Wednesday, October 8, 2014

Downtown Houston, Families and Residential Development

It's easy to be excited about the increase of multifamily housing developments in Downtown Houston. They're popping up all over the place. They're announcing new projects weekly. I hesitate to call all these developments multifamily, as most of these units are not likely accommodate families, but instead high-income singles, couples, or roommates. Take some time for yourself and examine the most recent 2008-2012 American Community Survey (ACS) 5-year estimates on the American FactFinder site for US Census Tracts 1000 (most of Downtown Houston) and 2101 (the part of Downtown Houston north of Buffalo and White Oak Bayous and south of I-10). The ACS population numbers for Downtown Houston are probably much lower than current conditions when considering the growth that has taken place in Houston. However, the trends revealed are valuable. It may be more trustworthy to look at more recent retail analyses when inquiring about more recent population numbers. 

Investment, especially in residential properties, is a great thing for Downtown Houston. Keep it coming! We need more residential investment,
especially as we continue to attempt to attract retail and entertainment opportunities. If retail and entertainment establishments are to be viable, Houston needs more residents near its core, or people need to see Downtown Houston as a destination. Right now, both of those realities are relatively weak when compared to other cities, but they are getting stronger.

To boost Downtown Houston's residency, in 2012 the Houston Downtown Management District and the TIRZ#3 Downtown Living Program of the Downtown Redevelopment Authority partnered to create the Downtown Living Initiative Program. The program provides development incentives for multifamily and mixed use developments that construct more than 10 new dwelling units, are within the program boundary area, and help to enhance the pedestrian environment. The program was originally intended to provide incentives for 2,500 units, but was expanded to provide incentives for up to 5,000 units total. Developers can take advantage of the program until June 30, 2016, or until all 5,000 units are accounted for. With a dozen residential projects either completed or scheduled, more than 3,800 of the 5,000 units are accounted for. The funding of up to $75 million is not a small amount of money.

If you take notice of what is happening in most large cities, and especially in North America, people, especially millennials, want to live in cities, especially urban cores. To many Houstonians, this doesn't make sense. Many claim that people move to Houston because they want a single family home with a large yard, which they can drive to in their air conditioned car. Urbanism? We don't need no stinkin' urbanism. People want suburbanism! But yet, there's those that argue against the "Keep Houston, Houston" position, claiming our recent parks and urban development progress as making this city a better place to live. The juxtaposition of these views is what keeps Houston from really making meaningful changes in how things look on the ground here, and how the city operates as an organism.

Now, Houston does not like to take pointers from anyone. But we're at a time in this city's development where we might benefit from trying something different. A few weeks ago Houston Chronicle managing editor Vernon Loeb described Houston as a city of extremes. We have one of the fastest growing millionaire populations in the nation, while our families earning less than $25,000 grew almost just as fast. I've said it before;
Houston is seen by some as the next great American city, however, there is not a place where segregation and inequality are so prevalent. In Smithsonian Magazine's article, What Makes Houston the Next Great American City?, the point is made that Houston has "the Texas Medical Center, the finest medical facility in the world, but we also have the highest percentage of kids without health care. The inequality is so clear here."
It's this sort of contrast is hard to forget when everyone is claiming Houston is limitless. It shouldn't take a MacArthur genius grant to tell us that affordable housing is a good idea. Sure, the idea of affordable housing is great we say, but, we just don't want that sort of development in our backyards. We like to tout our inclusiveness in Houston, without batting a lash at some of the implications of our market-driven development and suburban sprawl. It's costly to own a car, and costly to have to drive it each day to work.

Let's make no mistake about it: Houston needs more housing. Houston is regularly touted as a great, affordable place to live. But, not if you want to live in a nice, safe neighborhood with services. You might be fine in a seedier neighborhood on your own, but you'd be better to raise your family somewhere else (most likely a distant suburb). And even if you're a low-to-middle ranking public servant, teacher or service professional, there's no way to expect to live anywhere close to downtown without being financially irresponsible. People are moving to city centers, and rents are rapidly rising in cities (and especially urban centers) as a result. In Houston you can't go a day without hearing the news about a new multifamily development, often times taking the place of a current multifamily development.

In the past few years there have been pledges to provide for affordable housing for the homeless, including 1,000 units pledged in 2012 by Mayor Annise Parker and the Houston Housing Authority. Our push for affordable housing shouldn't be a one-time thing, notes Mayor Parker. But, unlike other cities, most of Houston's affordable housing is produced in low income areas, away from many of the city's urban centers, or specifically for veterans (Like the Travis Street Plaza Apartments), or the elderly on fixed incomes (New Hope Housing on Hamilton). Low income housing doesn't have to be secluded to the fringes of town, nor must it continue to erode someone's dignity.

Recent news about the Hamilton Apartments in Downtown Houston have increased speculation as to whether the project will be affordable housing or whether it will be market rate. Speculators have noted that the developers has applied for funding from the City of Houston in 2012 and 2013, but that they were not awarded the requested $3 million. Further discussion notes that the project will continue to go forward with market rate units.

But something else came about as part of the discussion; where will our firefighters, police, paramedics, nurses, teachers and service industry professionals live? It's really easy to just say "Stick them in the suburbs, that's where the market says they should go." Houston has a ton of engineers thanks to our energy industry, but the biggest projected job growths in the coming years will not be in engineering, but in various areas of health care and other service industries. This is where I wonder if our funding for the Downtown Living Initiative, and other future initiatives, could be better distributed. Meanwhile, our other efforts for affordable housing have only focused on seniors, veterans and the homeless.

As a city we make sure to earmark participation by enterprises owned by minorities, small businesses, women, the disadvantaged, or persons with disabilities. We make sure to be inclusive in our city's business support, so why not our housing funding? Housing incentives to the tune of $25 million, and now up to $75 million, is no small chunk of change, especially when they go right back to developers. The Novare group (from Atlanta, mind you), the developers behind the Skyhouse projects, are currently building, or have recently opened, at least 12 similar looking towers throughout the country, benefited greatly from the Downtown Living Initiative. Some question whether this sort of incentive was needed to even attract housing development to Downtown Houston. I'd guess not entirely. But the development landscape here in Houston is changing. The claim that development is skewed to only Houston-based enterprises must not be holding true. Companies are recognizing the benefit of urban residential growth and taking advantage of Houston's downtown land.

Downtowns for Families?

Many cities are increasingly becoming less and less accommodating to families. Not only due to their cost, which is probably the greatest factor, but in their design as well. Will we have cities that are safe enough for kids to walk to school? We're continuing to build sprawling cities for those who are young, but we're graying as a nation. Will our downtowns even have families or be interesting to anyone outside the coveted 18-49 age cohort (and it's probably the 22-35 age cohort that is most coveted). Families want amenities, more than the tanning booths, fitness centers and game rooms that are typically supplied by many multifamily developers. As Downtown Houston continues to add residents, I hope we consider a range of residents.

Downtown Houston Demographics

In a recent Houston press article, The Changing Face of Houston - Downtown, Then and Now, it is noted that "Houstonians are beginning to view downtown as a livable neighborhood, rather than just as a place they had to commute to for work." (I think that the "downtown houston" boundary mentioned in the article is an extension beyond that of the actual Houston Downtown District boundaries.) But let's not be fooled by the number of people living in Downtown Houston, or its perceived diversity. Those large numbers (The Downtown District claims 19,000 downtown residents) are boosted because of Downtown Houston's large "group quarters" population: The Harris County Jail (Nearly 10,000 inmates) and the Houston Federal Detention Center (949 inmates). See this 2010 Census racial density dot map below:

It's true that most downtown districts have jails, as they're close to public transit, parking structures, and are centrally located near public services and local government centers. They also inflate diversity and population totals.

recent comparison of apartment buildings in the Houston region showed what $1,300 would buy in Downtown Houston, The Woodlands, and the Museum District. All were one-bedroom apartments. For a family, this is impractical. And, for Downtown Houston, the median cost of an apartment is $1,595. It can only be suspected that this will greatly rise given the upscale nature of current multifamily housing. A downtown district can be a great place to raise a family, but not at those prices for a one bedroom apartment. Certainly, it will have its own set of challenges compared to raising a family in the suburbs, but also comes with a great set of benefits. Discovery Green hosts a variety of family and kids events, but there's not too many families with children that live close by. Again, these are 2012 ACS numbers, and are just projections, so there's probably some variation.

Could a program like the Downtown Living Initiative allow families and those who are not single engineers, lawyers or energy executives to live downtown? Sure. Why not take that $15,000 per unit and apply it to the cost of renting the unit? Hey, it's not much, but over a couple of years, that can make downtown living affordable for a broader range of people. Or better yet, much like inclusive zoning (gasp! Ahhh, the Z-word), apply that funding to a minimum number of low-to-moderate income leases. While the subsidy is great for business and developers, I'm not so sure that the Downtown Living Initiative money will make rents any cheaper for prospective residents. That's certainly not what the initiative is intended to do, but it would be a bonus.

Learning From Other Cities: Detroit

Earlier this year there was some discussion about the lack of housing in Downtown Detroit, and that many residents were facing steep rental increases. Daniel Kay Hertz up in Chicago, in his blog post Priced Out of Downtown Detroit, argues that "...if there is no older, more affordable housing stock – as in places like downtown Detroit – then the only housing is the new, expensive stuff, and you’ll get a pretty economically homogeneous neighborhood no matter how much you build." This is what's happening in Houston.

Learning From Other Cities: New York

In New York City Mayor Bill de Blasio has set out on an ambitious path to create 200,000 affordable housing units in 10 years. It's resulted in projects like Arbor House, which is a far cry from Chicago's ill-fated Cabrini Green, as well as the Atlantic Yards, adjacent to Brooklyn's Barclay's Center. Atlantic Yards would have one building with 301 apartments, all affordable units, and another building with 363 apartments, 181 of them affordable units. There's so many examples to choose from. So manySo so many. Who is doing this sort of thing in Houston? No one really. Our policies don't provide for this. It's what happens in a market driven town. Judging by census projections (and excluding for the diversity brought to us by our downtown jails), Downtown Houston will continue to be pretty homogeneous in the future.

Learning From Other Cities: Toronto

I pay a good deal of attention to the city of Toronto and their planning processes. Jennifer Keesmaat, the City of Toronto Chief Planner, leads a Chief Planner Roundtable a few times a year, giving Torontonians a forum to discuss city-building challenges and providing an education for community leaders, industry leaders and government officials about a variety of urban issues. "The flexible and informal forum enables the City Planning Division to form new partnerships with community and city-building advocates, other city Divisions, the private sector, academics and beyond." The April, 24, 2014 roundtable discussing "Planning Cities for Families". Toronto has been recognized as a youthful city, but is wise in asking the questions:
"But how will Toronto's attraction to this group fare when they move on to have children? Is the city primed to retain these young professionals as they begin family formation, or will they move on to more "family-friendly" places?"
The panel went on to discuss:

  • Are city builders aware of the special needs of families with young children?
  • What barriers currently exist to the creation of family friendly cities, neighbourhoods and buildings, and what can city builders do to change this? 
  • Does Toronto have the amenities, services, affordability and infrastructure to satisfy the needs of families and retain residents across their whole life cycle? 
  • How can community services and facilities that are unique to children and to the needs of families with young children be integrated and delivered in the planning process?
  • How can we ensure new communities accommodate a broader mix of incomes?

These are questions that very few seem to be asking in Houston.

Here's where we can learn from other cities, and especially a city like Toronto. They are making great strides in realizing the need for affordable housing. Toronto is one of the only other North American cities that is experiencing the same type of growth as Houston, and even other Canadian cities are feeling the effects, and some would argue the needs, of suburban sprawl. Toronto realizes that it makes economic sense to build more housing, especially in its urban core. This report shows the great deal of growth that has occurred from 2009 to 2013. The city has also been a staunch advocate of mid-rise development, knowing how it allows residents to interact with the city. Typically, critics have argued that high-rise residential development kills a city's livability.

Toronto's Downtown Residential and Non-Residential Development Activity

I know, I know. "This is Houston, and the market will respond and accommodate people's housing needs and take care of everything. Everyone will be fine." But maybe we won't. Maybe it's time that we look to more innovative ways to address housing in our city. Yes, it's true, if Houston wants more affordable housing, we just need to build more housing, and housing that's not a 30 mile drive from employment centers, and not ultra-luxury. Not only do Houstonians have to consider the price of housing itself, but also the cost of transit when choosing a place to live. This is known as a location affordability index. When all things are considered, transportation in Houston costs a great deal, and is normally about equal to that of housing costs.

We'll readily give public tax money to developers of luxury housing, without any of the benefits being for a larger portion of the public. (Most of the funding would come from property tax collections from new development. The remaining fifth of the funding is supposed to come from a Downtown Management District tax.)

The drawback of Houston submitting its affordable housing situation solely to the free market is that it perpetuates our city's need for automobiles and pushes everyone, except the highest earning (or those willing to spend a greater-than-responsible amount on housing) out to the suburbs. Just remember to consider that when complaining about traffic in our city in the years to come, especially when we've elected to contribute less money to our public transit infrastructure, and instead build more roads. It's more to consider as we continue to create a "new donut" model in Houston.

It will be great to see how much of this residential development in Downtown Houston affects our city, especially in attracting a greater variety of downtown retail and entertainment. There will be many new people making Downtown Houston their home in the coming years. I hope that we consider the broad spectrum of who desires to live in cities.

I understand that no one is entitled to live in any location they desire, nor will everyone be able to live in a downtown district. In fact, many will prefer not to live in an urban center. That's fine. But this shouldn't mean that we don't consider policies and attempt to create a city that can be enjoyed by a greater number and variety of residents as we steward our resources.