In my last column I explained why the city of Houston, Texas, was proving largely immune to the collapse in housing prices and the consequent crisis in the US sub-prime lending market, mainly because it has no central planning department imposing metropolitan urban limits, restrictive zoning and similar constraints on the supply of land.

For some, this absence of central planning means that Houston is a city “out of control”, subject to the irrational vagaries of the market, with no integration of land use and transport, and hence highly inefficient – and so on and so forth.

Nothing could be further from the truth.

Urban economists recognize that zoning arose to compensate for the absence of insurance policies against “nuisance”. Land-owners find it difficult to insure against the loss of their property value which can result from incompatible use of neighbouring land.

The use of zoning to prevent such “nuisance” is legitimate, and lay behind early regulation of land use, especially in residential neighbourhoods. Unfortunately, in recent times, central planners have seized on zoning as a tool to direct and control the use of land throughout the region, and, more recently, to shape and control some mysterious entity called “urban form”.

The citizens of Houston have been smart enough to hold onto the virtues of “amenity zoning” while nullifying the powers of the “Smart Growth” central planners. The city has no power to zone land – and any attempts to take on such power have been consistently rejected by citizens’ referenda.

On the other hand, Houston’s neighbourhoods are largely controlled by “Homeowners’ Associations” which operate under their own sets of “deed restrictions” that control nuisance and secure amenity. Almost all residential developments of any size have an established set of deeds which control bulk and location, materials, minimum size of building, site coverage and so on. Many of these deed restrictions are more onerous than anything a city council would impose, but Houston’s citizens accept them because they are “their rules” and they can change them if they so choose. Different neighbourhoods have different packages and there is a wide choice. Furthermore, much of the city is free of any such restrictions and so those who demand total freedom, restrained only by common law, still have plenty of sites to choose from. These deed controls are not unfamiliar to New Zealanders.  Apartment blocks typically have a body corporate enforcing all manner of rules, and which require financial contributions from the owners. For some reason these vertical “gated communities” are quite acceptable to our own planners, and yet these same planners are typically hostile to their horizontal equivalents. For some reason, a key-pad in the foyer of a high rise apartment is OK while a key pad controlling admission to a low density suburban development is an offense against the “decently planned society”.

So it goes.

During my visit to Houston there was much fuss about a high-rise apartment being build next to a very plush community of single family homes. The pro-zoning elite were using this as an argument for a comprehensive city plan complete with zoning and the usual host of regulations and controls.

However, people who buy into a neighbourhood controlled by a Homeowners’ Association  know very well that the edge properties are vulnerable to such unexpected activities and hence sell at a considerable discount. Buyers pay their money and accept the risk.

Rather than being a city without a “plan”, Houston is the city of ten thousand plans – all firmly under the control of the local residents. These are not unique to Houston of course. Some 260,000 Homeowners’ Associations manage the local neighbourhoods of about 50 million Americans.

Furthermore, when new developments take place outside the city limits, their infrastructure services come under the control of a Municipal Utility District, or MUD, which is governed by elected representatives who have the power to raise taxes to manage and maintain the local utilities. There are hundreds of these MUDs but they normally end up being annexed by the city as it expands into the countryside. Many say these MUDs provide a better service than the larger cities that eventually take them over. Go to the web page of Harris County MUD 23 for some typical information.

Clearly, Houston’s “bottom up” approach to governance is the exact opposite of the model favoured by those promoting the “Super City” model for Auckland.

However, in the absence of land use controls directing and controlling the use of land, one might expect to see all manner of uses scattered around in some untidy jumble.

Surely, chaos must prevail?

Well, chaos does prevail, because urban economies are what mathematicians call dynamical chaotic systems and their behaviour, while unpredictable, is also best described as deterministic chaos.

Such systems, which we find throughout the universe, and in life itself, generate spontaneous order. Hence the universe has no need for a “Universe-design Committee” and life itself has had no need of central planners to manage its development.

Houston is a splendid example of such spontaneous order. After taking lunch at “Mark’s”, a famous restaurant in a “made-over” church, I decided to walk back along Westheimer Road and take in the neighbouring “do-up” district. On both sides of the road, entrepreneurial traders had turned a host of old bungalows into retail stores of various shapes, styles and sizes, selling second-hand furniture, décor items, minor antiques, outdoor furniture, garden plants and equipment, along with small groups of factory shops making up curtains, shelving and the like.

It would be easy to imagine this district had been “zoned” accordingly, but if it had been “zoned” the supply would have been constrained by high land prices, and a host of rules would have prevented the mix and match of all these different activities whose only shared activity was the final purpose of the goods.

Some of the old front yards were used to display garden furniture, some had been turned into outdoor cafés, while others were simply full of “stuff” under some kind of temporary cover.

This down home collection of “do-up” and second-hand shops was only a mile or so along Westheimer Road from the Galleria District which features all the top-end fashion and other luxury stores, most of which are concentrated in “The Galleria” – the fourth largest covered mall in the US with 2.4 million square feet of retail space including 375 fine stores and restaurants, an impressive ice rink, and two hotels.

So big stores do not drive out small shops provided both are allowed to find their own place in the sun. The central planners of Wellington who want to ban big malls to prevent any competition with the CBD should take note.

If I had wanted high value antiques I could have gone to the Art District. If I was feeling hypochondriac I could have visited the massive Health District. The museum District contains forty museums, Pasadena is the “refinery district” and the five “central” business districts make Houston a classic multi-nodal city, more like London than New York.

The planners have focused on the development of an excellent network of motorways and arterial streets, including toll roads, and have generally made sure that the city actually works, rather than being besotted with visions of how it should “look”.

And you know what? Houston looks just great.

1228 words

Publication date Friday 13^th June