Houston Business Journal: Houston Doesn't Need More Class A Apartments

[ChargerCarl]

People are so used to large American cities fucked up housing markets that they've forgotten what a properly functioning one actually looks like.

[C.]

Originally Posted by ChargerCarl

People are so used to large American cities fucked up housing markets that they've forgotten what a properly functioning one actually looks like.

I agree with this.

[mhays]

Outside the US, I'm mostly familiar with the London and Vancouver markets. Those are straight-up insane even by US standards.

What is a proper market supposed to look like?

[ChargerCarl]

Japanese cities as a whole have surrendered themselves to market forces more than any other when it comes to development (and even transit), so I'd have to go with them.

edit: Japanese vacancy rates:

http://japanpropertycentral.com/2014...-high-of-13-5/

Houston's vacancy rate is about 7% I think, so low for Japanese standards.

(I did this in a hurry so please correct me if Im wrong)

[TexasPlaya]

Houston is barely keeping it's head above water and that's due to the population and subsequent institutional boom. I've been trying hard to get my foot into the door into the booming Texas Medical Center but a lot of O&G folks got the same idea. For grins, I looked into an apartment downtown and next door in midtown, all the new apartments are essentially giving away 2 months free.

[jg6544]

Originally Posted by austlar1

High rise living for the wealthy has been well established in Dallas (and to a lesser extent in Houston) for three or four decades now. The high rise corridor along Turtle Creek in Dallas is not particularly new. There is a robust market there for high end units that are often quite palatial. There is also a substantial market in Dallas for smaller (under 1200 sq. ft) units downtown and in adjacent areas. There is a lot of Class A office space in the area filled with corporate tenants, banking tenants, law firms, accounting firms, ad agencies, etc. A lot of the people who work in these environments are not necessarily the type of people who need or want a typical suburban style home. Also, since there is now a pretty good light rail network centered on downtown Dallas, it is possible to live in the vicinity of a light rail station and commute to other job locations without using a car. There are many huge office and commercial developments located along the routes of at least two of the light rail lines. The transformation of downtown is slowly taking place. The adjacent Uptown area is a bit further along in that regard. It is a genuinely nice neighborhood, lively and filled with amenities.

Thanks for the explanation. I haven't even visited Dallas in over 25 years and it has been longer than that since I visited Houston. When I knew those cities, people worked downtown and lived in the suburbs (commuting by car for the most part). The notion of people living in the old Mercantile National Bank building strikes me as odd. There were a few high-rise residential towers along Turtle Creek in Dallas and one out on Loop 12 right around Preston Rd., but that was pretty much it. Don't know Houston that well. Things have obviously changed.

[ThePhun1]

Originally Posted by jg6544

Don't know Houston that well. Things have obviously changed.

Not much, there are many more master planned McMansion neighborhoods that ring the city and suburbs than there were a quarter century ago. However, it is very possible for any urban enthusiast to carve a niche in the center of the city now days, that is very true.

[austlar1]

Originally Posted by jg6544

Thanks for the explanation. I haven't even visited Dallas in over 25 years and it has been longer than that since I visited Houston. When I knew those cities, people worked downtown and lived in the suburbs (commuting by car for the most part). The notion of people living in the old Mercantile National Bank building strikes me as odd. There were a few high-rise residential towers along Turtle Creek in Dallas and one out on Loop 12 right around Preston Rd., but that was pretty much it. Don't know Houston that well. Things have obviously changed.

Yeah, well, it is still Dallas. The built form in the center and north end of downtown look a lot different. It is much more attractive, but there is still just a smattering of pedestrian activity like you might find in more traditional cities. Take a Google tour and be amazed at the fact that there does not appear to be anybody walking around in most places.

[Bikemike]

Petroleum is an unsustainable industry, and it's been the basis of Houston's likewise unsustainable (and unsustainably designed) building boom

Unfortunately for Houstonians, Repubs have difficulty learning.

[ThePhun1]

Originally Posted by Bikemike

Petroleum is an unsustainable industry, and it's been the basis of Houston's likewise unsustainable (and unsustainably designed) building boom

Unfortunately for Houstonians, Repubs have difficulty learning.

The primary industry may tank but the economy is pretty diverse around here. As a matter of fact, for the sake of this board, higher gas prices may be a major blessing in disguise as it'll force some of suburbanites in closer for more urban living.

[TexasPlaya]

Originally Posted by ThePhun1

The primary industry may tank but the economy is pretty diverse around here. As a matter of fact, for the sake of this board, higher gas prices may be a major blessing in disguise as it'll force some of suburbanites in closer for more urban living.

Houston does well when the world is doing well (O&G, manufacturing, and logistics). O&G will obviously not last forever, but the industry still has a bit.

My biggest hope for meaningful economic diversity comes from education as there's been good progress and some good things coming down the pipe.

[ChargerCarl]

Originally Posted by Bikemike

Petroleum is an unsustainable industry, and it's been the basis of Houston's likewise unsustainable (and unsustainably designed) building boom

Unfortunately for Houstonians, Repubs have difficulty learning.

1. I'm pretty sure the Dems do pretty well in Houston
2. Houston's growth is still strong

[Bikemike]

Originally Posted by ChargerCarl

1. I'm pretty sure the Dems do pretty well in Houston
2. Houston's growth is still strong

1. Obviously, by "Houston" I would only be referring to the CSA which leans strongly Republican, not solely by presidential election results but also by congressional representation. Wealthy, educated liberalism doesn't exist in Texas outside of Austin, and poverty is the main driver of Houston's Left.
2. Houston's diversified since the 90s, but not that much. Even now, the majority of its growth is still tied to petroleum extraction. Hence the abrupt slowdown in its economy resulting from the global oil glut. The slowdown in Houston is by no means secular, and is uniquely Houstonian for a reason.

[Bikemike]

Originally Posted by TexasPlaya

Houston does well when the world is doing well (O&G, manufacturing, and logistics). O&G will obviously not last forever, but the industry still has a bit.

My biggest hope for meaningful economic diversity comes from education as there's been good progress and some good things coming down the pipe.

The only reason this is true (World doing well = Houston doing well) is due to global reliance on fossil fuels. Pretty simple statement of a general truism: any economy that produces an economic good does well when the world also does well. This is only a revelation for captain obvious.

But the current slump in Houston doesn't imply the reverse, i.e. that the world is doing bad (even though it is). Rather, Houston's economic slump is directly tied to the slump in the price of a single commodity - oil. Houston's continued over-reliance on a single item, oil, is to blame for its current woes.

Houston boosters please spare your inaccurate portrayal of today's Houston as being super-diversified. Just look at how closely its slowdown is tied to oil prices to see exactly how unspectacularly diversified Houston still is. Proof and pudding. Basically, in 2016 Houston is still OPEC's bitch.

[ThePhun1]

I don't think anyone is arguing that Houston's economy is super-diversified, just that it has a diverse enough economy to survive a slump and not morph into Detroit South within a few years.

[C.]

No question O&G is an economic base for Houston, but it's wrong to say it's not diversified. Health and education are big drivers, too. Top 50 employers per http://hereishouston.com:

1. Memorial Hermann Healthcare System*
19,500 employees

2. Continental Airlines, Inc.*
16,000 employees

3. The University of Texas M.D. Anderson Cancer Center*
15,000 employees

4. ExxonMobil*
13,000 employees

5. Shell Oil Company*
13,000 employees

6. Kroger Company*
12,000 employees

7. National Oilwell Varco*
10,000 employees

8. The Methodist Hospital*
9,991 employees

9. The University of Texas Medical Branch at Galveston*
9,318 employees

10. Baylor College of Medicine*
9,232 employees

11. HP*
9,000 employees

12. ARAMARK Corp.*
8,500 employees

13. Chevron*
8,000 employees

14. Pappas Restaurants, Inc.*
8,000 employees

15. HCA*
7,855 employees

16. BP America, Inc.*
7,387 employees

17. Macy’s
7,000 employees

18. Baker Hughes Incorporated*
7,000 employees

19. AT&T*
6,900 employees

20. ExxonMobil Chemical Company - Baytown Chemical Complex
6,500 employees

21. The Dow Chemical Company, Freeport*
6,100 employees

22. H-E-B*
6,000 employees

23. St. Luke’s Episcopal
Health System*
6,000 employees

24. Texas Children’s Hospital*
6,000 employees

25. Halliburton*
5,748 employees

26. EPCO, Inc.*
5,700 employees

27. Fiesta Mart, Inc.
5,500 employees

28. KBR*
5,089 employees

29. LyondellBasell Industries*
5,080 employees

30. CenterPoint Energy*
5,000 employees

[mhays]

Sooo, not terribly diversified. At least it's not obvious from that list.

Hospitals, retailers (meaning stores, not HQs), etc., mostly just shuffle money that's already local. Diversification is about industries that pull money from elsewhere.

Continental is the main example. And it's not very big. In the Seattle area it (and even Houston's #1) would be the #4 employer, below three that pull money in globally, not locally.

[C.]

Originally Posted by mhays

Sooo, not terribly diversified. At least it's not obvious from that list.

Hospitals, retailers (meaning stores, not HQs), etc., mostly just shuffle money that's already local. Diversification is about industries that pull money from elsewhere.

Continental is the main example. And it's not very big. In the Seattle area it (and even Houston's #1) would be the #4 employer, below three that pull money in globally, not locally.

What about education? It looks like Houston has a large number of jobs associated with education. It's a resilient industry in the face of a recession as enrollment soars from folks who are laid off and decide to return to school full time and others who may have reduced hours use the time to learn a new job or take a new career path.

I also strongly disagree with you on the hospitals comment. Hospitals are a huge economic multiplier. Some background: http://www.aha.org/content/11/11econcontrib.pdf

[jg6544]

Originally Posted by austlar1

Yeah, well, it is still Dallas. The built form in the center and north end of downtown look a lot different. It is much more attractive, but there is still just a smattering of pedestrian activity like you might find in more traditional cities. Take a Google tour and be amazed at the fact that there does not appear to be anybody walking around in most places.

I assume that's the weather. Who wants to walk around in that heat for six or more months out of the year?

[Bailey]

Originally Posted by Bikemike

1. Obviously, by "Houston" I would only be referring to the CSA which leans strongly Republican, not solely by presidential election results but also by congressional representation. Wealthy, educated liberalism doesn't exist in Texas outside of Austin, and poverty is the main driver of Houston's Left.
2. Houston's diversified since the 90s, but not that much. Even now, the majority of its growth is still tied to petroleum extraction. Hence the abrupt slowdown in its economy resulting from the global oil glut. The slowdown in Houston is by no means secular, and is uniquely Houstonian for a reason.

Are you sure about that? Both the city and county voted for Obama both times.

Houston has had a democratic mayor in power since what, 1982?

Local politics is a totally different animal.