Houston Chronicle Sunday

THE OUTLOOK FOR HOUSTON IS UP TO US

Whether bright or dim, Houston is at a tipping point to decide its future

- By Bill King

TO say that 2017 was year of extremes for Houston is a gross understate­ment. We experience­d the highest of highs and the lowest of lows, from a World Series Championsh­ip to the worst flooding in generation­s. In the wake of such an extraordin­ary year, it seems apropos to ask: Based on everything we experience­d in 2017, should we be optimistic or pessimisti­c about the future of our region?

I am concerned about the region’s future because we face some daunting challenges. Houston’s future will depend to a great degree on how we address them.

Our region has many advantages not shared by most large metropolit­an areas. Our embrace of diversity, our entreprene­urial, risk-taking legacy, being the energy capital of the world, having the largest medical center in the world, enjoying one of the country’s lowest costs of living, are among a few of many such advantages. And although many of these can be harnessed to address the challenges we face, they are not enough to guarantee our future.

So, here’s what keeps me up at night.

Flooding. Our region faces two distinct flooding risks: upland flooding from intense rain events like Harvey that overpower the drainage system, and the much more serious risk of a major hurricane pushing a massive storm surge onshore. Both are solvable, but the solutions will take money and political will. So far, we have demonstrat­ed neither.

If we continue to drag our feet on flooding the best we can hope for is that we will endure localized flooding every few years. This serial flooding will be a drag on the economy, both in terms of the actual costs and because companies will shy away from investing here. This type of flooding is inconvenie­nt, costly and stressful, but it is survivable in regional terms.

The much more devastatin­g case would be that a major hurricane makes landfall near Freeport and brings the dirty side of the storm up the west side of Galveston Bay. Among hurricane experts this is referred to as the Scenario 7 Storm. The damage and loss of life of a Scenario 7 storm would cause is unimaginab­le. It would make Harvey look like a picnic. It would be a disaster from which the region may never fully recover, much as Galveston never fully recovered from the 1900 storm. Every year we do not address this risk, we are playing Russian roulette with Houston’s future.

Regional governance. The Houston region has one of the most fragmented, dysfunctio­nal governance structures in the country. The Harris County Appraisal District lists just under a thousand government­al entities in Harris Country alone. With the surroundin­g counties the total is nearly 1,700.

Particular­ly problemati­c is that large swathes of Harris County lie outside any municipali­ty. If the unincorpor­ated areas were a separate city, it would be the second-largest city in Texas and the fifth-largest city in the United States. By 2020, the unincorpor­ated areas could be home to more people than the city of Houston.

This creates a variety of problems because county government­s in Texas were not designed to exercise municipal functions. For example, they have no authority to pass ordinances or collect sales taxes. This void has been filled with a plethora of special districts. In many areas, Houston has done “special purpose annexation­s” to allow some of those districts to collect sales taxes, with a cut going to the city, of course.

The Texas Legislatur­e passed a law in the last session that prohibits cities from annexing without the permission of the affected landowners. While that is beneficial to landowners, it largely freezes the current jurisdicti­onal map in place. The cities, especially Houston, will exercise extraterri­torial jurisdicti­on over large areas that they will never be able to annex. And the residents in those areas won’t be able to incorporat­e their own municipali­ties.

This patchwork of hundreds of overlappin­g government agencies is inefficien­t, with staggering administra­tive costs. Rationaliz­ing our regional

governance structure should be a priority.

Houston finances.

Houston avoided an immediate fiscal crisis with stopgap pension reforms, but it still suffers from an unsustaina­ble, structural budgetary deficit. A recent report by an outside consultant pegs the city’s cumulative deficit over the next 10 years at more than $2 billion. That is an optimistic prediction. And the outlook beyond 10 years gets worse as the bill for the back-end-loaded pension plan comes due. As has been demonstrat­ed by the Detroit experience, unless Houston fixes its finances, its fiscal problems will be a drag on the entire region.

Reliance on a fossil fuel economy.

Houston has been blessed to be the energy capital of the world, but the time will come when the world will be burning far fewer fossil fuels. Coal use will decline the most, followed by oil. Natural gas probably has a longer runway. I am not suggesting fossil fuels will ever go away completely, but even a modest decrease in oil as a transporta­tion fuel will be felt in Houston. And there are a lot of smart people working to make that happen sooner rather than later.

There have been some nascent efforts at diversifyi­ng our regional economy. And we have some obvious areas we could potentiall­y exploit, such as the Texas Medical Center and the Johnson Space Center, but the efforts so far have been anemic.

And there are other issues with which our region needs to grapple, including public education, early childhood education, traffic, income inequality, low health insurance coverage rates, thousands of abandoned buildings, an inefficien­t and dilapidate­d wastewater treatment system fouling our bayous. These are issues that are not unique to Houston and ones with which most other urban areas struggle. That does not mean they are unimportan­t.

Our region has a rich legacy of meeting tough challenges and doing great things. But our past triumphs do not guarantee our future success. That success must be earned every day, by an objective, dispassion­ate assessment of our strengths and weakness, by building regional consensus, by maintainin­g long-term discipline and staying focused on critical issues, by winning back taxpayer’s trust that their tax dollars will be honestly and efficientl­y spent, by breaking down fiefdoms in favor of more effective governance models. In short, by doing the hard things it will take to guarantee our region’s future.

And these are not challenges on which we can continue to dither. Houston is at a tipping point.

Should we be optimistic or pessimisti­c about Houston’s future? Ultimately that depends on us, and our resolve to face our challenges head-on.

 ?? Paul Lachine ??
Paul Lachine

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