyinvestor said of Houston: "our neighborhoods still have covenants"

"Zoning increases the value of land"

No, it reduces the value of the land, since it restricts what uses can be made of it. If the best use fits the zone, then no change is made, but if the best use does not, then the zone has destroyed value by preventing the best use. Zoning Laws Destroy Communities

"neighborhoods are indeed built right next to petrochemical facilitys"

Then, unlike your preferences, neighborhoods are needed near petrochemical facilities. The lower classes, perhaps the very ones working in said facilities, need affordable and convenient housing, too. Most affordable housing in the Houston area is NOT convenient to said facilities, since they are very distant from them. But a neighborhood very close to such facilities are by their very closeness, less desirable by those who can afford to pay more for less smelly air, leaving said neighborhoods in the price range of the workers who are obviously not too opposed to the smell.

I won't defend a city government of any kind (in other ways they use plenty of initiated or threatened force), but I will say that in this they are better than most. Houston is no 'free society', but what might one look like?

How Zoning Rules Would Work in a Free Society

The key is private property rights. A factory producing new smells and obscuring previous pretty views is INFRINGING on the neighboring property owners' rights. In a free society where property is respected, such residential owners could get a judgement against such a factory owner for this infringement. This rarely happens in US courts since the Progressive movement in the 1870s, since the State religion became Progress, which trumps private property. Prior to that, you'll find that courts DID uphold the rights of farmers whose crops were burned by sparks thrown by passing trains, and sided with residential landowners who were inundated by new factories' smokestacks. No longer. Government collusion is now the main facilitator of pollution. (Visit the former Soviet Union and have a look.) Pollution is just one case where property rights work to settle disputes, but the State intervenes on the side of the aggressor to our detriment.

Devoish, I'm sorry to hear of your half-mil house losing so much value due to a noisy neighbor. If we lived in a libertarian paradise it wouldn't have happened. It saddens me to see you hurt by the State zoners allowing such a bar to be built next to you, no matter your wishes, followed by the State judge not allowing you to sue for noise pollution (and other aggressions by their drunks). It's no wonder that no judge will side with you against the zoners (or those complying with the zoners), since the two work for the same mob and therefore have an inherent conflict of interest. Ideally, you'd have access to a disinterested arbitrator. In a nasty state of mind I might be tempted to say that a statist deserves to live in his self-spoiled nest, but I am (I hope) more humane than that, especially since I live in the same country as you, and it's my nest, too. So I won't say it. I'm wholeheartedly on your side, and I hope it gets resolved to your satisfaction. Lying and cheating in particular are equivalent to aggressive force and are disallowed by the Zero Aggression Principle that anarcho-capitalists follow. I, too, want your oppressor punished for cheating you.

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#22) On February 24, 2012 at 5:57 PM, DJDynamicNC (27.84) wrote:

"If we lived in a libertarian paradise it wouldn't have happened"

Well, that's the claim.

There is zero empirical evidence to back that claim, however. Just speculation and rumination.

Entertaining speculation, to be sure, and I enjoy the sparring, but speculation nonetheless.

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#23) On February 24, 2012 at 6:01 PM, Turfscape (39.70) wrote:

>>If we lived in a libertarian paradise it wouldn't have happened.<<

The same could be said of any social philosophy. If we lived in a communist paradise it wouldn't have happened. If we lived in a socialist paradise...

That's sort of the whole idea of paradise, isn't it? It's a situation in which everything works exactly according to plan? The problem is that paradise doesn't exists, libertarian or otherwise.

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#24) On February 24, 2012 at 6:36 PM, Borbality (48.14) wrote:

 Yeah but people have to want to live there in the first place -- for reasons other than the funny business going on before the housing crash. Just look at parts of California and the Southwest. They had no problem building!  Local governments approved everything, and construction / real estate / etc was one of our only industries. 

 I'm not saying that the crisis would have been averted if there were more development restrictions, I just think more is happening in Dallas and Houston than hands-off development.  

 Housing price trends in those Texas markets are pretty fascinating though, because it's still a growth area but was not hit hard. Places like DC and NYC weren't hit hard either, but they're high-demand, low-growth populations.  Texas is a whole different thing.

Hands-off development policies have exacerbated the problem in much of the southwest. Now new buyers get their pick of the nicest, newest homes that no one can sell, in the nice school districts of course, further screwing up any hopes of urbanization.

I love your posts, and maybe this is way over my head, but I'm just not seeing it. Something much bigger is happening in Texas for it to be affected/not affected this way.

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#25) On February 24, 2012 at 7:42 PM, JakilaTheHun (99.93) wrote:

Just look at parts of California and the Southwest. They had no problem building!  Local governments approved everything, and construction / real estate / etc was one of our only industries.

You're assuming that because a lot of building was happening, that restrictions weren't high.  In fact, restrictions in California are high.  So what tends to happen is people are less likely to build infill properties in existing developments, and instead create more sprawling developments by building on unused land. 

This creates more supply, but the supply isn't really all that well matched to the demand.  Building 10 high rises in San Francisco would do more to alleviate Bay Area prices, than building 1000 single-family homes near Hayward, CA. But only the latter tends to happen because of CA's restrictive development policies. 

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#26) On February 24, 2012 at 7:44 PM, Borbality (48.14) wrote:

Thanks for clearing that up. Makes sense.

 

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#27) On February 24, 2012 at 7:46 PM, JakilaTheHun (99.93) wrote:

Also, you can see cold, hard evidence that Houston almost entirely avoided the housing recession.  Dallas didn't suffer much either; not even during the height of the crisis.  You can't say this for any major metro area outside of Texas; so it's not just oil (there are other states that depend on oil). 

The difference in Texas is that the more liberal development policies allow supply to more closely match demand.  As a result, supply shortages are rarer, so prices are less likely to spike upwards. 

It's very obvious this is happening from studying the city housing data. Which is what led me to believe that Houston's particular blend of development policies is creating more desirable outcomes. 

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#28) On February 24, 2012 at 7:58 PM, rfaramir (29.47) wrote:

Figures that people would pick up on this statement and dismiss the rest: "If we lived in a libertarian paradise it wouldn't have happened"

Better wording: "If your neighbor had respected your property rights, this would not have happened. Failing that, if you had access to an impartial arbitrator who would have validated your property rights, this would have been corrected after it happened. But instead, since the State protects aggressors with zoning laws and fails to dispense justice in its courts, your property rights failed to be respected. You can clearly see that real life in these United States is not a libertarian paradise. Please stop arguing for less liberty and more statist oppression."

Better?

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#29) On February 24, 2012 at 8:50 PM, bordereiver (< 20) wrote:

I have lived much of my life in Houston, and the parts I lived in were not "armpits."  For middle class people it is a very affordable place, with very good public schools.  It is not much to look at - no tourist needs to come to Houston. But if you want a job, a good job, and affordable housing, it is a very "convenient" place to live and work.  I use that word because my Asian wife was not excited about moving to Houston when my job location changed, and had been told by many in Asia she would not like it.  Since she was from SE Asia the heat and humidity didn't bother her, and after she lived there for 5 years she really liked it.  Convenient, affordable. 

We are back in Asia now, in Shanghai, after living in Hong Kong and Singapore, but will be heading back later this year to Houston.  And my wife is happy to be going back.  

When we want to see pretty stuff, the Hill Country - Austin, San Antonio - are only a few hours away.

So don't come to Houston if you don't want good paying jobs and affordable housing. 

 

 

 

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#30) On February 25, 2012 at 8:55 PM, devoish (98.05) wrote:

DJDynamicNC,

Yes that was the claim he made. He doubled down on the lie.

Jakila, 

Do you want to buy my zoning away from me Jakila? Right now it makes my house more valuable to me. Free markets and all. Your theorys are nice, but theorys don't buy my house.

I see you aren't talking about the claim that having no zoning prevented residential neighborhoods from having oil processors right next to them.

You used up your one chance to say that not having zoning didn't do what you climed it did. You have forfeited the expectation that I will assume you are mistaken.

Keep not talking about it and the price for my house, with its zoning keeps going up for you. $650k now, up from half a million. Zoning says 35' maximum height so you get to own your view past the neighbor, not him.

Best wishes 

Steven

PS still want to guess why this is coming up now? Anyone want to venture the idea that some fracking gas company wants your rights for nothing? 

Grab your wallets folks, the free market is coming. 

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#31) On February 26, 2012 at 8:09 AM, JakilaTheHun (99.93) wrote:

Devoish,

There's a reason I generally don't argue with you much, and it's because it's like talking to Bill Lumbergh from Office Space.

I'm not even sure what you are arguing about or why you are directing it at me.  My argument is that land uses end up being about the same with zoning or without it.  All zoning does is provides arbitrary political power to certain landowners, who essentially get more voting rights than their "1 vote" would normally allow. 

It can also unfairly enrich certain parties, since they can block development and drive up their own property values in the process.  In essence, zoning promotes inequality of rights. 

You seem to be arguing that zoning is making your property more valuable, which I wouldn't disagree with.  It's making you richer, while making non-landowners who need housing poorer. You are getting rich by stealing from other people, more or less.

But hey, you can't afford to tip your Starbucks barrista a little bit more with all this wealth you acquired for free.   

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#32) On February 26, 2012 at 9:29 AM, devoish (98.05) wrote:

Jakila,

Wilfull ignorance does not enhance your arguments. Neither does typing.

 My argument is that land uses end up being about the same with zoning or without it - Jakila

 You seem to be arguing that zoning is making your property more valuable, which I wouldn't disagree with - Jakila, 2 seconds later.

$700,000.

Best wishes,

Steven 

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#33) On February 26, 2012 at 10:41 AM, JakilaTheHun (99.93) wrote:

Devoish,

As I said, arguing with you is like arguing with Bill Lumbergh.

When I say, "I got the memo", you tell me "I'll go ahead and send you another memo."  You don't actually respond to the arguments put before you.  Nor do you make any reasonable effort to understand them.  You merely respond back with your recycled spiel that you pre-decided was the correct answer. 


You make this out like it's a very black-and-white issue.  It's not. 

In NYC, zoning doesn't change land uses much.  [X neighborhood] would be residential whether there's zoning or not.  What zoning can do, however, is limit certain types of residential development.  For instance, [Y property owner] decides she doesn't want a high-rise next to her.  Less supply results in higher property prices, but it probably doesn't radically transform the land use, because the land is being used for residential with or without the zoning. 

 

You are the ultimate hypocrite here.  You are bragging about how you profit off of zoning, but then you pretend to speak for the poor. In reality, your actions are causing hardships for the poor, who now have to pay landowners like you more rent to survive. Stop pretending you care about the poor --- you've made it abundantly clear that you care about your own self-interest and that you prefer to use the power of government to enrich yourself at the expense of the poor. 

I'm done with you.  No reason to argue with a brick wall. 

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#34) On February 26, 2012 at 2:54 PM, devoish (98.05) wrote:

 In NYC, zoning doesn't change land uses much.  [X neighborhood] would be residential whether there's zoning or not.  What zoning can do, however, is limit certain types of residential development - Jakila

Jakila,

You are the one that chose to attack zoning as a "black and white" issue in the original post. It is arguing when you are wrong that makes it feel like you are up against a brick wall.

The zoning did change the land use. In Houston - without zoning - in the two neighborhoods I mentioned every other house is a business, they are not all not all residences. Unlike the neighborhood you just described in NYC.

Read this slowly. The facts do not support your arguments.

Now read it again.

You told us to read CBRichard Ellis who said that not zoning land will prevent  oil refineries from being built next to residential neighborhoods. I showed you neighborhoods in unzoned Houston with refineries next to them.

Read this slowly. The facts do not support CBRichardEllis or you.

Now read it again.

Of course, it’s the lower- and middle- segments of the scale that are more important to economic growth, but that’s a dramatic display of how Houston’s policies allow for it to produce things at a lower cost. If you can provide housing at a lower cost, then you can pass the savings onto businesses, who are able to pay lower nominal wages, but higher real wages - Jakila

 People naturally tend to zone themselves.  A junkyard owner isn't going to set up next to a big residential neighborhood because (a) the land is going to be too expensive, - Jakila

Lower cost and too expensive. Neat trick that one.

What you really ought to do is simply acknowledge that the facts you presented did not support your arguments against zoning.

 You make this out like it's a very black-and-white issue.  It's not. - Jakila

Since you have come to agreement with the grays I described in replies 11, 18 and 20 you should be nicer than to call me a hypocrite. You can apologise better than that.

I did not write a post extolling the virtues of zoning land. I am not trying to get unzoned residential land zoned for my personal gain or anyone elses. You came here extolling the virtues of not zoning land. You backed your argument with evidence that was demonstrably false and you have come around now to "not black and white" and called  me a hypocrite because I did not match the liberal do-gooder hippie fool stereotype you want me to fit into.

I am a financial conservative, and no Libertarian BS is going to sweet talk me out of my house. I'll "help the poor" in ways that I see fit, with laws and regulations that I approve of and believe are designed to promote economic equality not for someones gain at a neighborhoods expense.

In NY we can change our zoning to meet the changing needs of our communitys and business's. Usually we favor business and growth and let zoning restrictions go too cheap, but it is still better than the nothing we'd get without zoning in exchange for the degradation of our quality of life without zoning laws.

You don't know much about me at all. Because of zoning I had the choice to buy a higher priced home with no industry nearby, or a lower priced home with some light industry nearby, or an even lower priced home with heavy industry nearby. I could choose varying levels of population density. I made a free choice to buy the underlying value of the zoning regulations that I could afford, based on my finances and values. A lack of zoning is not freedom or valuable. It leaves but the one choice of no zoning, with the high risk of loss it carries.

I fixed cars for 30 years. I never once lied about somebodys car to get them to sell it to me or my friends cheap.

$800,000. 

Best wishes,

Steven 

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