Center for Houston’s Future 1200 Smith, Suite 1150 Houston, Texas 77002 www.centerforhoustonsfuture.org TO: Our Emerging Houston Region Panel Members I. Events leading up to the Our Emerging Houston Region Panel Forum During the last 7 years, the Houston-Galveston Area Council (“HGAC”), with the help of several other groups including one called Blueprint Houston (http://www.blueprinthouston.org/), successfully launched “Envision Houston Region” to support its federal transportation funding requests. That work, which included large public participation, community workshops and extensive media coverage looked seriously at the Houston Region’s crowded roadways lined by unattractive billboards and non-descript buildings, limited transportation alternatives, and suburban clutter. One result of the effort is significant support for improved regional transportation programs. Members of the Center for Houston’s Future (CHF) recognized that Envision Houston Region could serve as a foundation for a much broader discussion of regional public policy to address issues beyond transportation. These discussions include taking a sober look at the issues that affect our region -- air & water pollution, a high dropout rate in central city schools, aging refineries, diminishing open space, a lack of regional coordination and inconsistent development standards. As our regional population grows by one million people each decade, and because current development practices will consume some 15,000 acres of land a year, we must encourage public policy that will support the region’s great assets and also enhance areas of shortcomings. The substantial growth of the Houston region – in every geographic direction – is causing local governments and private/civic organizations to realize that the environmental infrastructure throughout the Houston Region is rapidly changing, and addressing regional issues are becoming critical in the areas of transportation, cleaner air, cleaner water and an adequate water supply. The main objective of the CHF’s RG&D panel discussion is to “build on the initial effort of Envision Houston Region through development of guiding principles and policy initiatives that encourage public policy decisions and private investments within the region to enhance our competitive future.” In doing so, we must recognize and honor the unique assets and successful conditions within our region -- including the world center for energy technology, 2nd largest seaport in the U.S., the space program, world’s largest medical center, a productive diverse workforce, a downtown with architecturally attractive buildings (thanks to Gerald Hines, 1 Philip Johnson and others), and many entrepreneurial opportunities for individuals to succeed. Moving forward requires more than just a report to be reviewed and filed away; it must be a continuing, dynamic effort to address change on a regional level. REFERENCE TABS:1 1. Envision Houston Region Report 2. CoH Urban Corridors Plan (January 2007) 3. The full-page ad in the Chronicle today by Blueprint Houston, el al, discussing the “Envision Houston” plan and related implementation 4. Transportation 2035 5. Houston “Area Plans” done early 2000s II. Sponsors of the ULI Forum Richard Everett ULI – Houston District Council Hines George Mitchell Central Houston Roger Galatas George Martinez III. About Houston The Houston region ranks as the world's 30th largest economy if it stood alone as a nation. Houston's economy has a broad industrial base in the energy, aeronautics, and technology industries. Only New York City is home to more Fortune 500 headquarters. Houston is the fourth most populous city in the nation (trailing only New York, Los Angeles and Chicago), and is the largest in the southern U.S. and Texas. The HoustonSugar Land-Baytown Metropolitan Statistical Area (Houston MSA) consists of 10 counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller. The size of this ten-county Houston region covers 8,778 square miles, larger than New Jersey. All references in blue are attached to this memorandum; all references in black are available upon request and during the Regional Growth & Development Panel Forum at djb@centerforhoustonsfuture.org 1 2 Houston tends to rank high in national surveys related to affordability and health care resources and low in areas related to aesthetics, recreational amenities, transportation and environmental sustainability, and health care access. This briefing book looks at the economic, social, historical, institutional, and geographical forces that have and are shaping the region with a particular focus on in infrastructure and development. The booklet concentrates on the following components of regional development: - Regional Economy - the growing diversity of the traditional business base (i.e. energy and related fields) and the expansion of the “new economy” - Community - the continued outward growth of neighborhoods and inward redevelopment and in-fill and efforts to build affordable housing - Environment – large-scale efforts to clean the air and the numerous waterways in the region and add more green space - Transportation and Infrastructure – Efforts to expand the roads and highways to keep up with growth, maintain aging infrastructure and find alternative multimodal networks (e.g. metro light-rail system and multi-use trails) - Government – finding additional ways to work on a regional scale on issues such as business development, infrastructure maintenance, environmental quality, funding for shared public improvements (e.g. parks, waterways, railroads, health facilities) This briefing booklet has four objectives: 1. To provide an overview of the economy and development of the 10-county Houston region resulting in a richer understanding of its dynamics and its components--both economic and geographic. 2. To place the 10-county Houston region in a national context by encouraging comparison with other urban regions. 3. To review the portrayals about the 10-county Houston region in order to independently assess and evaluate the scenarios and images that are shaping private and public action relating to development and infrastructure in the region. 4. To provide the opportunity to acquire skills in investigating the regional economy for purposes of analysis, public policy, and for direct action. The ultimate goal is to provide you with conceptual tools that will lead to a clearer understanding of the complexity of the regional economy and how it bears on issues of planning and economic development. The Houston Region is growing rapidly, largely as a result of its substantial and vibrant economic assets, including the Port of Houston, the Texas Medical Center, a diversifying 3 economy increasingly supplementing traditional oil and gas industries, and widespread residential and commercial development. Houston's goal is to be among the top ten regions in the world as a place to live, work and play. The guiding questions are: (1) For the expanding Houston region as a whole, what is working well with current growth patterns and what is not working well? More specifically, how does the Houston region compare in the functionality of its growth and development patterns to similar geographic regions around the country and the world, and what improvements or programs should be considered to enhance the region? Is the Houston Region growing in a way that will ensure that it is competitive with the most desirable regions in the world? (2) Given the large size of the Houston region and the numerous governmental jurisdictions within the region, how can the region better coordinate? More specifically, what approaches could the Houston region consider in promoting regional cooperation and coordination in the critical areas of transportation, flood control, clean air, wastewater treatment, supply of surface water, and regional parks and open space? (3) Which issues offer the most leverage and impact for shaping the future of the Houston region as economically competitive? Also, based upon your knowledge and experience, what issues/problems should the Houston region avoid in working on the effects of future growth? What has been most successful in other regions? (4) What approach should the Houston region take on regional transportation? More specifically, with the threat of diminishing funds to provide mobility improvements and with the reality of a rapidly growing population creating additional travel needs, what approach should the Houston Region consider to accommodate growth? (5) Please comment on the merits of a market-driven approach to improving development standards, modeled loosely on the LEED approach, provide a realistic opportunity for improved quality of life for the Houston region? More specifically, given the lack of regional planning and development standards, a unique voluntary effort is being considered and pursued by a group of leading community developers with support from CHF and the ULI Houston District Council. This market driven program called “Regional Leadership in Development Standards or “R-LIDS”) is conceptually modeled on the LEED approach and conceived to voluntarily impose, by covenant, a consistent set of development standards on each community development undertaken in the region. In addition to addressing quality within participating communities, a broader benefit could come from market and financial forces to cause improved development standards in “non-participating” projects. 4 Ultimately, we will seek to answer whether--and how--it is possible to harness the strengths and opportunities presented by the current status of development and growth in the 10-county region and create suggested action items that can be used to improve infrastructure and development in the region. Each section below discusses a component related to the Houston region’s development and is supported by the list of respective references. IV. Regional Economy - the growing diversity of the traditional business base (i.e. energy and related fields) and the expansion of the “new economy” A. What is the 10-county Houston region?2 In addition to 10-county governments and over 40 municipalities in the 10-county Houston region, there are also 44 Management Districts, 16 Tax increment Reinvestment Zones (TIRZ), 431 Utility Districts, 4 Community College Districts, 25 School Districts (ISDs) and 31 Emergency Service Districts. There are also 7 major master-planned communities in the region – including The Woodlands, Kingwood, First Colony (Sugar Land), Cinco Ranch (Katy), Clear Lake City, Silver Lake (Pearland), and South Shore Harbour (League City). All of these entities have an impact on growth, development, public services and infrastructure and the environment. These entities are autonomous and work separately from each other most of the time. REFERENCE TABS: 6. Map of 10-county MSA 7. Mayor White’s 2007 State of the City Address 8. Chronicle Opinion Article, Old Problem: Taming New Sprawl by Roger Galatas 9. Kotkin’s report and related editorials written thereafter 10. H-GAC Map of 13-county region 11. H-GAC Map of Land-Use for 13-county region B. Changes and Transformations in the Regional Economy: Deindustrialization, Reindustrialization, Recomposition of the Labor Force Employment: Annual average nonfarm payroll employment in the Houston MSA in 2006 rose by 97,400, or 4.1% to 2,446,000. Among the nation’s 367 MSAs, Houston ranked third in nominal job growth (4.0%) from December 2005 to December 2006. The Port of Houston ranks first in the United States in international waterborne tonnage handled and second in total cargo tonnage handled. It is the tenth largest port in the world. Other key business segments include petrochemical, health care, entrepreneurial enterprises, aerospace, alternative energy, biotechnology, education, information technology, nanotechnology and. All of these areas are expected to expand and enrich the current business climate in the region and attract new talent to develop the next phase of economic growth. Also, there is a growing economic impact from the Houston region’s involvement in the “Texas Triangle” which includes the metro areas of Austin, 2 The Houston-Sugar Land-Baytown Metropolitan Statistical Area (Houston MSA) consists of 10 counties: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller. The metro area’s mid-2006 population of 5,539,949 ranks sixth among U.S. metropolitan statistical areas. 5 Houston and San Antonio. Through expansive commercial and residential growth along the corridors that link these cities, the respective economies of these cities are beginning to merge and substantially compliment one another in some areas. Petrochemical — The Texas Gulf Coast has a crude operable capacity of 3.853 million Barrels of refined petroleum products per calendar day. This is 86.2 percent of the Texas total and 22.8 percent of the U.S. total. The Houston MSA has more than 380 chemical manufacturing establishments, with aggregate employment exceeding 34,200. The Houston-Gulf Coast region has nearly 40 percent of the nation’s base petrochemicals manufacturing capacity and dominates U.S. production of three major resins polyethylene (38.7 percent U.S. capacity); polypropylene (48.4 percent U.S. capacity); and polyvinyl chloride (35.9 percent U.S. capacity). Health care: There are a wealth of medical facilities in the Houston region, and many are located in the Texas Medical Center — the largest collection of health care facilities and academic medical institutions in the world with a local economic impact of $10 billion. The medical center serves more than 5 million patients each year and more than 52,000 people work within its facilities, which encompass 21 million square feet. Its three universities have research budgets totaling more than $600 million per year, including nationally recognized clinical research programs. And, there has been a recent expansion of high-technology research in areas such as the human genome project, biomedical imaging, nanotechnology, proton therapy, adult stem cell transplantation and transgenic murine models of human disease. Entrepreneurial Enterprises: Evidenced by more than 85,000 small businesses and fueled by a “can do” attitude of its business owners and inhabitants, entrepreneurs thrive in the region. A dynamic economy, well-developed information technology sector, talented workforce, business-friendly environment, low costs of living, ease of doing business and an outstanding quality of life create an environment supportive of new start ups. Entrepreneurs will help to build the regional economy. Higher Education: The Census Bureau’s 2004 American Community Survey showed that 29.0 percent of adults in our region have a bachelor’s degree or higher, versus 27.0 percent nationwide. Houston’s ability to retain and attract a well-educated and skilled workforce is directly linked to the intellectual and innovative talent working in the region. From Nobel laureate instructors at Rice University to three law schools and cutting-edge researchers at high-level institutions such as NASA’s Johnson Space Center, Texas Medical Center, and the James A. Baker III Institute for Public Policy. Housing: Houston’s cost of living is among the lowest in the nation – nine percent below the national average – primarily due to low, stable housing costs. The median price of a Houston home, approximately $140,000 is 17% below the national average. While the bubble has burst in other states, Houston has become the largest housing market in the United States, according to the U.S. Census Bureau. Builders started 9,725 single-family homes during the third quarter of 2007, a 27.7 percent drop from the same period in 2006, according to Metrostudy. Closings during the quarter fell 10.5 percent to 11,302 units. Meanwhile, a group of developers, realtors and home builders have recently formed an organization, Houstonians for Responsible Growth, to advocate for low regulation on development in order to keep housing prices low. 6 International population — More than 1 million Houstonians (more than one in five) are foreign-born. The steady rise in immigration supports Houston’s position as an international center. The region’s number of foreign-born almost doubled between 1990 and 2003. Major employers of the Houston area are international in scope. Employees of these companies are transferred internationally, bringing back with them knowledge and experience of competing abroad. International governmental representation — More than 80 nations have consular offices in the region, ranking the Houston Consular Corps among the nations largest. At least 42 foreign governments maintain trade and commercial offices here. Between 1992 and 2004, the number of consulates in Houston increased by almost 50 percent. Houston represents the third-largest consular corps in the United States, behind New York and Los Angeles. Green Economy – Private/Public Sector Initiatives LEEDS – Green Building - The City of Houston has put together the Mayor's Green Building Advisory Council in partnership with companies that have led the way in green building and achieved certification of their facilities according to LEED (Leadership in Energy and Environmental Design) green building rating standards. The objective of this group is to share experiences including cost/benefit business cases and key information with others to help accelerate green building across the city. Kirksey, leader in sustainable architecture and design, today has issued a challenge to employees and the community to encourage them to live a greener lifestyle. Developed by The Kirksey Center for Sustainable ArchitectureSM, The Kirksey Carbon Copy™ is a guidebook detailing this challenge and outlining simple measures for companies and individuals to undertake to reduce our collective carbon footprint. For further information, see www.kirkseychallenge.com. R-LIDS - Based on best management practices, R-LIDS seeks to develop and encourage minimum community development standards within the five (5) county Houston region. These voluntary standards, produced and initially funded by the development community, will be used to enhance quality of life and quality of place within the region through restrictive covenants, thoughtful planning and development agreements. The R-LIDS program promotes a whole-development approach by recognizing standards in seven key areas: (1) parks and open space requirements, (2) preservation of natural areas, (3) regional and community trails, (4) school site criteria, (5) architectural requirements, (6) signage, (7) homeowner and property owner associations and related policies. Many of the standards are compatible with the U.S. Green Building Council’s LEED green building program. REFERENCE TABS: 12. Dr. Klineberg’s Surveys – Houston and Region (Rice University) 13. Greater Houston Partnership Briefing Paper on Key Issues Facing the Houston Region (2005); Overview of the Houston LEED program 14. Federal Reserve Bank of Dallas, The Texas Triangle as Megalopolis, April 2004 7 15. Metrostudy: Houston Housing Market Remains Strong (July 2007); Chronicle articles on third quarter housing starts (November 2007) and new housing developer/builder organization (January 2008) C. Comparison with other growing regions Envision Central Texas – When the decision was made to develop a common vision for the Central Texas region, organizers placed an invitation to community, business and government leaders from Bastrop, Caldwell, Hays, Travis and Williamson Counties to attend a meeting to discuss how the planning process might work. At this meeting, an eight-person committee was appointed to establish a non-profit corporation, a governing Board of Directors and an Executive Committee. This original committee appealed to all aspects of diversity in forming the Board of Directors and Executive Committee. With a shared goal and a Board of Directors in place, Envision Central Texas sought a third-party consultant to manage the planning process - Fregonese Calthorpe Associates (FCA), a regional planning consulting firm based on the West coast. Envision Utah – In January 1997, the Envision Utah Public/Private Partnership was formed to guide the development of a broadly and publicly supported Quality Growth Strategy - a vision to protect Utah's environment, economic strength, and quality of life for generations to come. Five years of scenarios analysis, research and public involvement have helped Envision Utah bring the topic of planning and preparing for growth to the forefront of the public mind. With the help of thousands of Utah residents, Envision Utah has developed a Quality Growth Strategy that will help preserve critical lands, promote water conservation and clean air, improve our region-wide transportation systems, and provide housing options for all residents. Central Florida - MyRegion.org – a Regional Development Program to prepare the Central Florida Region to compete more effectively in the 21st century by enhancing “Conservation, Countryside, Centers and Corridors.” Southern California – the Regional Comprehensive Plan (RCP) presents a vision and solutions for how Southern California can balance resource conservation, economic vitality, and quality of life. The plan addresses 9 main areas: land use and housing; solid waste, energy, air quality, open space and habitat, economy, water, transportation and emergency preparedness. Draft Regional Comprehensive Plan, Nov. 1, 2007.Chicago Metropolis 2020 - In 1996, The Commercial Club of Chicago - a membership organization of leading area business and civic leaders - undertook the Metropolis Project, to look at the issues facing the region - Cook, DuPage, Lake, McHenry, Kane and Will counties. More than 200 members of The Commercial Club examined those issues in special committees organized around six areas: education, economic development, taxation, governance, transportation and land use and housing. The culmination of their two-year effort was a March 1999 report titled: "Chicago Metropolis 2020: Preparing Metropolitan Chicago for the 21st Century." A key recommendation of the report called for the creation of a new organization: Chicago Metropolis 2020. This new organization continues the process started by The Commercial Club and is implementing the ideas contained in the report. Chicago Metropolis 2020 has focused on creating collaborations with other organizations and is developing a new kind of "civic entrepreneurship," in the region. 8 Dubai - The Dubai Strategic Plan - 2015 (DSP), unveiled April of 2007 by Sheikh Mohammad bin Rashid Al Maktoum, UAE Prime Minister and Vice President, and Ruler of Dubai, is set to maintain double-digit economic growth, achieve a GDP of $108 billion and increase real per capita GDP to $44,000 by 2015. The plan, launched under the theme "Dubai: Where The Future Begins", sets out a strategic approach that focuses on developing the emirate's most dynamic economic sectors that have been the key contributors to Dubai's annual real GDP growth rate of 13% since 2000. Shanghai – ULI News Roundup, Sustainable Cities of the 21st Century (July 2007) III. Community - the continued outward growth of neighborhoods and inward redevelopment and in-fill and efforts to build affordable housing Inner City Growth - The use of state legislatively-mandated management districts (MDs) is a unique tool used mainly in the City of Houston and other large urban cities in Texas for inward redevelopment and in-fill. These MDs have board of directors that are approved by the City of Houston but in all other ways the MDs act separately from the City. They derive its funding from Tax Incentive Reinvestment Zones (TIRZ). The MDs work autonomously from each other and are not regionally-oriented but they have been very successful in providing “management plans” for their respective districts. Examples of these plans include the Greater East End MD; the Houston Downtown MD; Uptown MD and Westchase MD (See Reference Tab 16 below). The Houston Downtown MD plan includes: 9 Suburban Growth - The use of “special districts” to develop infrastructure for suburban development is another significant feature of the Houston development pattern. Historically, aquifers allowed developers access to potable water virtually everywhere in the Houston area. A developer with a large enough tract of land can petition for the creation of a municipal utility district (MUD), sink a well, put up a small sewage treatment plant, run lines and build streets and start building houses. Once enough homes had been built and sold, the developer would then apply for reimbursement for 70% of the cost of the water, sanitary sewer and drainage infrastructure that had been built and turned over to the MUD. The MUD then issued long term debt in the form of bonds to reimburse the developer. Eventually the developer builds out the land in the MUD, the MUD reimburses the developer, and the new home owners pay property taxes to the MUD to pay off the bonds issued for the construction of the utilities. Since a big part of the cost of developing the lot is now the responsibility of the MUD, home builders can offer lower prices for new homes. Home buyers pay higher property taxes, but seem to accept this trade off. Most new water and sewer infrastructure in the Houston ETJ is developed using MUD financing. Now, however, county water supplies and distribution are reaching critical levels because of subsidence and these MUDs are not as effective or desired. Nonetheless, there are hundreds of these districts in the Houston area, by far the majority of such districts in the state. When the City of Houston annexed a MUD in the past it was automatically absorbed by the City. The need to regionalize the isolated water and sewer system of an annexed MUD became a major cost to the City’s utility system. Efforts to regionalize MUD utility systems have met with limited success, except in master planned communities. The use of regionalized utilities in master planned communities made annexation easier for the City. REFERENCE TABS: 16. Management District Plans for East End MD; Central Houston MD; Uptown Houston and Westchase; HGAC map of wastewater treatment plants throughout the region 17. Renaissance 1960 Improvement Corporation, www.Renaissance1960.org 18. City of Manvel, Texas (Brazoria County), 2007 Comprehensive Plan 19. Information on Houston Hope Neighborhoods 20. Center’s Regional Strategies: A Toolkit for Cooperation among Governments 21. Map of Management Districts in Houston area IV. Environment – Regionalization is critical to the success of large-scale efforts to clean the air and the numerous waterways in the region and add more green space. Clean Air - Houston’s air quality problems are severe. While efforts to reduce emissions from local vehicles and industrial sources have resulted in reductions of many pollutants, levels of other pollutants appear to be rising. As both a major urban center and the largest petrochemical industrial complex in the United States, Houston faces major challenges in improving air quality. Every day, the five million residents of the greater Houston area drive over 100,000,000 miles.7 Houston has two of the four largest U.S. refineries and more than 400 chemical 10 manufacturing establishments. The petrochemical industry manufactures over 40% of the basic chemicals produced in the entire country. All levels of government are involved in policy development around air quality. In November of 2007, the Houston Regional Air Quality Task Force issued recommendations on air quality. City of Houston Mayor Bill White and mayors from other Harris County municipalities prompted the development of the Task Force, which was appointed by the Greater Houston Partnership. The task force is composed of a diverse group of eighteen business executives, economic development executive, community leaders, and environmental and health professionals. The goal is to identify effective regulatory mechanisms and voluntary initiatives that could help reduce air toxic emissions, as well as to make recommendations. Statewide, the Texas Commission on Environmental Quality (TCEQ) collects air quality data and has dedicated resources to reducing pollution levels. TCEQ works toward reducing ozone precursor pollutants by investing in technological research and development for advancing pollution control technology and improving the science for ozone modeling and analysis, among other areas. Water Quality - Houstonians know Buffalo Bayou as the waterway that runs through the heart of downtown. In the early 1900’s Houstonians swam in Buffalo Bayou, fished from its banks, and even drank the water. Buffalo Bayou meanders from the less-developed portions of Harris County to join White Oak Bayou in the highly urbanized central part of the Houston business district. Both bayous lie within the San Jacinto River Basin and eventually discharge to Galveston Bay. The Galveston Bay, with its enormous recreational and economic impact, is dependent on the water quality that enters the bay from the network of streams and bayous. Today, water quality testing has found very high bacteria concentrations in all major bayous in the five county region, posing a risk to people who swim or wade in them. Recent federal law requires local government to achieve fishable, swimmable and recreational water quality levels. While there is community discussion of the feasibility of these levels as to many streams in the region, significant interest exists among many community and bayou coalition groups to provide recreational and environmental use of most waterways. Millions of dollars have been spent improving the region’s bayous, creeks and tributaries, notably Buffalo Bayou in the downtown area, for recreational use and environmental use, making improvement of water quality to contact recreation standards desirable. Also, the City of Houston has spent more than $1 billion to expand and repair its sewerage system since the 1980s. Nonetheless, sources of bacteria currently found in the region’s waterways are mostly from the following sources: (1) aging wastewater treatment facilities by municipalities and MUDs, package plants and other system infrastructure; (2) bacteria from animal waste; (3) street runoff; (4) chemicals in the grass (such as fertilizers that drain into the water systems. Considered one of the most successful BMPs for the region, there are currently at least 12 “water quality filtering basins” in parks and open space along waterways in the 5-county region that substantially improve water quality for the targeted waterway. Art Storey Park is one such project that will help reduce bacteria levels along Buffalo Bayou for 11 water flow west of Beltway 8. Recent reports show a 400-600% reduction in bacteria levels when water is allowed to travel through these meandering wetland basins before being redirected into Brays Bayou. The Center for Houston’s Future is working with interested parties to try to provide federal funding for development of hundreds more of these filters within the next five years. REFERENCE TABS: 22. Center’s Indicators’ Report 23. GHP, Clearing the Air on Clean Air 24. Houston Chronicle, Houston mayor sets 6-month pollution deadline, Nov. 6, 2007 25. Partnership with Harris County Flood Control, City of Houston and TxDOT on water quality - http://www.cleanwaterclearchoice.org 26. Buffalo Bayou Partnership Master Plan http://www.buffalobayou.org 27. Center’s Parks & Open Space Task Force Report 28. Floodway map and impact on development 29. Houston Wilderness- Ecological map and data V. Transportation and Infrastructure – Efforts to expand the roads and highways to keep up with growth, maintain aging infrastructure and find alternative multi-modal networks (e.g. metro light-rail system and multi-use trails) – see Reference Tab 30. REFERENCE TABS: 30. White paper on transportation planning in Houston [By Dr. Carol Lewis] 31. 2007 Urban Mobility Report 32. Forbes.com, America’s Most Expensive Commutes, Aug. 8, 2007 33. Business Week, How Houston gets along without zoning, Oct. , 2007 34. Houston Business Journal, Houston congestion among worst in the nation, study reveals, Oct. 19, 2007 35. Houston Chronicle, As city grows, zoning talk is reborn / Neighborhoods want some way to regulate new development, Sept. 30, 2007 VI. Government – finding additional ways to work at a regional scale on issues such as business development, infrastructure maintenance, environmental quality, funding for shared public improvements (e.g. parks, waterways, railroads, health facilities) A. City Government 1. Mayor, City Council 2. Functions 3. Annexations and ETJ 4. Chapter 42 and other pertinent CoH ordinances Local government in the Houston area is organized according to the laws of the state of Texas, which have, in turn been shaped by the needs of local governance in Houston and other metropolitan areas. This interaction has created a system unfamiliar in many ways to outsiders, and poorly understood by the local population. The City of Houston - Like most urban areas, the central city of this region has both a size and a broad set of functions that ensure that decisions made at Houston City Hall will 12 have effects far beyond its city limits. Houston is large. A history of aggressive annexation has produced a corporate area of more than 600 square miles. In recent years the City has been empowered to annex for limited purposes additional territory which extends its corporate limits to nearly 700 square miles. In 1963 the State of Texas granted cities extra territorial jurisdiction (ETJ) in unincorporated areas on their peripheries. Through a series of maneuvers the City of Houston extended its ETJ over an additional 1200 square miles. The population within the city limits of Houston is approximately 2.1 million. The population within its ETJ is about 1.5 million. Within its ETJ a city is able to prevent annexation by any other city as well as incorporation of new municipalities. It also has certain planning and regulatory powers. About 40% of the metropolitan area population is located within the city, and another 30% in the ETJ. Houston has a strong mayor form of government. In the 1940s dissatisfaction with a city manager form of government led voters to change the City Charter by substituting the word ‘mayor’ for ‘city manager’ wherever it appeared in the Charter. Thus, the mayor presides as a voting member of City Council, but also is the chief executive. Department heads, including the Treasurer and City Attorney are mayoral appointees confirmed by Council. Council cannot remove department heads and cannot prevent the mayor from doing so. The mayor is in charge of the City Council agenda. The mayor appoints the members of City Council committees, most of which have no actual statutory powers. The mayor nominates the members of almost all City boards and commissions and all municipal judges, subject to Council confirmation. The mayor nominates for Council confirmation the City representatives to the board of the Metropolitan Transit Authority, and those representatives constitute a majority of the board. The mayor proposes the property tax rate, the operating budget and the capital improvement plan. City Council includes fourteen other members, five elected at large and nine from districts. Council members can force an item onto the Council agenda by majority vote, but this has rarely occurred. Council members are able to nominate the City representatives to the Port of Houston commission, a very powerful body, under a State law dating back to its creation when the construction of the Houston Ship Channel made the city a deepwater port in 1913. Of the fourteen current members, seven are Anglo, four are African American, two are Hispanic and one is Asian American. Half of the Council members are women. One other City officer is elected, the City Controller. A financial officer, the Controller has limited powers but, as an independent voice, can be influential with Council and the public, especially in financial matters. This has led observers to regard the position as a stepping stone to the mayor’s office, but only one Controller has ever accomplished that. Houston voters have imposed term limitations on City officials through an initiative process available only in municipalities in Texas. No one can be elected to an office more than three times in their lifetime. And terms are only two years, meaning that most Council members are in office for six years at most. The result has been a decline in the power of Council members to influence City operations through familiarity with the system and key personnel. It has also led to a tendency to begin planning for the next career move as soon as someone is elected to office. This has contributed to an increase in partisan activity in City government, although City elections are non-partisan. A Council member who is planning on running in a party primary tends to vote with an eye on party primary voters rather than their municipal election constituency. Five of the 13 current Council members are identified as Republican, the rest are Democrats. In presidential elections City voters have been reliably Democratic in recent years. The City operates a water system, sanitary sewer system, park system, library system, a health department, and a permitting and inspection division. It builds and maintains most local streets and major thoroughfares and the associated drainage. It collects solid waste, either directly or through contractors. The convention center is a City facility, as are three major theaters homes to the opera, ballet, symphony and a repertory company. The City’s Aviation Department owns and operates two air carrier airports and a major cargo and general aviation airport. Although the City has a housing division to handle various Federal grants, the public housing authority is an independent agency, but its board is named by the mayor. Many Houstonians are under the mistaken impression that the lack of a zoning ordinance in Houston means that development in Houston is essentially unregulated. Houston ordinances govern the subdivision of land, establish planning standards for development, and restrict certain land use locations. The subdivision regulations and planning standards are also applicable in the City’s ETJ. Subdivision regulations require that any subdivision of land in the City or ETJ conform to certain standards governing size, accessibility, building lines, easements, and street dedications. A development plat is used to demonstrate conformance to regulations when a structure is built or substantially altered as a part of the process of getting a building permit. Planning standards govern the way in which land is subdivided. Houston’s standards include layout and arrangement of streets, including conformance to the adopted Major Thoroughfare and Freeway Plan, dedication of proper right of way widths, block lengths, and connection of stub end streets. Building lines in relation to public streets are mandated. The creation of lots and reserves is addressed to ensure that such tracts meet certain requirements for size and access, and to ensure that compensating open space is provided when lots sizes go below a certain level. Utility easements requirements are defined and multifamily housing development standards defined. Multifamily housing standards include private street patterns, fire fighting requirements, minimum parking provision, and required open space based on the number of residents. A recent addition to the City’s planning standards is a requirement for park dedication as a part of the creation of residential subdivisions within the city limits of the City of Houston. Developers have a choice of dedicating land in the development or making a contribution to a fund to acquire park land. Funds are restricted to the acquisition of park land in the same sector of the city as the residential development producing the contribution. Additional regulations mandate the preservation of street trees and require the planting of trees and shrubs along street rights of way and in parking lots. Sexually oriented businesses are barred from locations that are primarily residential, or close to schools, churches and other sensitive uses. Hotels and motels are barred from residential areas as a result of a boom in the construction of “hot sheet” motels in poor neighborhoods in the early 1990s. There are also restrictions in the storage of hazardous materials in proximity to residences as a result of a fire on the edge of a northeast Houston neighborhood. A weak historic preservation ordinance is able to delay but not obstruct the destruction of significant structures, although support seems to be building for strengthening that restriction. Mobile homes can be located within the city limits only in subdivisions 14 specifically platted as mobile home locations. Billboard regulation was first introduced in 1980 and has resulted in litigations and State legislative intervention ever since. Although the original 1980 ordinance has been undercut by such intervention, the number of billboards in Houston has declined from 14,000 to 5,000 even as the city has grown steadily. The lack of zoning in Houston and its ETJ has led to a heightened reliance on deed restrictions to keep incompatible uses out of single family residential areas. Each subdivision in the city has its own deed restrictions, and the ability to enforce those restrictions varies with the language of the restrictions and the history of their enforcement. Some deed restrictions were written with provisions that allowed the restrictions to lapse after thirty or fifty years. In other subdivisions property owners did not try to enforce deed restrictions when homes were converted to businesses, and now the enforceability of the restrictions is questionable. The City has sought to strengthen the ability of property owners to enforce restrictions preventing conversion of homes to businesses. It has been granted status to intervene in lawsuits over conversion, and has adopted an ordinance that bars the issuance of a building permit for a structure that is non-conforming to existing deed restrictions. State laws now make it easier to renew expiring deed restrictions, and to establish deed restrictions where none currently exist. The City has adopted methods to try and maintain residential character of neighborhoods without restrictions, or with limited restrictions. Homeowners may petition the City to establish a prevailing building line, based on current structures, which new construction could not violate. Homeowners can also petition for the establishment of prevailing lot sizes to prevent the subdivision of lots for the construction of row houses or town houses. These methods have been employed in older neighborhoods with mixed results. B. Other municipalities 1. Sugar Land, West University 2. Pasadena, Baytown 3. The Woodlands Suburban municipalities in the Houston area take a number of forms. Bellaire and West University Place were street car suburbs established before Houston could prevent incorporations on its periphery. Both are located in near southwest Houston and are surrounded by the central city. Both have the distinction of being zoned, which has encouraged the replacement of the aging housing with new construction of much larger and overtly luxurious homes than the original middle class housing. Other enclave municipalities are the “Memorial Villages”, a cluster of six villages surrounded by the central city in the northwest. They were incorporated just before Houston doubled in size through a single annexation in 1956. Their zoning ordinances and heavily wooded setting have made them high income neighborhoods with large lots and little commercial development. In Fort Bend County Sugar Land is the most prominent of a group of former farming towns that are now suburbs of Houston. Fort Bend was a center for sugar cane growing, and Sugar Land was the location of the Imperial Sugar refinery. It is now the center for office and retail development in Fort Bend, based on a master planned community developed Gerald Hines on the site of a former sugar cane plantation. Sugar Land’s zoning ordinance currently includes no additional sites for the construction of apartments, always a sensitive issue for single family home owners. 15 On the east side of Houston are a number of suburban towns that were transformed by the opening of the Houston Ship Channel. The length of the Ship Channel on its way from the Turning Basin in the east end of Houston to Galveston Bay provided numerous sites for the construction of industrial facilities. The employees of these facilities turned towns that had been agricultural in their orientation to industrial suburbs. Pasadena is the largest of these, with 150,000 people, making it the second largest city in the region. It does not have zoning, and, until recently, neither did nearby Baytown, the home of one of the largest refineries in the world, the Exxon-Mobil facility. Reflecting their perceived independence of Houston, the eastside industrial suburbs did not vote to join the Metropolitan Transit Authority when it was created in 1978. At that time unincorporated suburbs to the north and west voted to participate, as did bedroom suburbs like Missouri City in Fort Bend County. Houston’s largest master planned community The Woodlands began as a project with federal subsidies under legislation intended to create “new towns” outside of fading central cities. Construction in The Woodlands began in the early 1970s. At that time the developer was required to include a certain number of affordable housing units in the mix of new construction. Innovations such as the use of permeable asphalt to reduce runoff and help preserve the tree canopy were tried. As Houston and The Woodlands have grown, the community has developed its own center of gravity. Retail and office development has boomed, and new residential construction has shifted to the higher end of the market. The original area of The Woodlands was added to the Houston ETJ by petition of the developer. The City of Houston’s ability to annex this area has grown more theoretical as State law has become more restrictive, and The Woodlands has taken steps to create special districts to assist in the development of urban infrastructure in its town center. At this time governance of The Woodlands is in flux, and may result in its incorporation. C. County government County governments in Texas do not have ordinance making powers. In most of the state their primary functions are to operate the state court system, provide a sheriff and a jail, maintain rural roads and conduct elections. In Houston the size and complexity of the unincorporated suburban areas in Houston’s ETJ within Harris County have led the State to expand the services that a county may provide. Harris County operates a library and park system and health clinics. The Harris County Hospital District has a separate administration, but is subject to the County Commission. It operates two charity hospitals. After an encephalitis epidemic in the early 1960s, the County also has a mosquito control function. Unlike many counties, Harris County also has a Flood Control District overlay. Flood Control maintains the main drainage courses in Harris County and has developed a number of storm water retention areas to deal with damaging run off. The only regulation of building in unincorporated Harris County is related to requirements under the Federal Flood Insurance program. The Sheriff’s office provides patrol service to unincorporated areas, and operates an extensive jail system. Counties were never designed to substitute for municipalities in providing services to urban areas. Service provision by Harris County represents a patchwork of varying effectiveness. D. Independent school districts 1. Financing 2. Segregation/integration 16 Public schools in Texas are operated by independent school districts. The Houston Independent School District has no connection to the City of Houston. It includes portions of other municipalities as well as unincorporated Harris County. The territory of the City of Houston extends into twenty three school districts. School districts are financed by the State of Texas and by local property taxes. In recent decades direct state assistance has declined as a percentage of school district revenue, and school district property tax rates have risen as a result. This has raised combined property tax rates in some school districts to more than 3% of assessed valuation annually. Recent increases in state assistance to school districts has produced some reductions in school district tax rates, but property tax rates in Texas generally range between 2.5% and 3% of assessed valuation. All or a major fraction of seventeen school districts are located within the City or its ETJ. As a result, development within these school districts is not controlled by zoning. The ability of developers to build apartments in all of these suburban school districts may have contributed to the suburbanization of African American and Hispanic populations. In the 1960s and 1970s, when the Houston Independent School District was under court order to eliminate the vestiges of segregation, most African American and Hispanic students in the region lived there. As a result, Anglos opting out the HISD system could move to almost any suburban school district and no longer have to be concerned with court orders changing attendance boundaries. Nowadays most school districts in Harris County have significant numbers of African American, Hispanic and Asian American students. Racial sensitivity has also declined. Anglo parents at the time of the white flight from HISD would generally leave schools with less than an Anglo majority. Now multiracial student bodies can be quite stable. The most sought after high school in HISD, for instance, has not had an Anglo majority in its enrollment in decades. REFERENCE TABS: 36. Wall Street Journal article on Ashby High Rise issue in Houston, Oct. 17, 2007 37. Houston Chronicle article on former mayor joining campaign against development regulations (January 8, 2008) Conclusion Given the Houston region’s rich economic past and present, and given that zoning is off the table in Houston (Houston has a strong heritage against anything that might be perceived to encroach on property rights), what other vehicles, actions, penalties or incentives, public or private initiatives, or other suggestions might the panel have for Houston to consider to better address long term growth objectives...and, specifically, to STEER NEEDED DENSITY to where it is best accommodated, most efficient, and most likely to serve the greater good? Some local leaders think we need a regional approach to focusing infrastructure to where it benefits the greater long term good; and that we lack the regional governance, leadership and consensus to make strategic infrastructure plans that adequately address the long term effects of our exceptional growth prospects. How can we better address these issues at a time when the business community is doing so well and (joined with the inherent short term perspective of most political leaders) not especially prone to think long term? 17 Our Emerging Houston Region PANEL STRUCTURE/ACTIVITIES I. Monday, February 4, 2008 (late afternoon/early evening) Drive from airport to dinner with forum coordinators/sponsors, noting points of interest 4 p.m. ULI organizational meeting with panelists 5:30 p.m. Late afternoon briefing on key issues affecting the Houston region by Roger Galatas and Steve Klineberg; 7:00 p.m. Dinner with CHF members and forum sponsors. [Location – TBA] II. Tuesday, February 5, 2008 8 a.m. - Noon Half-day Field Trips/Site Visits. VAN TOUR # 1 – Hardy Toll Road/I-45 North; The Woodlands, FM 1960, Near Northside, I-45 South to East End, Galveston County, Sunnyside. VAN TOUR #2 – IH 59, Sugar Land, Beltway 8 to Katy Freeway through Washington Avenue; Midtown, Downtown; Greater Southeast MD area; Reliant Park area. 12:30 p.m. 1 –6 p.m. Box Lunch Interviews and work sessions with city and regional leaders (see attached list) 1:00 p.m. Telephone conference and E-power point presentation with John Fregonese with Fregonese Associates (Portland, OR) to brief the panel on his work with HGAC on regional infrastructure costs due to growth patterns (including increased environmental costs, taxes and transportation costs) [internet hook-up and internet access] III. IV. Wednesday, February 6, 2008 7:30 a.m. – 9:30 a.m. Finish Interviews and work sessions with city and regional leaders (see attached list) Noon – 6 p.m. Panelists Discussion & Work Session 6 p.m. Panelists Dinner Thursday, February 7, 2008 9 a.m. Panelist Press Conference and Conclusion 18 Center for Houston’s Future Interview List (1) County Judge Hebert (Fort Bend County) & Alan Sadler (Montgomery County) (2) County Judge Emmett, Harris County (3) Mayor White (4) Ned Holmes & Jim Edmonds (5) David Wolff (6) Mayors of Sugar Land, Bellaire & Pearland (7) HGAC – Jack Steele and HGAC staff leadership (8) Carol Lewis – Transportation; CoH Planning Commission (9) Kelly Frels, George Beatty – Texas Environmental Research Consortium (TERC) (10) Management Districts meeting – Jim Murphy, John Breeding, Jack Drake, Frank Robinson (City of Woodlands), Bob Eury, East End MD, Roger Hord, Barron Wallace (11) Developers meeting - Larry Johnson, Les Newton, Mark Kilkenney, Ted Nelson, Joe Necker, Tim Welbes (The Woodlands), Dan Nip, Mark Culver (Hines) (12) Greater Houston Partnership (GHP) Wolterman, Moseley, Jiles, George Gonzales meeting – Hoffmeister, (13) Environmental Infrastructure Meeting – Jim Blackburn, Sharon Mattox, Lynne Humphries, John Kirksey, Kevin Shanley 19