Houston Future Growth: Predict The Future

[luciaphile]

Subdude, however depressingly, probably nailed it.

 

Indeed, I would only add that following the overturning of the Endangered Species Act and successful court challenges to conservation tools, amid populist hostility to environmentalism, deftly exploited by libertarian-leaning Republicans ... those parts of the Katy Prairie protected by conservation easement were developed, although some of it was turned into ball fields by the county.

[arche_757]

Slick Vik is correct.  I have a two good friends who commute from suburb to suburb every day, one takes 30 minutes each way the other 45.  They decided to live where they do and don't mind the drive (so far) but one of them is, if anything, positioned badly for any future job transfers anywhere but the west side of town.

Where I live (greater Clear Lake) people either commute downtown or Galveston for work, and its about equidistant to both, but the time spent getting to the island is less than getting downtown.

 

I have also lived inside the loop and commuted out to a "suburb" and that trip usually took about 35 minutes (with a stop over at Diedericks at Hazard for a coffee - I really miss that coffee shop!!)

[kbates2]

People don't usually stay at jobs for long periods of time now (4 years or something?).  Buying a house close to a business center that you have no idea whether you will work at in 4 years could be considered a bad idea.  Living in the loop hedges your bet.

[Subdude]

I can certainly see Downtown having a commercial "bust" but I think residential growth will continue to happen in and around the core.

 

And Subdude - just curious - why do you see a bust?  Not a downtown, but a bust?

 

 

Well perhaps “bust” might be too strong a word, but I don’t think it is unreasonable to expect at least a significant downturn.  

 

Right now interest rates are low because the national economy remains weak.  However, economic reality is a lot better in certain spots:  Texas, particularly Houston, and for those who can afford to materially invest in stocks.  Therefore, predictably enough, cheap money is seeking returns in the stock market and in Houston real estate.  Hence the string of recent stock market highs and proposals for Houston development.   There is starting to be some concern that stock markets are getting bubbly, and it doesn’t seem unreasonable to think Texas real estate might also be entering bubble territory.   Real estate bubbles are even harder to spot than stock market bubbles, but it is just as brutal when they crash.

 

Second, Houston still has large dependence on the energy industry, and that may start to be under pressure as gains from fracking start to be played out and countries start to take stronger actions to suppress consumption.

 

Finally, the national economy has been expanding (slowly) since 2009.  On historic form, it is extremely likely that there will be another recession during this decade, and that could suppress demand just as new development comes on-line.

 

Saying that in 2030 there had been ten years without significant development was actually conservative with respect to Houston’s history after the bust of the early 1980s.  That virtually eliminated new downtown development for about 15 years, and even now there are buildings downtown that have been vacant since the 1980s.  

 

I'm not wishing for a bust, but I see a lot of factors that could make one happen. 

 

 

 

 

 

(with a stop over at Diedericks at Hazard for a coffee - I really miss that coffee shop!!)

 

I used to hang out there.  Broke my heart when it closed.

[livincinco]

Slick Vik is correct.  I have a two good friends who commute from suburb to suburb every day, one takes 30 minutes each way the other 45.  They decided to live where they do and don't mind the drive (so far) but one of them is, if anything, positioned badly for any future job transfers anywhere but the west side of town.

Where I live (greater Clear Lake) people either commute downtown or Galveston for work, and its about equidistant to both, but the time spent getting to the island is less than getting downtown.

 

I have also lived inside the loop and commuted out to a "suburb" and that trip usually took about 35 minutes (with a stop over at Diedericks at Hazard for a coffee - I really miss that coffee shop!!)

 

I appreciate your anecdotal evidence, but if you look at the numbers, you'll see that there's pretty clear statistical evidence that large scale public transit increases commute times, it doesn't decrease it.  Do some city to city comparisons and you'll see it pretty clearly.

 

The top five metros for public transportation usage are: New York, San Francisco, Washington, Boston, and Chicago.   The top three metros for commute time are:  New York, Washington, and Chicago.  Atlanta (which is frequently held up as an example of public transit envy) is number five.

 

(#4 is Riverside, CA - which is arguably a suburban community of LA)

 

I think that we're minimizing the question of economics though.  Every business is going to consider a series of factors when determining where to locate - costs, availability of employees, amenities, amongst others.  What you're seeing right now is that a majority of companies are seeing suburban locations as more attractive than downtown when considering and increased congestion is a big part of that.  Rapidly increasing housing costs and office rents inside the loop are driving it too.

 

Average rents in the CBD are an average of $33.25/sq ft.  Average rents in suburban markets are $22.11/sq ft with a number of markets at lower rates than that.  That's a pretty powerful consideration for a business when deciding where to locate.

 

My point is that I think that this trend will continue.  The loop will continue to grow and that prices will continue to increase.  A small percentage of people and businesses that can afford to locate there will, however the overall numbers will continue to favor the suburbs for the same reasons.

 

 

[Slick Vik]

I appreciate your anecdotal evidence, but if you look at the numbers, you'll see that there's pretty clear statistical evidence that large scale public transit increases commute times, it doesn't decrease it.  Do some city to city comparisons and you'll see it pretty clearly.

 

The top five metros for public transportation usage are: New York, San Francisco, Washington, Boston, and Chicago.   The top three metros for commute time are:  New York, Washington, and Chicago.  Atlanta (which is frequently held up as an example of public transit envy) is number five.

 

(#4 is Riverside, CA - which is arguably a suburban community of LA)

 

I think that we're minimizing the question of economics though.  Every business is going to consider a series of factors when determining where to locate - costs, availability of employees, amenities, amongst others.  What you're seeing right now is that a majority of companies are seeing suburban locations as more attractive than downtown when considering and increased congestion is a big part of that.  Rapidly increasing housing costs and office rents inside the loop are driving it too.

 

Average rents in the CBD are an average of $33.25/sq ft.  Average rents in suburban markets are $22.11/sq ft with a number of markets at lower rates than that.  That's a pretty powerful consideration for a business when deciding where to locate.

 

My point is that I think that this trend will continue.  The loop will continue to grow and that prices will continue to increase.  A small percentage of people and businesses that can afford to locate there will, however the overall numbers will continue to favor the suburbs for the same reasons.

 

Have you compared the commute times when driving against taking public transit in those same corridors? Even using Houston as an example, taking any park and ride bus into the city is faster than driving. Also, the vacancy rate for office space in downtown is very low right now. And you're right, the businesses that are doing well with employees that are doing well are probably going to stay, because their workers can afford to live nearby. However, please don't make it seem like the suburbs are the only affordable area that exists in the metro area. There are plenty of areas in the actual 610 loop where a house can be easily bought for under $100,000.

[livincinco]

Have you compared the commute times when driving against taking public transit in those same corridors? Even using Houston as an example, taking any park and ride bus into the city is faster than driving. Also, the vacancy rate for office space in downtown is very low right now. And you're right, the businesses that are doing well with employees that are doing well are probably going to stay, because their workers can afford to live nearby. However, please don't make it seem like the suburbs are the only affordable area that exists in the metro area. There are plenty of areas in the actual 610 loop where a house can be easily bought for under $100,000.

 

If you compare door to door transit time then yes, driving is faster in almost every case.

 

Regarding housing prices, you can always find exceptions, but average housing cost and average office rent are lower in the suburbs.

 

 

[Slick Vik]

If you compare door to door transit time then yes, driving is faster in almost every case.

 

Regarding housing prices, you can always find exceptions, but average housing cost and average office rent are lower in the suburbs.

 

I disagree on the door to door transit time. It's faster for most people that live on a corridor in Houston to drive to a park and ride and catch the bus than to go through absurd traffic. Also there are the additional costs of wear and tear on your car and parking fees.

[arche_757]

And Subdude...  I agree that there will be a slow down, but certainly not a bust like the 1980s witnessed.  And I don't think the shale play is going to slow things down here in Houston for quite a while.  And while foreign countries counteract our own use devaluing the price of oil, I don't see that hurting the home grown industry to the extent that it will harm Houston.

 

The only real concern I have is a major storm hitting Houston and hurting growth in some of the areas (remember folks - much of Houston proper floods quite regularly - not just coastal areas).  If a Hurricane Hugo/Andrew (or worse Camile) hits the greater Houston area the devistation would be unsurpased and quite alarming.  People would of course rebuild, but when something like that happens you can kiss away at least a couple of years of solid development and growth with rebuilding.

[Subdude]

And Subdude...  I agree that there will be a slow down, but certainly not a bust like the 1980s witnessed.  And I don't think the shale play is going to slow things down here in Houston for quite a while.  And while foreign countries counteract our own use devaluing the price of oil, I don't see that hurting the home grown industry to the extent that it will harm Houston.

 

 

I certainly hope you're right.  Again, I don't think things are necessarily that dire, it was constructing a scenario.  One thing I thought about but didn't have a feel for was how successful the efforts to create street-level retail downtown would be.  

[august948]

I disagree on the door to door transit time. It's faster for most people that live on a corridor in Houston to drive to a park and ride and catch the bus than to go through absurd traffic. Also there are the additional costs of wear and tear on your car and parking fees.

 

And that opinion is based on your daily experience commuting in from Katy?

 

[Slick Vik]

And that opinion is based on your daily experience commuting in from Katy?

I've been to Katy twice in my life.