How Texas Averted the Great Recession
COST Commentary: As discussed in the article below, all major Texas cities, including Austin, avoided most of the housing bubble’s major run-up in housing prices and the “crash” which was a major contributor to the recession. As noted in this article, land use restrictions are major contributors to house price increases. In Austin’s case, much its economic success was not so much due to Austin’s initiatives and policies as it was to rapidly growing, surrounding counties and towns which provided “relief valves” of less restrictive land use policies. The less restrictive land use policies of these surrounding jurisdictions tended to temper the impact of Austin’s increasingly restrictive land use regulations which are increasing the costs of development and housing. However, Austin still has the highest ratio of median home price to median household income for major Texas cities and current policy directions will exacerbate this important affordability index.
Why is this important to transportation? Land use, transportation/mobility, congestion and quality of life are very linked. As demonstrated in many cities, higher density living results in greater congestion and highr prices for housing.
The Capital Area Metropolitan Planning Organization (CAMPO) is the official planning organization, required by US government regulations, for the Austin region’s transportation system. For the first time, this plan has changed its primary focus from transportation to land use with the goal to change human behaviors which they have determined is best for the citizens. Its recently approved 2030 Transportation Plan is based on encouraging higher density living and the use of public transit to reduce roadway mileage and driving per capita. More than 50% of the 2030 Plan’s funding is allocated to public transit and non-roadway uses serving less than 1% of the passenger miles traveled in the area. The results of implementing this plan will be increased congestion and reduced quality of life for most citizens of the region, unsustainable costs and taxpayer subsidies for transit users and major decreases in affordability of housing. Many cities have followed a similar path, and, in each case, it has resulted in greater congestion, higher costs and lower quality of life for citizens.
Hopefully, the realization that Texas Cities have done a lot of things correctly will enlighten enough people that this ill-advised 2030 plan will not be implememnted and a greater portion of our transportation funding will be allocated to the roadway priorities of the people and not to the perceived, ideologically driven needs determined by misguided government employees and elected officials.
by Wendell Cox, Demograplhia
Texas has received considerable publicity for superior economic performance during the recession (the “Great Recession”) and the fact that the “housing bubble” had very little impact in the state. The performance of Texas has been particularly favorable compared to its other largest state competitors, California and Florida, both of which experienced severe economic and housing market distress. One of the factors that helped Texas avoid both the Great Recession and the housing bubble was its market oriented land use policies. By contrast, where land use restrictions were more restrictive (California, Florida and other places), house price increases were far more substantial, as was the subsequent price collapse.