The End of Suburbia

[livincinco]

This is a complete fabrication and you know it. My house in the suburbs would cost half as much as it does inside Loop 610, so I am getting a bigger subsidy. Your arguments imply that the buyer of a $10 million home in Manhattan doesn't get a deduction for interest, and is therefore providing a subsidy to the buyer of a $300,000 home in The Woodlands. That's totally wrong. The buyer in Manhattan will get a bigger tax deduction because his mortgage is larger. The only reason that statistics might show that there are more mortgage deductions in the suburbs is that there are more rental properties in urban areas, and the interest deduction shows up as a business expense instead of a personal mortgage interest deduction.

I agree with Ross. The mortgage deduction overwhelmingly favors the metros with the highest density, because high density tends to drive up real estate values. See below.

http://www.theatlanticcities.com/housing/2012/12/stark-geographic-inequality-home-mortgage-interest-deduction/4130/

[samagon]

More importantly, besides ripping off comments and articles instead of defending his arguments when people call BS on it, Slick fails to keep in mind even trip generations. The Woodlands now has multiple major office buildings and campuses--if I live, work, and shop in The Woodlands, am I a suburban leech who needs to move to an inner Houston apartment?

 

Yes, if more people were like me and lived in the core and commuted to a business located outside the beltway, there would instantly be less drain on natural resources.

[Slick Vik]

We explore the hypothesis that high home-ownership damages the labor market. Our results are relevant to, and may be worrying for, a range of policy-makers and researchers.  We find that rises in the home-ownership rate in a U.S. state are a precursor to eventual sharp rises in unemployment in that state.  The elasticity exceeds unity: a doubling of the rate of home-ownership in a U.S. state is followed in the long-run by more than a doubling of the later unemployment rate.  What mechanism might explain this? We show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. Our argument is not that owners themselves are disproportionately unemployed. The evidence suggests, instead, that the housing market can produce negative ‘externalities’ upon the labor market. The time lags are long. That gradualness may explain why these important patterns are so little-known.

http://www.freakonomics.com/2013/06/03/does-high-home-ownership-lead-to-higher-unemployment/

[Slick Vik]

“A study of women in the United States found that homeowners were no happier than renters, on average. And even if you’re currently living in a cramped basement suite, you may find that moving to a nicer home has surprisingly little impact on your overall happiness. Researchers followed thousands of people in Germany who moved to a new home because there was something they didn’t like about their old home. In the five years after relocating, the residents reported a significant increase in satisfaction with their housing, but their overall satisfaction with their lives didn’t budge.”
 

Freakonomics Blog

[jt16]

You are quoting freakonomics? A guy that uses highly suspect research methods to make wacky correlations? He's more about entertainment than he is about research.

[jt16]

If you like freakonics then you'll like his take that driving cars is greener than transit

http://dc.streetsblog.org/2012/11/15/freakonomics-hucksters-save-the-earth-drive-a-car/

[livincinco]

If you like freakonics then you'll like his take that driving cars is greener than transit

http://dc.streetsblog.org/2012/11/15/freakonomics-hucksters-save-the-earth-drive-a-car/

 

If you click through a couple of levels, you'll hit this article too.

 

http://www.theonion.com/articles/report-98-percent-of-us-commuters-favor-public-tra,1434/

 

I love The Onion.

[Slick Vik]

You are quoting freakonomics? A guy that uses highly suspect research methods to make wacky correlations? He's more about entertainment than he is about research.

 

It's actually from this article.

 

http://articles.latimes.com/2013/may/19/opinion/la-oe-norton-happiness-spending-20130519

 

I'm interested in hearing your scope of work and educational background in comparison to the world famous economist you just trashed.

[IronTiger]

You are quoting freakonomics? A guy that uses highly suspect research methods to make wacky correlations? He's more about entertainment than he is about research.

 

 

I read that back in high school, and although interesting, there was a lot of BS that I didn't believe one second of.

 

[august948]

I'm interested in hearing your scope of work and educational background in comparison to the world famous economist you just trashed.

"If all economists were laid end to end, they would not reach a conclusion."

- George Bernard Shaw

One of many things I learned on the debate team in high school was that you can find someone with a PhD from a prestigious school to support any wacky theory you might want to argue about.

I think we've been over this already but it bears repeating...just because someone wrote it down doesn't make it true.

[Slick Vik]

"If all economists were laid end to end, they would not reach a conclusion."

- George Bernard Shaw

One of many things I learned on the debate team in high school was that you can find someone with a PhD from a prestigious school to support any wacky theory you might want to argue about.

I think we've been over this already but it bears repeating...just because someone wrote it down doesn't make it true.

 

I've put up dozens of links here supporting my views. I'm not some wacko nutjob with an agenda. I just want a good public transportation system like a city with Houston's population SHOULD have. It's okay though sooner or later my generation will win out, just have to wait for the dinosaurs to die out. Only a matter of time.

[august948]

I've put up dozens of links here supporting my views. I'm not some wacko nutjob with an agenda. I just want a good public transportation system like a city with Houston's population SHOULD have. It's okay though sooner or later my generation will win out, just have to wait for the dinosaurs to die out. Only a matter of time.

Maybe. Or maybe they grow up, get married and move to the suburbs like previous generations. We'll see, but I wouldn't bet against suburbia.

[Slick Vik]

Maybe. Or maybe they grow up, get married and move to the suburbs like previous generations. We'll see, but I wouldn't bet against suburbia.

 

I'm talking about building a good transportion system. If the price of gas becomes too high, ironically it will be people in the suburbs clamoring for good transit more than those in the city because their price of commuting will be a high percentage of income.

[Houston19514]

I've put up dozens of links here supporting my views. I'm not some wacko nutjob with an agenda. I just want a good public transportation system like a city with Houston's population SHOULD have. It's okay though sooner or later my generation will win out, just have to wait for the dinosaurs to die out. Only a matter of time.

 

^ Wacko nutjob with an agenda.

[Slick Vik]

^ Wacko nutjob with an agenda.

It's insane to ask for good public transportation?

[august948]

I'm talking about building a good transportion system. If the price of gas becomes too high, ironically it will be people in the suburbs clamoring for good transit more than those in the city because their price of commuting will be a high percentage of income.

I believe we've covered this already, but if, nay when, the price of gas becomes too high other types of vehicles, particularly electric cars, will come into general use. Employers and retailers will move even closer to the population centers on the fringes distributing jobs away from downtown and institute more flexible working conditions. Sure, some extra transit will also come with the deal, but the number of personal cars and the suburbs will remain and grow.

[august948]

I'm talking about building a good transportion system. If the price of gas becomes too high, ironically it will be people in the suburbs clamoring for good transit more than those in the city because their price of commuting will be a high percentage of income.

I believe we've covered this already, but if, nay when, the price of gas becomes too high other types of vehicles, particularly electric cars, will come into general use. Employers and retailers will move even closer to the population centers on the fringes distributing jobs away from downtown and institute more flexible working conditions. Sure, some extra transit will also come with the deal, but the number of personal cars and the suburbs will remain and grow.

[Slick Vik]

I believe we've covered this already, but if, nay when, the price of gas becomes too high other types of vehicles, particularly electric cars, will come into general use. Employers and retailers will move even closer to the population centers on the fringes distributing jobs away from downtown and institute more flexible working conditions. Sure, some extra transit will also come with the deal, but the number of personal cars and the suburbs will remain and grow.

Electric cars are still considered too expensive. Secondly, their infrastructure for charging stations isn't there yet nationwide. Third, downtown's vacancy is at about 0%, it's still a very hot place for commercial real estate. Acting like the city center is going to die out and all the companies are moving to the suburbs is not reality. And what percentage of jobs give flexible working conditions? And if there will be more cars at some point the traffic will be so bad there will be an uproar for some alternative form of transit. How much more freeway expansion can be done?

[livincinco]

Electric cars are still considered too expensive. Secondly, their infrastructure for charging stations isn't there yet nationwide. Third, downtown's vacancy is at about 0%, it's still a very hot place for commercial real estate. Acting like the city center is going to die out and all the companies are moving to the suburbs is not reality. And what percentage of jobs give flexible working conditions? And if there will be more cars at some point the traffic will be so bad there will be an uproar for some alternative form of transit. How much more freeway expansion can be done?

There are many assumptions in those statements. First, electric cars are still too expensive, but hybrid technology is quite common and results in gas mileage in excess of 50 mph city. This could very easily mitigate gas price increases. Downtown vacancy is near zero, but the downtown population is such a minuscule percentage of the population that it really renders that number meaningless.

A more realistic assumption would be that both the urban core and the suburbs will continue to grow at a proportionate rate.

Increases in traffic in Houston have continually led to expansion of job centers outside the downtown core, ie continued growth in the Energy Corridor, a trend which continues. Your statement assumes that trend will reverse, but there is no indication of that happening.

[jt16]

This country peaked oil consumption a couple years ago but is growing domestic reserves significantly. I think waiting for higher prices isn't the starter you're looking for.

But I do think Houston will eventually add commuter rail to the suburbs. I would favor that and favor transit that makes sense. I'm also probably in your generation. I DO NOT favor socialist style mandates requiring some all knowing government to decide where families and individuals should live. You really sound like you have a complex over this. You mentioned earlier you grew up in a suburb. It's like you can't get "urban" enough, whatever that means.

[august948]

Electric cars are still considered too expensive. Secondly, their infrastructure for charging stations isn't there yet nationwide. Third, downtown's vacancy is at about 0%, it's still a very hot place for commercial real estate. Acting like the city center is going to die out and all the companies are moving to the suburbs is not reality. And what percentage of jobs give flexible working conditions? And if there will be more cars at some point the traffic will be so bad there will be an uproar for some alternative form of transit. How much more freeway expansion can be done?

Rewind 90 years and the same could be said about gas-powered automobiles. 90 years ago large companies would have had their headquarters and most, if not all, workers located downtown. That's not the case anymore and it's been trending away from downtown for decades. There's a good reason for that. Real estate is cheaper in the suburbs and workers frequently prefer to live in the suburbs where the houses are bigger and cheaper than in the center of the city. Thus, there is an impetus for companies to locate offices outside the city center for both economic and quality of life reasons.

Spreading out the reason for a lot of congestion (commuting) from downtown to multiple centers of activity in the metro area is a very good way to alleviate the problem. There's plenty of room for expansion of highways outside the city center like Grand Parkway, Highway 6, et al.

[Slick Vik]

There are many assumptions in those statements. First, electric cars are still too expensive, but hybrid technology is quite common and results in gas mileage in excess of 50 mph city. This could very easily mitigate gas price increases. Downtown vacancy is near zero, but the downtown population is such a minuscule percentage of the population that it really renders that number meaningless.

A more realistic assumption would be that both the urban core and the suburbs will continue to grow at a proportionate rate.

Increases in traffic in Houston have continually led to expansion of job centers outside the downtown core, ie continued growth in the Energy Corridor, a trend which continues. Your statement assumes that trend will reverse, but there is no indication of that happening.

 

What percentage of cars owned in are hybrids, even though they have been out for years? I was talking about downtown office space vacancy; a significant percentage of Houston jobs are still located downtown. Increases in traffic will continually lead to gridlock on roadways. More population = more cars = more traffic. 

[livincinco]

What percentage of cars owned in are hybrids, even though they have been out for years? I was talking about downtown office space vacancy; a significant percentage of Houston jobs are still located downtown. Increases in traffic will continually lead to gridlock on roadways. More population = more cars = more traffic.

Market share of hybrids increased from 0.56% of cars sold in 2004 to just under 3.0% in 2012. It's quite reasonable to expect that trend to continue and to have sales of hybrids reach 10-15% by the end of the decade especially as model options continue to increase. A significant portion of jobs does exist downtown, but last I saw, it was still only 6% of the total jobs in the area. While there is definitely growth downtown, there's growth all over town, so I don't really see the overall trend changing.

[august948]

What percentage of cars owned in are hybrids, even though they have been out for years? I was talking about downtown office space vacancy; a significant percentage of Houston jobs are still located downtown. Increases in traffic will continually lead to gridlock on roadways. More population = more cars = more traffic. 

Your belief that things will remain the same forever is myopic. People, institutions, and technology will change to meet the challenge. Some of that might include rail, but more likely it will include changes in how, when and where we work. It's really not that hard to see the trend towards growth of edge cities and away from downtown. Maybe we should consider ourselves lucky that we haven't decided to go counter-trend like Portland.

[luciaphile]

An invariant of this thread is that both sides seem to be betting on some aspect of the status quo: some of you that prosperity continues to increase with population, and that America will have a large base of well-educated and entrepreneurial innovators to rise to technological challenges, as it has the past couple hundred years; Slick Vic, in a no less utopian vein, that the particular concerns -- which go under the rubric of liveability, or sometimes sustainability -- of a momentarily influential group of people will have broad appeal in the future outside that small, and relatively shrinking, and actually shrinking, group.

I don't know. But I do know it's nearly atavistic superstition, or else a touching faith in the powers of your elected municipal representatives, to believe that increasing suburban sprawl is a trend to which Houston, Texas could choose to go "counter."  

 

[livincinco]

An invariant of this thread is that both sides seem to be betting on some aspect of the status quo: some of you that prosperity continues to increase with population, and that America will have a large base of well-educated and entrepreneurial innovators to rise to technological challenges, as it has the past couple hundred years

That's a very fair observation. I base part of my belief in continued innovation on the current pipeline that exists in that area. Many of the innovations that we talk about are well under development and/or are effectively utilized, but have not gone mass-market yet. Hybrid cars have heavy usage in California and that has not spread to the rest of the country yet. It's reasonable to project that trend to occur. There is heavy investment in driverless cars, it is reasonable to expect that investment to continue.

I'm a firm believer that companies will exploit opportunities that can bring them profits. Government's role is to encourage them when those areas match the public interest and to restrain them when it doesn't. Of course, the challenge is that everyone defines the public's interest differently.

[luciaphile]

I like to read books about scientists and engineers, most recently a somewhat (to me) frustratingly-written but interesting story (can't remember title) about the group that coalesced around John von Neumann at Princeton, and the development of the IAS machine.

One takeaway is that we better hope there are still kids out there who like to "tinker," and not virtually.

 

[RedScare]

I don't know. But I do know it's nearly atavistic superstition, or else a touching faith in the powers of your elected municipal representatives, to believe that increasing suburban sprawl is a trend to which Houston, Texas could choose to go "counter."  

 

Yes, some of us find it hard to believe that Suburbia is about to meet its demise when suburbia has not even begun to slow down yet. While it can certainly be argued that Suburbia cannot be sustained in its present form, that argument ignores the fact that humanity changes to adapt its challenges. If gas prices increase, we buy smaller cars and hybrids. If gas continues to increase, we start taking the park&ride. (Side note: some people say that park&ride ridership is low, while ignoring that 40% of downtown workers use mass transit). We could even decide to lay tracks and run commuter rail to Suburbia. Of course, what the new urbanists don't realize is that commuter rail would ensure that Suburbia survives. Otherwise, why waste money on commuter rail if the suburbs are going to die anyway?

 

One small example of how business adapts is to look at Anadarco and ExxonMobil, both of whom are building large office buildings 25 miles from downtown. That is a rather large investment to make in a "dying" area. As they say, I'll believe it when I see it.

[Slick Vik]

Your belief that things will remain the same forever is myopic. People, institutions, and technology will change to meet the challenge. Some of that might include rail, but more likely it will include changes in how, when and where we work. It's really not that hard to see the trend towards growth of edge cities and away from downtown. Maybe we should consider ourselves lucky that we haven't decided to go counter-trend like Portland.

You are the one that says sprawl is just fine and houston doesn't have to make any changes. That is the myopic view.

[Slick Vik]

That's a very fair observation. I base part of my belief in continued innovation on the current pipeline that exists in that area. Many of the innovations that we talk about are well under development and/or are effectively utilized, but have not gone mass-market yet. Hybrid cars have heavy usage in California and that has not spread to the rest of the country yet. It's reasonable to project that trend to occur. There is heavy investment in driverless cars, it is reasonable to expect that investment to continue.

I'm a firm believer that companies will exploit opportunities that can bring them profits. Government's role is to encourage them when those areas match the public interest and to restrain them when it doesn't. Of course, the challenge is that everyone defines the public's interest differently.

Like Texas blocking tesla from selling directly in Texas?