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

Houston Chronicle Sunday - - OUTLOOK - 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

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