The future of superstar cities and Houston, CA’s problems, warehouse glut, why tech in HTX?

Hope everyone’s staying safe and warm during this way-way-way-too-cold Valentines+Presidents Day winter storm.  The lead item this week is a really interesting piece my friend George sent me on the future of superstar cities by Matthew Yglesias.  I think his observations are directionally correct, but he’s missing some pretty important nuances.

First, he’s completely ignoring extended family pulls that bring people back to regions.

Second, he’s seeing everything thru the lens of the footloose and fancy-free celebrity rich (the Matt Damon and NBA references), and that is an incredibly tiny part of the population. His alternate lens is 20-something tech startups – also a pretty narrow niche.  Normal people have family ties and different reasons for picking places.  A lot of the NYC/LA amenities he thinks are so key aren’t that valuable to families, and they’re the ones most likely to leave.

Third, he’s ignoring the *relative* impact of remote work.  NYC and LA have a mix of people who want to be there for lifestyle and have to be there for work. Once the work reason is gone, a lot of them have left and will continue to leave (look at the Wall Street types moving to Miami). The lifestyle people may stay, but those cities are still declining relative to what they were when they could hold onto both groups.  They will face massive budget deficits which will push them to raise taxes which will push even more people to leave.

As far as Houston, we’re not on the national media radar, but I have personally seen a *ton* of out-of-state plates around recently. The media forgets that they don’t drive most people’s location decisions – it’s what they hear from friends and family, and most Houstonians like it here and plug it to their extended friend/family networks (including talking about the kind of home they can afford), and those friends/family decide to move here based on that recommendation.  But obviously the weak oil industry is not helping, and the GHP is absolutely right we need to diversify our economy and build our innovation economy (my latest idea for that).  But our core engine is a good sustainable one – not oil, but having a great lifestyle (esp restaurants) at an affordable price (from lack of zoning) that people tell their networks about. As long as we sustain and keep improving that, we will keep growing, even as ‘hotter’ cities like Austin and Miami become ever more crowded and unaffordable.  As long as articles like this are being written about us, we’ll do just fine:

Moving on to this week’s items:

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Houston. Houston has done it right. (one of my more popular tweets) More of these cities should look to our model for handing rapid growth without unaffordable housing.

“Conservatives do not resist many regulations of the sort seen in California because we want cities to be horrible or because we secretly are in the pockets of developers who for some reason want their cities to be horrible; rather, we are skeptical of such schemes because they tend to create artificial shortages, distort markets and investment decisions, and prevent solutions from emerging organically. “Markets work!” is cartoon libertarianism, but you know what? Markets work. And if you don’t let them work, you end up with artificial scarcity, high prices, and rationing.”

Hear, hear!

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“In some ways, Houston is anomalous. Its business-friendly regulation puts very few restrictions on building. “There’s no zoning,” said Ryan Byrd, a principal of Colliers International Houston. “If there’s land that doesn’t have a pipeline, wetlands or is in a flood plain, you can build a building in less than one year.”