HOUSTON – (Realty News Report) – Houston is known as the world capital of space exploration, the world capital of air conditioning, the world capital of the international energy industry and the world capital of petroleum exploration. It might also be known as the world capital of Master Planned Communities (MPCs) — residential developments that include an unusual number of recreational amenities such as parks, golf courses, lakes, bike paths, and jogging trails. MPCs are very large scale; the number and variety of amenities clearly separates it from a normal plan for a housing subdivision. Thousands and thousands of acres to the north, south and west of Houston have been earmarked for MPCs which became popular because Houston was the largest city in the country without zoning. Where are the MPCs headed in the years ahead? Did some of the development of MPCs contribute to the flooding following Hurricane Harvey? How has the Grand Parkway affected residential and retail development? Realty News Report sat down with one of the city’s leading MPC experts — David Jarvis, Senior Vice President John Burns Real Estate Consulting – to find out where MPCs in Houston are heading.
Realty News Report: Houston is known for its Master Planned Communities. How are MPCs changing in Houston?
David Jarvis: You might ask, how has Houston changed the MPCs! As far as I’m concerned, Houston is where the MPC was born. Maybe one was born in California, but they go so far back in Houston that I consider Houston their birthplace. And they grew into prominence in Houston because of a need. The ancient Greek philosopher Plato reportedly said, “Necessity is the mother of invention.” And that’s true in Houston. Houston is well known as the largest city in America without zoning. Some people have described the city as one giant unmade bed. As a resident here, you would go to the suburbs usually to buy a house and move into a master planned community. There have been some awesome MPCs who have had good shepherds like the late energy entrepreneur George Mitchell who started The Woodlands. Mitchell – who is known as the father of fracking — envisioned what those 28,000 acres north of Houston could become. The Woodlands is one of many, examples of awesome MPCs in the area that included schools and retail and residences — what you get in a lot of cities around US but that maybe we didn’t get enough of in Houston, MPCs became a tremendous part of the Houston landscape. At one time, MPC commanded 50% of all home sales in the city. Now 30-35% of the all the homes sold in Houston are in MPCs.
Realty News Report: How are MPCs like Cinco Ranch area addressing growth and mobility issues? How have they helped the city?
David Jarvis: In Cinco, the Grand Parkway gave it better access than it had prior to State Highway 99 going through and again that was unique. Cinco was built of back on a brand new amenity package called a Beach Club. It has a four-acre lagoon. The Beach Club, the first amenity in Cinco Ranch when the community opened in 1991, is still a big draw for residents. Cinco Ranch has 11 swimming pools plus lakes, and playgrounds. We never had seen anything like that! What’s a Beach Club doing in Katy? But the developers put up money and brought something new. That’s one of the attractions of MPCs. They not only bring planning and organization, but enormous amount of infrastructure.
Realty News Report: Have MPCs in Houston evolved over the years? How so?
David Jarvis: MPCs like The Woodlands have grown up to be their own economic driver, their own economic engine. They are not only dependent on jobs from Houston itself.
Realty News Report: What about the future of Master Planned Communities? Some say development contributed to the flooding from Hurricane Harvey. What are your thoughts? Others say we need denser development.
David Jarvis: We believe MPCs continue to have a big future. Millennials are growing up, paying down student debt, and thinking about where they want to live when they get married and have children. So where do they want to live? The suburbs. They want to raise their and families in a MPC because of the schools and way of life. When people move to Houston, they don’t know where they will live until they arrive and most pick a MPC.
Realty News Report: How can the city avoid severe flooding that it experienced from Hurricane Harvey? Did the flooding damage Houston in the eyes of the world?
David Jarvis: Houston has always had a flooding problem, although Hurricane Harvey was very severe. I talked to an engineer about the problem and he told me how little clay soil can absorb water and how it compares to concrete. It’s about water penetration through clay silt and water penetration through concrete. The problem is getting rid of the water. It’s called conveyance – a system that directs water from the source of supply. The conveyance system transports the water from the main affected area elsewhere. Houston didn’t have conveyance during Harvey. It didn’t have the ability to channel the water away from Houston. There was a plan in 1940s, to help solve this. The Addicks and Barker Cypress reservoirs developed out of that plan, and there were channels planned to move water north and around the city to the Houston Ship Channel. But those plans didn’t get fully executed. So, we knew in the 1930s and 1940s that it was time for conveyance. Why didn’t Houston implement conveyance – widening the conveyance channels not just deepening them to make them work? Well, for Buffalo Bayou, you’d have to make it wider and people don’t want you to take the trees. We are 75 years behind the times – from the early 1940s plan. Who knows what happened? Maybe World War II got in the way. Maybe the civil engineers were digging ditches everywhere else in world instead of building infrastructure in the U.S.
Realty News Report: Has the Grand Parkway been a game changer for the city?
David Jarvis: Definitely. It brings the city closer, so I can go all the way out I-10 and look for a house or land a job. Or go way out 290 and get to Beltway 8 where there is new development. We have 7 million people in Houston and the question is where we are going to live. We have to life, Houston is unique, we have multiple Central Business Districts, including Downtown, the Galleria, Westchase, NASA, The Woodlands. By virtue of jobs moving out to suburbs we have increased growth corridors around those business districts. If my job was in Clear Lake City and some land planner said we’re not going to improve the highways so you could get to your job, I’d be upset. But the free market enterprise works pretty well and we’re leaving it up to free market enterprise to decide where people live. That’s part of the Houston spirit.
Realty News Report: Most of the retail construction nowadays is along the Grand Parkway. How has the Grand Parkway changed the retail equation?
David Jarvis: Retail always follows rooftops. You’ve got to have rooftops there first, and developers of MPCs have become experts at doing it on spreadsheets – when you hit right number of rooftops you buy land. They know they are sophisticated in site selection. They know what it takes to be successful and rooftops have to be there first.
Realty News Report: Where is real estate development headed? Will we see more development now in downtown Houston than in the suburbs?
David Jarvis: One of the main things is that we are getting back to, offering affordably priced homes. In the early half of the last decade you could get a mortgage for a house with no income! There was no regard for the financial picture. People who didn’t have the resources to maintain homes could buy one without any money down. It’s expensive owning a home. Wall Street put people in homes that they couldn’t afford. That was a tremendous disservice to people Things over corrected, 2008-2012 and it very hard for some to buy their first home. People had to qualify with cash up front. If you can’t afford a home shouldn’t be in a home. Mortgages are more readily available now builders and developers are now building more homes below-$300,000 homes.
Realty News Report: Where do you see Houston’ future expansion?
David Jarvis: If you look at a map of Houston, development is going south on 288. 75 percent of development is there because that’s where the land is. We will continue to develop in the west, northwest and south west of that line, because we have land that have infrastructure. Thank goodness for toll roads so people can move where they want. We’re still very much an oil town, our economy largely tied to oil patch, but not entirely. When oil dropped from $120 barrel to $26 barrel, Houston came though it much better because we had more economic diversity, I believe oil will continue to be good to Houston. The U. S. is now the largest supplier of crude oil in world, taken over from Saudi Arabia. Houston has its problems, and I’m confident we will find solutions for them. After all, Houston was built on the can-do spirit.