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Free Enterprise City

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Title: 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).
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