Free Enterprise City

1
Free Enterprise City

• Joel Feagin 1988

2
Ecological Model

• Decentralizing suburbanization process in
  metropolitan areas is viewed as reflecting
  desires of individual American homeowners for
  affordable housing and better physical
  environment, as expressed within the free market
  system. Transport technologies are important in
  urban centralization and decentralization.

3
Favorable Free Market practices

• Good business climate low tax ,
  laissez faire free market approach limit social
  service spending, including subsidized housing,
  limit zoning weak regulation of real estate,
  anti-union laws, government officials sympathetic
  to business,
• In 1963 Texas Hwy., Department. Sec. of commerce
  Hodges, said traffic problems solved by providing
  better roads for cars, not by restricting the
  number or caliber of cars We shout a here,
  here!' let's construct those better roads out of
  asphalt so they will cost less to build and thus
  be easy on taxes -- at same time providing more
  roads for more cars to travel more miles and use
  more petroleum products."

4
Houston and the Built City

• There is a close relationship between character
  of capitalism in particular historical period and
  its urban form. Office buildings are at the heart
  of physical structure of modern capitalism,
  providing places where administrative,
  accounting, and other white-collar activities of
  dominant corporations and allied business service
  firms are located and interrelated

5
Houston and the Built City

• Larger corporations tend to build, or have built,
  tall skyscrapers. Why tall skyscrapers? Tall
  buildings are considerably more expensive to
  construct than are shorter and wider buildings
  with same amount for space. It is estimated that
  collar office towers cost at least 20 more per
  square foot than an equivalent building with
  fewer floors. The high price of land often
  justifies creation of super -- skyscraper in
  downtown areas however savings on land costs do
  not offset of premium building cost for a
  high-rise building. Wittenberg has reported on a
  major office project in downtown Houston land
  cost 12.5 million about 10 of the total cost
  hundred 127 million of the building itself plan
  costs was no more than the cost of expensive
  elevator system for this high-rise structure.

6
Since World War II Total Sq Footage of Office
Space in Houston
1949 6.9 million
1959 12.3 million
1969 18.6 million
1979 85.2 million
1985 159.2 million
1986 163.5 million
7
Houston and the Built City

• Reason for high-rise buildings does not seem to
  be high cost of land in downtown Houston area
  instead, high-rise towers have been constructed
  to facilitate integration of large corporations,
  and symbolize corporate presence and dominance.
  To quote urban theorist Lamarche, "they are first
  and foremost physical expression of concentration
  of capital and have close ties linking
  headquarters of industry and financial world."
  Office buildings are not simply products of an
  architects imagination but rather a geographical
  solution to integration of modern capitalism

8
Political Economy Model

• Local residents have paid a heavy price for low
  tax, laissez-faire, free market approach of the
  citys business leadership (3). While Houston is
  advertised as premier free enterprise city, in
  reality the citys business leadership has
  regularly taken major governmental (handouts) for
  projects that support/create profit-making in city

9
PEM continued

• Federal intervention in form of subsidies of home
  mortgages, highways, oil production, and
  decentralized airports significantly encouraged
  urban de-concentration by reducing cost of
  decentralized suburban development. Urban
  processes such as suburbanization are not
  natural result of automobile technology and
  free-market forces but rather result of
  intentional actions by powerful economic and
  governmental actors seeking particular goals in
  specific socio--- historical settings

10
Houstons Political Economic History

• Houstons political economic history is recurrent
  intervention of local and federal governments in
  Houston economy usually at behest of local
  business elites
• Houston began in the 1830s as speculative real
  estate venture by two northern capitalists ,
  brothers JK Allen and A.C. Allen.
• Lumber, grain, cotton commodities generated an
  important infrastructure of railroads,
  warehouses, cotton jeans, and banks servicing
  southeast Texas agricultural economy.

11
Houstons Political Econ History

• Cotton was sold to English buyers in return
  European goods bought by local merchants were
  sold to Texans. Some cotton merchants functioned
  as bankers, loaning large sums of money to local
  planters before there were organized banks in
  area.
• Cotton society had great inequalities in income
  and wealth. From beginning Houston was class
  stratified, with a small wealthy elite, a large
  poverty-stricken population, and substantial
  middle income sector. In 1850s black slaves
  labored at worst jobs in city. Between 1815- 1860
  a share of wealth held by richest 10 of
  population increased from just over half to more
  than two thirds.

12
Houstons Political Econ History Early 1900s

• By early 1900s Houston was sheltered harbor
  closest to the ranches and cotton fields of
  Midwest and central south. By 1912 no less than
  17 railroads use the city as a rail hub. Texas
  was producing two thirds of all cotton in the US,
  much shipped through Houston, which had six
  cotton seed processing mills

13
Houston Oil and Autos

• The developed infrastructure of port facilities,
  railroads, and banks actually creating the
  infrastructure foundation for Houston subsequent
  dominance as an oil center. Investment decisions
  made in Detroit spurred investment by oil
  companies and transformed Houston into an oil
  capital Until auto production accelerated in
  1904 1919, crude oil had been used for
  kerosene, fuel oil, lubricants. In 1899 only 3700
  autos were built in US, but by 1909 figure had
  grown to 126,600, and by 1919 to 1.7 million.
  Coal had fueled rise in US industry and 19th
  century, but by 1910s and 1920s oil was beginning
  to replace coal as fuel choice

14
Houston During Civil War

• The 1860s brought devastation to many cities in
  south, most destructive effects of Civil War did
  not reach Houston instead, war made Houston into
  significant Southern marketplace and brought new
  wealth to local elite. After war cotton became
  main product in trade. Cotton first put Houston
  on international economic map(49). By 1860s
  city Council increased efforts to provide
  infrastructure for development grading and
  surfacing streets, building bridges, franchising
  private companies for gas-lighting and horse
  cars. Between 1860s and 1880s basic foundation
  for Houston business elites approach to
  government was laid down

15
Local and Federal Govt Aid

• Under pressure from local growth coalition, U.S.
  Congress in 1902 appropriated about 1 million in
  public investment capital for local port
  development A few years later Houston
  capitalists met in the mayors office to work out
  a plan for further subsidization(55). In 1910
  Congress approved 1.2 5 million for deepening
  Houston ship channel, reportedly largest grant
  for such developmental purposes made by the
  federal government up to that time

16
Local and Federal Govt Aid cont

• Between 1918 and 1938 US government expended 56
  million to dredge deep water ports at 12 Texas
  coastal cities, including Houston. Houston
  ranked fourth among US ports in total exports
  tonnage by 1930
• In 1933 Pres. Roosevelt issued an executive order
  banning interstate shipment of oil pumped in
  violation of Texas program pro- rationing laws
  the agents were sent to Texas to enforce order.
  Governmental intervention and continuing federal
  support for pro-rationing among petroleum
  companies operated from 1930s to 1970s to protect
  industry.

17
Federal Subsidies Dual Role

• Federal subsidy had helped create oil industry.
  But this subsidization or not was not the only
  source of federal underwriting of petrochemical
  and oil refining sectors of American industry.
  Federal government purchase and consumption of
  products of these industries was crucial to
  long-run profitability and prosperity. Big
  government in US was not primarily created by
  the new deal social programs of the 1930s but
  rather by massive industrial and military
  buildups of World War II

18
More State Aid 1950s -1980s

• Late 1950s to the 1980s in 1959 Pres.
  Eisenhower set quotas for imported oil, limiting
  imports to 12 of domestic production, a decision
  justified in terms of national defense this
  action helped to hold up domestic oil prices. The
  government engineered differential probably cost
  US consumers millions of dollars during the next
  decade

19
Reorganization and Restructuring

• In decade ending in early 1970s number of
  multinational oil companies shifted subsidiaries
  to Houston or buttressed existing operations
  there. Shell relocated its US administrative
  headquarters from New York to Houston. Exxon,
  golf, and Texaco consolidated domestic operations
  in Houston. As Anthony Sampson put it it is in
  Texas, not New York, that Exxon feels more
  thoroughly at home and it is Exxon skyscraper in
  Houston, the headquarters of Exxon USA, which
  seems to house the soul of the company.

20
Reorganization and Restructuring cont.

• Oil and chemical companies were heavily
  subsidized by federal government energy policy
  in 1970s and early 1980s, government kept price
  of gas artificially low and thus feedstock for
  petrochemical plants and very cheap, situation
  European manufacturers complained about.

21
History of Zoning Struggle

• Houston is unique among major cities in US it
  has no traditional zoning laws to control
  patterns of land use
• First they revealed depth of conservative
  laissez-faire philosophy among citys leaders,
  even when that philosophy interferes with other
  interests of the leadership, such as protecting
  elite residential neighborhoods from commercial
  encroachment. Second, failure to implement zoning
  accents power of real estate and development
  capitalists in city, these interests have
  traditionally been most consistently opposed to
  zoning

22
Zoning and Land Use Patterns

• Lack of zoning has meant a larger than average
  number of oddly mixed land uses massage parlors
  are built across street from churches, office
  towers are erected in backyards of wealthy
  suburbanites At broadest level the city's
  land-use map is similar to the spread city
  pattern, and to many Sunbelt cities.

23
Zoning and Land Use Patterns

• Lack of zoning means Houston developers generally
  face less red tape and shorter project
  development times. In a city with strict zoning
  and planning, such as Dallas, might take a year
  or two to get a plan for a mega structure project
  approved, but in Houston sometimes takes only six
  months.
• 1959 budget was 176,785 there were 20 full-time
  employees city population was just under 1
  million.
• 1980 budget was 920,000 with a staff of 60 in a
  city that exceeded 1.6 million. Inadequate
  staffing reflects weak commitment of city's elite
  to planning

24
Houstons Short Term Planning

• In early 1980s Browning -- Ferris industries, a
  private disposal firm, was doing solid waste
  planning for city. Public decisions have often
  been delegated to private firms which, journalist
  Burke notes, "are really extensions of City
  Hall." In general city departments, such as
  public works, have been known for their
  operations with developers and other real estate
  interests (163).
• If city cannot provide utility services, a
  developer can create, with governmental
  permission, a municipal utility District (MUD)
  with the authority to sell bonds for utility
  construction. In fact developers decide where
  water, sewer, and other utility systems will be
  extended next -- a type of privatized planning
  (164).