 Aloha, everyone, and welcome to Hawaii Together on the Think Tech Hawaii Broadcast Network. I'm Kilii Akeena, president of the Grassroot Institute. Today we're going to learn some lessons from Houston. Houston is the only city in the country that has virtually no zoning laws whatsoever, or let me put it this way, it's the largest city in the country with no zoning laws. Now, what does that have to do with the Hawaii situation? Well, if you know anything about Hawaii, you know it costs a lot to live here. Our housing costs are exorbitant, some of the highest in the nation. Average house homes, average house prices are about $850,000 for a small three-bedroom home. And we have a large number of people who have to leave the islands because the cost is so great. Well, one of the reasons that our costs are so great for housing is because we have some of the strictest zoning laws in the country. That restricts our zoning, in effect, to about 5% of all landmass being used for housing or urban development. What that means is about 95% of our land is actually not zoned for homes or for buildings whatsoever. Most of it is agriculturally zoned or watershed preserved. And the thing is that much of that agricultural land is not even used for agricultural at all. All of this results in what we call an artificial scarcity of land. That scarcity of land drives the price up tremendously. So one of the reasons we want to look at Houston is to see if what they're doing or not doing in terms of zoning might actually be something applicable in Hawaii, something that might actually help us to get more land developed for the purpose of having affordable homes for everyone. Well, my guest today is an expert in this topic. He has studied the Houston situation and nationally has studied the situations in other cities and urban areas. He is the Senior Fellow and Founding Director of the Center for Opportunity Urbanism. Now, he's going to tell us what Opportunity Urbanism is all about. But I'd like to introduce to you Tori Gaddis all the way from Houston today. Tori Aloha, glad that you're joining us. Aloha, thanks for having me, Gailie. Well, it was great to see you at the Freedom Fest convention recently and just the opportunity we had to talk about Opportunity Urbanism and just address a lot of people who are concerned about zoning and the cost of housing. Now, tell me a little bit about your background. How did the Center for Opportunity Urbanism come about? It started when Joel Kodkin, our director and I sort of were doing some papers and studies for the Greater Houston Partnership, which is the business group in Houston wanted to kind of understand what was working here, what was not working here, what was good about our model. And the more we studied it and the more we understood it, the more we were sort of saying other cities could learn from this. We really felt like we had something sort of different and unique to offer, especially being the largest country, a large city in the country without zoning and kind of what that means in terms of our affordability, our opportunity, the ability for the middle class to afford a home and upward social mobility, which is really the core of what we're trying to do with Opportunity Urbanism. Well, Houston is a huge city. I think the city limits are pretty broad, but you go from about 2.3 million population in your proper urban area all the way to maybe six or seven million people in the broader metro area. Is that right? What kinds of opportunities for seeing how housing should work or shouldn't work arise in such a big city? So in Houston, like we mentioned, we do not have zoning. Instead, we have private deed restrictions. So when a developer takes a piece of land and carves it up for single family homes, he puts deed restrictions that sort of limit what the homeowners can do on that land. Our commercial and industrial areas are essentially not zoned. Now there are still permitting regulations, things around safety and parking and setbacks and some of these other sorts of basic functions. But we don't, as a city or really, and this also applies to all unincorporated counties in Texas, there's no land use authority. They can't say this is only for residential, this is only for commercial, this is only for industrial, the market decides that. And so we have very adaptive land use when it comes to repurposing for higher density, repurposing industrial for commercial or commercial for residential. Houston has been densifying rapidly. A lot of developers have found pieces of land and put in apartment complexes, towers, and it has kept our affordability much better than a lot of the, especially the coastal cities in America or Honolulu, for instance, where, so our median home is only $240,000. And when you look at salaries in Houston on a cost to living adjusted basis, we actually have the highest standard of living among major metros in the country and probably the world just because of the affordability combined with the high pay and the economic development. Well, I've heard your presentation before and I've been impressed by it and I know you attribute to the fact that you have no land use zoning. Some of the benefits you've mentioned such as the high value in terms of lifestyle as well as the low cost of housing. But if I were to put up my Hawaii lenses on and look at your situation the way many people in Hawaii look at zoning, I would be a guest. And I'd say, how can you live in a place where you don't regulate what goes on? Isn't it just utter chaos? How do you determine, how do you get neighborhoods that are pleasant to live in or urban areas for an industry that don't pollute and so forth? Without zoning, don't you have chaos? Well, absolutely not. I mean, we certainly have maybe more of a mixture than you would find in most cities. But the market is really good at regulating things, high value areas. People don't put industrial use because the land is very expensive. We get very high humidity, master plan communities. So developers all around, especially at the fringes by large chunks of land, they privately develop them, they put in the infrastructure. They float what are called mud bonds, municipal utility districts to build out the infrastructure and then put the houses in and they always, because they're competing with each other, hyper competing with each other. They're always trying to one up each other on amenities. So you get all sorts of amenities, swing pools, community centers, you name it. They put them in these communities. And we have some of the highest rated master plan communities in the country, including the Woodlands, which is a famous one that gets studied by planners everywhere and has won multiple awards for a master plan community. So that happens mainly on the fringes. In the center of the city, we have smaller developments. But you would just be amazed, the market really works it out. And then we still do have obviously pollution regulations. There are still permitting regulations, like I mentioned before. So nuisances, we definitely address. It's it's in and then the market works itself out. And and people you don't have a lot of that NIMBY mentality here that you have in a lot of cities. People are just sort of used to, oh, that, you know, strip center just got redeveloped into an apartment complex. And since it's on a major arterial, most people are OK with that. They don't they don't mind. So the city just adapts. And I think people really recognize our affordability. We're certainly not as beautiful as why you guys have are obviously amazingly beautiful. But but it's, you know, I feel like there's a middle ground, at least, between maybe the level of regulation you guys have now, especially if you have so much agricultural land, it's not getting fully utilized and and and maybe a sort of free for all the free market of Houston. Well, you talk about the free market and you say the market works it out. Yet those are scary words to a lot of people because they don't take into account the extent to which many people in Hawaii believe that planning must be done by the government, careful planning, so that we avoid pollution, so that we avoid the overuse of resources. And so we protect that beauty that you were talking about, beautiful landscape, as well as the the preserve of the preservation of the environment, especially for the sake of our water aquifer and so forth. So would you talk to us a little bit more about why and how the market, quote unquote, works it out? Again, it's a matter of you don't have to declare this land can only be used for X. If you have an issue around protecting your water, have water permitting regulations, have sewer permitting regulations, have nuisance addressing regulations. If there are issues around those sorts of things, you build your regulations around those sorts of things, and specifically rather than this kind of blunt hammer of, we're just going to seal off all this land from any kind of development because that's going to create scarcity and that's going to drive up prices and ultimately really harm your population because population and your economy, because everybody's money is going to make their mortgage payments. And that means they can't they don't have money to spend on restaurants, on shopping, on education, on charitable giving, all of these sorts of things that make for a strong community and a high quality of life. They just don't have the money for it because all their money is going into mortgage payments. So I don't know that quite gets to your question, but it's again, it's about setting your regulations around the very specific things you really want to protect and that are important. For instance, outside of Austin, unincorporated counties, there are still regulations around not polluting the aquifer, they have to have the right kind of runoff, the right kind of water and sewer, all those things can be regulated without saying that just nobody can build on any of this land. I mean, you just set the right regulations around the right things that you want to protect and then let the market figure it out and let people live where they want to live. You know, apparently people in Hawaii are following that maximum of living where they want to live and many of them are choosing to live outside of Hawaii. We now have one of the highest per capita rates of exodus or brain drain from the state and that's largely because of our quote, unquote scarce resource of land and scarce resource of housing driving the cost of housing up tremendously. But talk to me a little bit about the population at Houston. You're experiencing the opposite. You're drawing people to you. Your population is actually growing rapidly and you're benefiting from that in many ways. Yes, our metro population is growing about 150,000 a year and we permit enough housing to accommodate that. So our prices don't move that much. And I would think that the good news for Hawaii, I mean, based on the statistics you just quoted, if 95% of your land is undeveloped and only 5% is developed, honestly, you only need to give up one, two, maybe 3% of that land and start allowing that development and that will probably take a lot of the pressure off without dramatically changing the amount of protected land in Hawaii. You would still have 90%, 92% and you just go from 95 to 92 and you guys would open up, you know, go from 95 to 90 and you would double the amount of land you have and therefore, you know, you would take a huge amount of pressure off of your cost of living and your housing and your supply while still having. It's not like you're giving up the last sort of shreds of protected land that would still be more than enough of it. And, you know, the same thing is true in California and obviously in Texas, we still have gigantic swaths of empty open land. People act like sprawl is going forever, but Houston, you know, is is actually denser than a lot of other cities that are more regulated because we allow the market and there is a demand to live in the core. We allow more densification. So for instance, we're more dense and on a whole than even Portland, Oregon, which is, you know, known for their smart growth and their regulation. How do you handle balancing high density areas with low density areas so that you can meet the diverse needs and desires for housing? So when we have protected single family neighborhoods, they're protected by deed restrictions usually created by the original developer, they're enforced by the legal department of the city. So if you feel like somebody is about to break the deed restrictions, you can talk to the city and they'll investigate and file suit as needed to make sure that the single family so that the neighborhoods are well protected. And then outside of that, it's pretty much a free market. So along the major arterials outside of the single family neighborhoods, it could be retail, it could be a strip center, it could be an office tower, it could be an apartment complex, it could be a residential tower. We actually are very multi-centric. We have several essentially downtowns, at least a half dozen to 10 different major job centers, major shopping areas, and the market just sort of works it out while still protecting those single family neighborhoods. So it's not like, you know, the horror story, people say, oh, what if somebody opens a bar next to my house? Well, if you're in a deed restricted single family community, that's not possible. So honestly, the residents are generally well protected. Now there are, you know, some small pockets in the center of the city where they're not deed restricted, and you just have to know that going in before you buy that house. But I would say probably 99% of the single family homes in the city and the metro area are protected. Dory, we're going to take a quick break and then come back. And when we come back, I hope you'll talk with us a little bit about the philosophy behind opportunity urbanism, what goes into the thinking that makes it work, as well as give us some prescriptions as to how we could adjust what we do in Hawaii to be a little bit more like Houston, not in every way, but in the good way. We'll be right back. I'm Keeley Akina. You're watching Hawaii together on the Think Tech Hawaii Broadcast Network. Don't go away. Aloha, I'm Mellie James, host of Let's Mana Up. Tuesdays, every other Tuesday from 11 to 1130. This show is meant to dive into stories of local product entrepreneurs and how they're growing their companies from right here in Hawaii. I'm so thrilled to have our show kicked off. And so please join us on Tuesdays at 11 o'clock as we talk to local entrepreneurs and hear their stories. Hi, guys, I'm your host, Lillian Cumick, from Lillian's Vegan World. I come to you live every second Friday from 3 p.m. And this is the show where I talk about the plant based lifestyle and veganism. So we go through recipes, some upcoming events, information about health regarding your health and just some ideas on how you can have a better lifestyle, eat healthier and have fun at the same time. So do join me. I look forward to seeing you and Aloha. Welcome back to Hawaii together on the Think Tech Hawaii Broadcast Network. I'm Kayleigh Akina. My guest today is Tori Gattis, senior fellow and founder of Center for Opportunity Urbanism in Houston. We're talking about Houston's lessons that can be taught across the country, having to do with lessening the zoning restrictions that are so prevalent in Hawaii and elsewhere. Tori, are you back with us? Great. Yes. I wanted to ask you a little bit about the philosophy of opportunity urbanism. Different regions have embraced different philosophies. For example, environmentalism and smart growth. We hear a lot about that up in Portland, Oregon for a pedestrian experience, aesthetic experience in particular. We hear about that in New York City. We hear about different ways of attracting the elite's gentrification and so forth in San Francisco. So how does opportunity urbanism differ from these other models and what's really at the core of that philosophy? So those were the what you just listed, the smart growth, new urbanism and the creative class. We're sort of three philosophies of cities when Joel and I got started and we were saying, look, we don't believe the purpose, the core purpose of it is any of those three. We felt like it's upward social mobility for your citizens, that that's what a city should be focused on. And just like Portland is the poster child for smart growth or New York for new urbanism or or Austin for creative class or San Francisco. We felt like Houston was sort of the poster child for opportunity urbanism because it's always been a place where anybody can come. Domestic migrants, international immigrants, we have huge populations of both can come and make a life for themselves and really, you know, affordable home ownership and opportunity and build a career. So we gave it the label opportunity urbanism and started a think tank around that. And we've really been promoting this model out to everybody who listen that it's something to look at because when you look at the side effects of some of these other approaches, you get the unaffordability problem. And and it really crushes your population. Your youth can't afford to buy a home. People don't have money for to stimulate the economy. It it really it really hampers you long term to grow as a metro if you if you if you restrict housing supply. You talk about mobilizing upward social and economic mobility for all citizens and their children. Now that's something very admirable. And I think it's something we definitely need in Hawaii. You're talking in essence and really Tory about quality of living. What what kinds of things have happened in Houston in terms of quality of living as a result of opportunity urbanism? Sure. So what we've really sort of done here is I talk about the concept of affordable proximity. You're trying to kind of maximize this affordable proximity, which means you've got a good housing supply and you've got good mobility. And so therefore your cost of living is reduced. You can afford a home within a reasonable commute from work. When your cost of living goes down, your cost of living adjusted incomes go up and that creates more discretionary income. And when you have discretionary income, that creates more economic activity. You can also pursue more education. You can start a business. You can support charities. You can save up the down payment for a house when you have that discretionary income. And it creates this virtuous cycle where people take the discretionary income. They spend it on amenities, things like restaurants, entertainment, sports, you name it. And then that makes your city more attractive to more migrants moving there because they're like, wow, look at all these great amenities, great restaurants. I want to move there. They move there and then they start adding their income and you get this sort of virtuous cycle effect of discretionary income kind of pumping up the quality of life and the standard of living in that metro area. But it really starts with most cities do try to do economic development to attract high paying jobs. But there's the other piece of the equation they ignore, which is keeping the cost of living low. Because what really matters is the spread between those incomes and that cost of living is what determines the discretionary income that can kind of flow through the economy of that city. And that creates the opportunity and the upward social mobility. You've kind of tracked a cycle of development that takes place with opportunity, urbanism. There is, at the beginning stages, opportunity for more education that leads to a better job, that leads to some entrepreneurship and some business as well. And all of that leads to the ability to afford the kind of home people want and that just continues in a cycle as more people get into this circle. Absolutely. That's exactly it. We kind of identified the four things that people need to move for upward social mobility. It's sort of better education or a better job or home affordability. Those sorts of things, the ability to start a business, those are the sorts of things that help people, for instance, I mean a ton of international immigrants move here and then they start a restaurant because it's very easy to start a restaurant in Houston. With the lack of zoning, it's easy to get the permits. They can find a space. We have one of the most hyper competitive restaurant scenes in the country. Zagat says that Houstonians eat out more per week on average than any other city at the lowest average cost of any major city. And of course, the lower cost is part of why we eat out so much is because it's just so affordable to go out to eat and eat great food because we don't restrict the number of sites that are allowed to have restaurants in the city. It's a free for all. And so if you have even kind of B quality food, you're not going to be in business very long. And so this sort of survival of the fittest happens among the great restaurants. And you get great, really fantastic restaurant scene. And Houston's been getting a lot of recognition for that in a lot of different places, a lot of awards. GQ said we're the capital of southern cool. And they were specifically commenting on our amazing restaurant scene. So that comes kind of directly and indirectly from the lack of regulation and zoning, allowing sort of the competition to make things better and to improve the standard of living and the quality of life. Tori, I'm sure you remember back in the 70s, there are all these population models. Paul Ehrlich and the population bomb and Thomas Malthus was revived to the Club of Rome. And it seems as though that talk has been revived again, particularly in Hawaii. I saw a bumper sticker the other day that said, come visit Hawaii and go home. In other words, let's not increase our population. And I know that even in Houston, there are limits to population growth in the mind of a lot of people. But what should our mindset really be toward increasing population? And what's the experience in Houston? So there's been a lot of studies of, well, done in Houston in any city. And what they've shown is that when you can double the population of a city, you get a 15% increase per capita in innovation, economic activity. Per capita happens. And then you only need 85% instead of doubling the amount of resources you need to support that population, you only need 85% more resources. So actually allowing your population to grow increases economic opportunity and reduces the things you're specifically mentioned. The resources needed to support that population. So if you really care about sort of saving the planet, you should absolutely allow more densification, larger cities, more intensive development, because that is far more efficient than people spread further out or being forced to migrate to other states or elsewhere where they're not as concentrated. That's less efficient. Both it gives them fewer job opportunities. They're less productive in the economy. There's actually been some studies that say that it has actually cost the US economy trillions of dollars that more people can't live in the hyperproductive cities like San Francisco or New York or some of these other ones because their regulations are so high that people don't live there. And if they could live there, they could make a lot more money and be more productive members of society and the economy, but they just can't afford to live there. Well, even like consultant for a few minutes before you close now, we've got soaring costs of housing in Hawaii, one of the highest costs of living, one of the fastest rates of growth in our per capita and the exodus from our state and so forth. What are some prescriptions for a state that is highly zoned and filled with all kinds of land use regulation? Where do we start? What could we learn? I would say the three kind of low-hanging fruit opportunities I could see, obviously it's hard to get rid of zoning entirely, but I think there are three things you could do. One would just be to stop protecting so much unproductive agricultural land. If it's not being used for agriculture, why not let it become residential development? The second would be when you obviously need to protect single family neighborhoods, but when you have commercial areas, allow those to develop high-density residential sort of by right. There should be no reason somebody couldn't buy a strip center and tear it down and put up an apartment complex. That will help add to your supply and it really shouldn't affect the character of the neighborhood if it was already a commercial piece of land. And then I think probably the most important one would be allowing something that Minneapolis recently did and Oregon did, other places are looking at. They got rid of the single family zoning designation and said, look, the new designation for those neighborhoods will allow by right duplexes, even triplexes, accessory dwelling units. It doesn't change the character of the neighborhood, but all of a sudden now on the same piece of land instead of being limited to one family, two families can live there or three families can live there and you create a ton of housing without fundamentally changing the character of those neighborhoods. And that's really a pretty broad stroke thing that could be done that would add up the potential to add a lot of housing supply very quickly would be just changing that single family housing zoning designation in addition to freeing up the commercial zones and freeing up some of that agricultural land. And it doesn't have to be a whole lot like we've talked about before. I mean, honestly, one or two percent of that agricultural land could add a tremendous amount of residential capacity to Hawaii. Well, that sounds as though it makes a lot of common sense and I hope that our lawmakers in Hawaii will be open to that. Center for Opportunity Urbanism, what are the kinds of activities you do and what kinds of resources do you make available? I'm always available for consultation. I do speeches, as you saw in Austin. I'd be more than happy to come to Hawaii and give a talk and then write papers, reports. All of our materials are available at OpportunityUrbanism.org. And you're welcome to take a look at our reports. I also read a blog called Houston Strategies, HoustonStrategies.com, which has a lot of the similar things. And feel free to reach out to me in either of those places. My contact information is there. And I would I would be happy to talk to anyone who's interested in pursuing more of these kinds of policies. Tori, just for our audience on air, would you state your website address? OpportunityUrbanism.org Or if you just Google the Center for Opportunity Urbanism, it'll pop right up. And then my blog is called HoustonStrategies. It's just houstonstrategies.com. Very good. Tori, thank you so much for being with us today. I do hope to see you in Hawaii sometime soon. Mahalo, as you say. I would love to see you sometime soon. Mahalo. And aloha. And everybody out there watching, this has been a fascinating introduction to OpportunityUrbanism, a different way of thinking that could actually solve many of our problems in Hawaii. And as you heard, Tori, say, we don't have to go from development on 5% and massively increase the development beyond that. It might just be one or two percentage points that can increase the land available and allow us to grow our population base to become all the more effective and efficient in order to meet our needs. I'm Kaylee Akeena with Think Tech Hawaii's program, Hawaii Together. Until next time, aloha.