Issue 12
Words by

Houston, we have a solution

7th September 2023
26 Mins

Houston was notorious for its sprawl. But it has seen a gentle density revolution since the 1990s. Allowing neighborhoods to opt out of citywide reforms was crucial in its transformation.

Houston is rarely held up as an example of good land use planning. The Texan city, as recently as a few decades ago, famously had a downtown area consisting largely of car parking. But over the last 25 years, without the rest of the world noticing, things have been quietly changing. Downtown is no longer just a giant car park. The city has become a little more walkable. Pleasant rows of townhomes have appeared in the suburbs, alongside amenities like new parks, restaurants and entertainment, and light rail. Housing has remained remarkably affordable and accessible, even as the wider economy boomed and the population rose drastically. 

What happened? Houston is commonly thought to be a clumsy success in affordability, brought about by its lack of zoning. The truth is more interesting. The city’s planning authority implemented reforms that gave landowners automatic permission to build new townhomes, subject to certain conditions; alongside an opt-out system for local residents who do not want these changes to their area. This policy changed the face of the city, for the better. And yet this has largely gone unnoticed by the rest of the world, even those that are struggling with the same problems that Houston has overcome. Houston may have something to teach us on land use planning after all.

Space City

Founded in the 1830s at the confluence of the Buffalo and White Oak bayous, Houston sits next to the Galveston Bay on the Gulf of Mexico. It forms one corner of the ‘Texas Triangle’, alongside Austin and San Antonio, and Dallas–Fort Worth. Famously, Houston is an oil town. It also has one of the world’s busiest seaports, the Port of Houston, and NASA’s Lyndon B. Johnson Space Centre, which hosts ‘Mission Control’ for all of America’s manned space flights.

Houston had always been a relatively welcoming city for new residents. From the 1970s, it was designated a resettling site for Vietnamese refugees, paving the way to having the second largest Vietnamese population in the United States. Following Hurricane Katrina, Houston took in 250,000 evacuees, of whom tens of thousands stayed permanently. Even now, Houston resettles more UN refugees than any other American city, and indeed more than most countries. 

Houston has for a long time bucked national trends. Real house prices in Houston tumbled along with local incomes during the late 1980s, when the local oil industry took a beating from a global oil glut. But, remarkably, house prices and rents in Houston have remained low, even as the metropolitan area population increased from 2.4 to 6.7 million and the economy returned to booming. By 2021, they were still 23 percent lower in real terms than their 1980 peak. By contrast, inflation-adjusted prices in New York increased by 147 percent and in San Francisco by 216 percent, rendering those cities increasingly inaccessible for those on lower and indeed even higher incomes.

Houston downtown, 1970s, after many of the buildings were demolished, and Houston downtown more recently.

Space City made space. But how?

This town is big enough for the both of us

Historically, Houston mostly made space for new residents (and old) by growing outwards. The city is a byword for urban sprawl and car culture. It is rarely held up as an example of ‘good’ planning, despite its success restraining house price and rent inflation. 

It’s sometimes said that Houston has ‘no zoning’ – in fact, it’s the first thing the city planning department says on its website – but it is not strictly true. Unlike many cities, Houston does not have a comprehensive set of rules determining how every plot of land can be used, whether residential or otherwise. But it does have regulations limiting what you can build and where. Houston’s Code of Ordinances – its planning rulebook – sets limitations like minimum lot sizes (how big a plot of land must be used for each residential property), how far the building must be set back from the street, requirements for the number of parking spaces that must be included with the development, and much else. Historically, this set of regulations, which require a lot of land for each property, combined with the city’s permissive attitude to building outwards, led to Houston’s characteristic sprawl.

In 1998, a major change was made to the Code of Ordinances. The minimum lot size of a plot within the I-610 motorway which circles Houston’s inner suburbs was dropped from 5,000 square feet – about the size of a professional basketball court – to 1,400. This allowed landowners to divide (or ‘replat’) existing lots into much smaller parcels. The reform also changed the rules around property setback from the street, reducing the minimum required from 25 feet to as little as five feet. Whereas previously a landowner with a 5,000 square feet parcel would have generally been constrained to build one home, set back far from the street and with a lot of land surrounding it, now they could build three homes, for three times as many families. 

Why did this happen? Builders had started putting forward more frequent applications for replats into smaller lots in the more central suburbs. Initially the city’s planning authority had considered these on a case-by-case basis. But the planners realised that this demand for centrally-located homes presented an opportunity to achieve some of their own goals: supporting urban renewal, improving walkability, and reducing pressure on the environment. Then-planning and development director of the city council, Robert Litke, emphasised that the denser development patterns would improve the urban aesthetic and create pedestrian use of sidewalks that would encourage more amenities to open.

So, rather than continue to process large numbers of replat applications one-by-one, the city redesigned the Code of Ordinances to enable these replats by right, removing the need to apply for each individual replat. Houston’s planners saw market demand as something which could be harnessed to enable desirable patterns of development, rather than a force to be battled with.

While the local Houston Chronicle newspaper did describe the reforms as ‘controversial’ and involving several months of debate, at the time it only ran a handful of articles covering them (one of which also described the reforms as ‘reasonable’), suggesting the reception was, at least by the standards of planning debates in some other US cities, muted. 

The reforms have survived to this day – 2023 marks the twenty-fifth anniversary of their implementation – and, as further evidence of their popularity, were even extended into the suburbs outside of the I-610 motorway in 2013, meaning they cover the entirety of the city’s 671 square miles (Greater London covers just over 600 square miles). Despite the reforms being overwhelmingly liberalising, they did not draw the level of public ire that pro-housebuilding reforms typically do. Something about them was amenable to local residents. We’ll come back to this later.

Effects of the reforms 

The immediate impact of these changes was a boom in a new style of development that has transformed some of Houston’s inner neighbourhoods: Houston townhomes. These homes, while generally still detached, are taller and narrower than the low-density suburban-style homes that are more typical of Houston’s twentieth century development pattern. They sit closer to the sidewalk and occupy smaller lots, though regulations in most areas of the city still require at least 1.66 parking spaces per two-bedroom apartment. Emily Hamilton estimates that almost 80,000 townhomes have been developed owing to the changes; all using previously developed land, and in the types of central locations where it is usually most difficult to build.

Houston townhomes in Rice Military. 
Image from Google Maps.

Some of Houston’s neighbourhoods were totally transformed. Rice Military, an area originally consisting of mostly small bungalows and shotgun houses, built up rapidly and is now a vibrant area known for attracting young creative types and having good walkable access to restaurants, bars, and parks. It might surprise readers to know that Houston, synonymous in many people’s minds with car-centric America, is now mid-ranked among American cities on the Foot Traffic Ahead walkability ranking, with its substantial improvement acknowledged in the latest report. In the 1990s it was the only major city in the United States without a rail system; it now has three light rail lines operating and two more planned.

Houston may not be the city that springs to mind when you think of ‘gentle density’: the mid-rise, mixed-use type of development that characterises how cities developed organically prior to the twentieth century. But take a walk around Houston’s inner suburbs and you’ll find surprisingly dense patterns of development, some even having a slightly European feel. 

Malone Street, Houston, Texas – in April 2015 (above) and 2011 (below).
Images from Google Maps.

The 1998 reforms, alongside Houston’s generally liberal approach to planning, helped to preserve housing affordability in the central neighbourhoods of the city, with the median townhome costing an estimated $313,000 in 2017, and the twenty-fifth percentile at just $156,000. Life is better for renters as well, with thousands of apartments available for less than $900 a month, unimaginable in many other cities within the US.

Consider: You could rent this very nice 1 bed apartment right in the centre of town for $1275 per month. Or buy this townhouse for $275,000, built in 2004 under these very reforms. Hundreds of each are available.

Houstonians live in bigger, better housing than New Yorkers or Californians, and they do so much more affordably. Increasingly, they do so in pleasant, walkable environments, although the city still retains its legacy of somewhat unusual land uses like multi-storey car parks or warehouses next to suburban homes. Indeed, what was once ‘renowned worldwide as the global citadel of carbon-based fuel extraction’ is now an ‘unexpected and almost entirely unheralded success story’ of urban renewal and better environmental planning, according to Jake Wegmann at UT Austin’s School of Architecture.

Why was it possible?

The good news is that other cities can follow Houston’s lead and get the same results. The bad news is that cities, regions and indeed countries that have tried to fix harmful elements of their planning systems face enormous political challenges in doing so, and often fail. 

To get better land use, you have to allow better land use. But generally, existing homeowners form a powerful interest group who apply pressure to their local governments not to permit more building in their area. This is a widely studied challenge in political economy, and it can become an all-encompassing matter at the level of local politics. So why was Houston able to pass these reforms?

It may be tempting to attribute the reforms to some freedom-loving, anti-government aspect of the Texan character. Indeed, Houstonians have rejected proposals to introduce a zoning system via referendum three times: in 1948, 1962, and again in 1993 (potentially aided by a slightly lower proportion of homeowners than other American cities). And perhaps the Texan character does come into it. M. Nolan Gray, author of a recent book on American zoning, told me that Houstonians he spoke to really did value the right to decide how their own land is used. But Houstonians can be as hostile to new developments in their neighbourhood as residents of any other city. So it’s not just the local character that’s different.

What most makes Houston different is that it had an in-built system to allow residents of small geographic areas to opt out of citywide zoning rules, and of changes to those rules. This opt-out system may explain why city-wide reforms were able to pass, and why they have had the staying power to last several decades relatively uncontroversially. 

As mentioned earlier, Houston sets relatively limited rules about land use at the city level. Instead, many rules around land use are set within private ‘deed restrictions’. These are private agreements between landowners within blocks or small areas. When you buy a home in Houston, it may come with deed restrictions determining how you can use the land. These deed restrictions can contain many of the usual limitations on building we see in other planning or zoning systems, including height, density, building type, and (although fortunately no longer enforceable) even the type of person who can live there

If violated, deed restrictions in Houston can be enforced by the city at the request of neighbours, normally via their homeowners’ association, or HOA. HOAs are private entities, widespread across the USA, generally established by developers or landowners when they build a new housing development. Membership of the HOA is normally mandatory when you buy a home from that development, and members must pay fees and abide by their HOA’s rules. Typical examples of HOA rules would be restrictions on signage outside properties, or requirements to maintain the yard to a certain standard. Some HOAs also handle shared responsibilities like external maintenance of an apartment building or swimming pools. In Houston, HOAs ensure that deed restrictions on land use are enforced.

Because these deed restrictions can specify if the lot has additional restrictions to the minimums set by the city-level code, Houstonian homeowners already had an institutional mechanism if they wanted to prevent new types of development near them, regardless of what happens in the citywide Code of Ordinances. If they didn’t want smaller lots to be permitted in their area, they could agree collectively via the HOA to add new deed restrictions.  

In 2001, new legislation was passed to make opting out even easier, by allowing local homeowners to petition the city to introduce a special minimum lot size (SMLS) even without going through the legal process of altering the deed restrictions. These are restrictions which limit new developments to the prevalent lot size, by block or by area. For example, if 70 percent of the lots in an area consist of large detached homes on 5,000 square feet of land, 5,000 square feet can be established as the minimum lot size, keeping new developments in the area restricted to large detached homes. 

The petition needs to attract 51 percent support from local homeowners, or less than 51 percent support and no objections against. Assuming the area meets some relatively simple criteria, it is approved automatically.

As a result, Houstonian homeowners who really don’t want new homes built near them don’t need to worry as much about the overall citywide rules. They have a much easier route nearer to home: they can agree with their neighbours in the HOA to alter the deed restrictions, or they can petition for a special minimum lot size. 

While there is no comprehensive map of which areas are subject to deed restrictions (as they are private agreements), Houston Homeowners Association President Mike O’Brien estimated in the late 1990s that only a third of the land within the I-610 had restrictions. Since then, small areas of the city have adopted SMLS designations, leaving the vast majority of Houston open for development on smaller lots.

The outlined areas have re-established the higher minimum lot sizes through private agreement.

This opt-out system is probably the main reason the 1998 reforms were able to pass in the first place. Cities across the world have been locked into vicious battles over densification policies – and even in the cases where they successfully pass, the pressure to repeal them can be overwhelming. 

In Santa Monica, California, the city council was forced by the state government to permit more homes. They initially resisted by failing to adopt a compliant plan, before finally conceding by rezoning some commercial land for densification. Even then, they have petitioned state government to be allowed to reverse their own reforms and continue to seek legal routes to prevent the developments that got through while their plan was non-compliant. 

In Christchurch, New Zealand, plans to allow three-storey homes on most of the city met with enormous resistance and were pared back. A densification plan in London’s Croydon initially passed before being beaten back by a new administration. This is not to say these policies were not or would not be successful in improving housing outcomes; simply that they are harder to implement and harder to keep implemented.

Most planning systems find themselves unable to break past homeowners’ (and sometimes other residents’) instinctive fear of, and opposition to, liberalising reforms. Houston is one of the few that has managed to do so, and with relative ease.

Why does it work? 

For those who want to see more housing built, opt-outs may be uncomfortable. Wealthy areas can and have excluded themselves from accepting new developments nearby. Only homeowners have a say in the homeowners’ association decisions or petitions for a special minimum lot size, excluding renters from the process. Instinctively, it feels unfair. And for anyone who has interacted with planning in other places, it seems unlikely that allowing homeowners a veto over new development will be good news for renters. But in Houston it seemed to work, delivering better and more affordable results for all residents, renters included. It worked for a number of reasons.

Firstly, Houston’s system allows homeowners to opt out without bringing housing supply in other areas down with them. When homeowners who want to prevent some development nearby are required to have this battle at a higher geographic level of political decision-making, there is a risk that their attempt to stop even one building results in policies that prevent it across a much larger area. 

In London’s Camden, a proposal to redevelop a shopping centre into mostly mid-rise apartment buildings was met with attempts to make it harder to build taller than surrounding buildings across the entire borough. In nearby Enfield, a local MP has run a years-long campaign to preserve train station parking facilities, in response to a proposed development on a car park used by her constituents in the neighbouring borough. It may not be the intent of these campaigns to prevent all housebuilding; they just want to prevent it near them, and they will pull whatever lever they feel is easiest to pull. Houston’s opt-out functions as a mechanism that does not allow people in pursuit of limited goals (‘Stop this development near me.’) to cause harm on a much larger scale. (‘Stop developments of this kind near anyone.’)

Houston’s system is considerably better at taking the views of residents into account than most planning systems. In systems where decisions ultimately lie with local governments, there is a risk of players that are unrepresentative in their backgrounds, interests, and preferences dominating the debate. And generally, they are playing on easy mode: they are recruiting people who live directly nearby them. In political economy terms, they are the archetypical concentrated interests against the diffuse interests of the many. As a result, they can force decisions that other residents are opposed to or even simply uninterested in.

But the opt-out system changes these fundamentals. Under it, these campaigners have to prove at least a minimum level of agreement, or lack of disagreement, across their community. It is a far cry from systems where relatively small and typically unrepresentative groups are able to successfully lobby for wide-reaching restrictions on new housing. If the opponents of development really do have majority support, they can achieve an opt-out via a vote, but often they do not, and this mechanism makes that clear.

Perhaps most cleverly, Houston’s system places the cost of additional regulations on the people who want them imposed. One of the key features of other planning systems is that existing homeowners typically lobby against new development. By restricting their neighbour’s new building, they can prevent any of the annoyances that come with development, and conveniently enhance their own property value in the process. The cost of this decision is then paid for not by them, but by the neighbour who doesn’t get to build a new home or extend their existing one, local renters and homebuyers who have to pay more for housing, and taxpayers across the city who lose out on the tax receipts from development. 

When it comes to blocking development, the homeowner gets the benefit at everyone else’s expense. So even if there would be overall net benefits to all homeowners (and renters) from a general policy of densification, if you are starting from the position of all developments being banned, a homeowner has an incentive to oppose each one nearby, even if they may want to redevelop their own plot. Breaking out of this is a coordination challenge which at the scale of a city or a country is extremely difficult – as the entire history of planning has shown – but breaking out of it at a street or block level, less so. 

What this means in a practical sense is that a Houstonian homeowner can opt to have more stringent restrictions on what gets built nearby, but it affects their own property in an obvious and direct way. If they want to set a minimum lot size of 5,000 square feet in their block, they can; but their own property will be worth less should they choose to sell it in the future. So they must decide: what’s worth more to me, the additional value to my property from the right to replace one home with two, or preventing my neighbours from having the same right? Different people come to different conclusions here. Houston allows them to, and it turns out many people don’t mind development next door as long as they have the same option. The benefits, and the costs, of additional regulation are therefore better aligned.

Another crucial feature of Houston’s planning system is that private deed restrictions are often time-limited. Restrictions on land use in Houston typically have sunset clauses of 25–30 years. This is a smart workaround for the problem that many planning systems face, where stacks of rules, often conflicting or at least not designed to operate holistically, are added incrementally. The end result is an extraordinarily complex and ineffective system where disputes are often resolved in court, even if this is unlikely to be the intent of the people who implement the rules. Sunset provisions are used widely across legislative and regulatory fields, and they can be highly effective: states that use sunset programmes reduce their spending at the state level but increase the level of government services provided, suggesting that the sunsets help to weed out bad policies while preserving good ones. Similar benefits were seen in London’s Great Estates, where lease renewal dates were strategically timed to permit rebuilding.

Much like how the Houston opt-out system prevents individuals from imposing their own preferences on neighbours who don’t share them, sunset clauses do this for future residents. In other places, a restriction preferred by a few residents can not only be imposed on much larger areas, it is also imposed on them indefinitely, long after the residents with the preference are gone. It is simple for people who want to renew local development restrictions in Houston to renew them, but crucially they have to show they want to (and take on the organisational cost).

The effectiveness of Houston’s planning may be aided by its property taxation system. Texans do not pay a state income tax, but in return they pay some of the highest property taxes in the States. Houstonians pay relatively high levels even within Texas, with annual rates typically around 2–2.5 percent of the property value and, after various exemptions are applied, the median payment is around $4,000 per year. These huge property taxes explain the recent trend of shockingly well-fitted new Texan schools on TikTok, and help explain why Texans are so relaxed about new neighbours – they pay their way. This is in stark contrast to housing-constrained California, which has a constitutional cap on property taxes

What we can learn from Houston

Aside from the importance of setting up incentives well, Houston demonstrates a high degree of predictability and transparency in its planning decisions. It operates under what is called a ‘shall approve’ system; if something meets the requirements of the limited set of zoning-like rules in the Code of Ordinances, it will be automatically approved, and within a short timescale; as little as two months for a replat. These timescales are likely to be unachievable for discretionary-style systems. But there is a clear lesson for politicians and planners that these rules-based systems are not less palatable to the general public. Many fear that by removing endless opportunities for consultation and vetos, they will face backlash. But Houston deals out permissions quickly and predictably, and Houstonians have consistently rejected moves to full zoning via referendum, suggesting the status quo is not unpopular.  

Houston’s use of sunset clauses reveals a different understanding of the role of planning. Many see planning as being about finding the golden set of policies that maximise the goodness of a city – city-building games for real-life technocrats. But in reality, planning has always really been a process of negotiation between different interests, a fundamentally political process. By taking the technocratic understanding of planning, we assume that our policy decision should be permanent. But by understanding it as a political negotiation, we see it as more of a steady and changeable process of working out the best practical solutions to our spatial problems. 

Feagan St, Houston.
Google Maps

For city authorities, another lesson is that you get what you plan for. Some, especially within the UK planning context, treat urban sprawl as something that developers inevitably push for, perhaps in response to public demand for car-centric lifestyles. But the Houston example shows that some of the most famously car-centric urban environments in the world are often a direct result of the planning policies imposed by local governments. Set large minimum lot sizes, open space requirements and parking requirements and you will get sprawl. Take them away and you get a much more natural pattern of development, with denser urban cores. 

For central governments, there is a lesson in ensuring that decision-making is made at the right level. The OECD has emphasised that land-use decision-making powers are best managed by metropolitan levels of government, rather than lower levels. This is because obstructive stakeholders are more likely to be able influence lower levels of government. But what Houston proves is that good land-use decisions can be made at lower levels, if they are low enough to generate the coordination opportunities discussed above. Houston’s limited rules are set at the metropolitan level through the Code of Ordinances, benefitting from a strategic citywide view, but also at block or small area levels, so that it doesn’t end up affecting the city as a whole – striking the best of both worlds.

For planning reformers, Houston’s case emphasises the importance of reforms being popular, or at least not unpopular. The Houston reforms were not only self-sustaining over a period now approaching three decades, they were extended too. Pro-housing campaigners are often locked in lengthy battles over the piecemeal removal of harmful rules, but as Mike Manville, associate professor of urban planning at the UCLA Luskin School of Public Affairs, describes it, ‘Planning rules can be like hydra heads… You get rid of one and it doesn’t really matter because two grow in its place.’ Planning reformers can easily end up in a never-ending war of attrition over individual rules, when the decision-making process is often the more impactful target.

Houston’s policy approach is not perfect. It doesn’t operate in an ideal world where everyone’s interests and needs are weighed up and burdens distributed fairly. But it is a good example that the perfect can easily be the enemy of the good. Houston’s system works, delivering housing affordable enough for even those on below-average incomes to become homeowners, and hopefully will continue to work. If you need to make concessions to get a good policy, that is superior to a perfect policy you never get.

There are examples of policies that take these lessons elsewhere: both operating and proposed. Within the UK, proposals to let individual streets opt-in to gentle densification offer an opt-in alternative. Similar has been proposed in Ireland, which faces extreme challenges with housing supply. Seoul’s Joint Redevelopment Projects and Israel’s TAMA 38 are examples of how this might work to deliver more homes in practice. These opt-ins need not even be limited to homeowners: estate ballots in England have enabled tenants of social housing to vote in favour of redeveloping their estates, winning themselves new high-quality homes and facilities. These show that even opt-in systems, which might seem less ambitious, can achieve substantial positive-sum benefits. Opportunities to find win-win solutions exist in many places; decision-makers just need to know to look for them. In New Zealand, the opposition National Party has threatened to throw out new density-enabling rules should they come into government – if they really must, why not consider an opt-out instead?

The future for Houston

Houston’s experience reforming minimum lot sizes shows the importance of understanding the nature of local opposition to new building. Cities must ensure their planning decisions are actually representative of the interests of the people they impact. Policies that ensure the costs of regulations are borne by those that demand them, that make use of sunset clauses, and that improve the predictability and efficiency of decision-making can go a long way in delivering this.

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