Paying the Ashby Highrise Away

PAYING THE ASHBY HIGHRISE AWAY Former apartment manager and accountant Randy Locke, who’s running for city council in the district that includes the site of the Ashby Highrise, has a plan to stop the proposed 23-story development at 1717 Bissonnet St. — but it’ll cost: “I don’t believe that the monies offered these builders were sufficient enough to get them to go away,” he tells reporter Chris Moran. “[Locke] did not identify the private interests he said offered the developers money, but pledged that, if elected, he would convene a meeting between the developers and those private interests within 30 days, and, “‘I’ll convince the other people that were chipping in the money to give them a little bit more and we’ll make the whole thing go away.’” [Houston Chronicle; previously on Swamplot; Ashby Highrise coverage]

24 Comment

  • Randy Locke is the Coase theorem candidate.

  • I don’t think ol’ Randy has much a future in politics. Rich people are well aware of the fact that they can write checks and make their problems go away. They don’t need a politician to convene a meeting for the sole purpose of telling them to just pay more. They already know that’s an option. They don’t want to throw money at the problem. They want to throw politicians at the problem.

  • but i assume he has no issue with the office tower to go in at the corner of montrose/59 which sees about 20 times as much traffic as bissonet.

    since when did we elect city councilman to impede growth?

  • if i was the owners of the proposed ashby high rise, i would give the residents two choices. either meth clinic and homeless shelter, or apartment building.

  • Joel: If Locke managed to get together a group of local residents who chipped in enough to pay the developers not to develop the highrise, why would you care?

    The developers would be happy (they get paid) and the local residents would be happy (no tower obnoxiously casting a shadow on them)–all without using the regulatory powers of government. It would be a pure market solution.

  • locke is an idiot. we should have stopped giving him press coverage 14.5 minutes ago.

    carry on, nothing to see here.

  • Boyd – i would just hope others would consider a more reasonable use of our city council and their time on duty would be to draft better plans on how to deal with the increasing density in the inner loop and make it compatible with the residential areas. spearheading movements to direct development to only specific parts of town is not why houston has voted for no zoning time and time again. this isn’t an issue you can sweep under the rug, it’s a direction the market is heading and it certainly won’t be the last tower proposed in residential areas. of course foresight is way too much to ever expect out of a politician.

    i could care less if people want to buy the property, but i just don’t see it the responsibility of our council to persuade development as they see fit and negotiate these deals. i live in texas for a reason, this isn’t california.

  • Re: randy Locke’s comments : yeah right Randy. Who the hell are the mystery developers ? They probably DO NOT exist,only in your deluded mind..A good idea though: the Southampton anti-growth residents could come up w ith MILLIONS to make the developers abandon the project. Otherwise,like Jack stated: give the residents a choice :meth clinic /homeless shelter or NEW,shiny ,property tax paying high rise. This IS Houston : home of virtually no zoning and unbridled ,free for all development…Those spolied Southampton neighbors need to GET OVER themselves !!!! Sore losers !!!!!!

  • Joel: I’m not sure what you are trying to say with the first part of your statement. As far as I know, the Ashby high rise isn’t going to increase density–I’ve heard that it has about the same number of units as the low-rise apartments it is meant to replace. (I may be wrong here.)

    Second, imagine this scenario. Locke is a private individual and not a City Councilman. He goes to the residents of the neighborhood and asks them individually how much they would pay to make the high rise go away. He takes their collective offer to the developers. After some back and forth, the two parties (the neighborhood and the developers) reach an agreement through Locke. The high rise doesn’t get built. Would you object to it then?

    Back in the 1930s, an economist named Ronald Coase did work on pricing externalities. We usually think of externalities in terms of things like pollution, but the Ashby high rise imposes an externality on the residents nearby (or at least they perceive it to, which is enough). Coase said that absent transaction costs, bargaining will lead to an efficient outcome regardless of the underlying property rights.

    In this case, let’s say that the neighborhood had a price they were willing to pay to prevent the tower from being built and the developers had a price they were willing to take to not build the the tower. As long as the former price were equal or greater than the latter, a bargain could be struck and the most economically efficient outcome would be not to build the tower. If the former price were less than the latter, the economically efficient outcome would be to build the tower.

    The problem with Coase’s theorem is that in real life, there are usually steep transaction costs because the people who are affected by the externality are hard to identify, and once they are identified, it’s hard to get them all to come to an agreement on bargaining and price.

    That seems to be what Locke is offering–a way for them to be represented in a Coase transaction. Frankly, if we could do this instead of using regulation to solve the problems with externalities, I would be pretty satisfied.

    I present this as a thought exercise. I don’t really have a strong opinion about the Ashby high rise or about Locke. But I certainly have no problem with a community getting together and paying a developer not to build something that they don’t want in their community. That strikes me as a win-win.

  • It is interesting the juxtaposition of conservative memes here. If you proposed raising property taxes on Southhampton homes valued in excess of $500,000, the conservative response would be stuff like “why are you punishing the job creators” and “class warfare!” But when the same people try to keep an incompatible highrise out of their neighborhood (and in some cases, literally their backyards), the same people are spoiled rich people who have too much influence over politicians and are anti-growth.

  • @ Old School – Consistency is not a conservative meme strong point. It’s more associated with the reality based world, and as Mr. Colbert noted, facts have a liberal bias.

  • “The politician’s incentive is to hide costs—to cave to the neighborhood’s demands for less development and then try to mandate affordable housing through still more new rules. I’d argue to politicians that this is all making their city less efficient and their lives more difficult. New growth will ultimately make other problems easier to solve, by supporting the local economy and increasing the tax base. That creates less demand for interventions to “focus on jobs” or dig up tax revenues through new gimmicks. And it creates more room to satisfy local demands for amenities like well-cared for parks and infrastructure. A city that can find ways to accommodate new residents with new development will have an easier time addressing other typical civic problems. ”

  • @Old School,

    I had thought that it was a more interesting juxtaposition of liberal memes here.

    The rich developers shouldn’t be able to do what they want with their own property, but it is okay that the rich neighbors can buy off the govt. to do what they want with the property.

    Occupy Ashby.

  • Old school, if it were “their” backyard nobody would be building a tower there without their consent, would they?

  • Ashby has gotten boring. As have the pretentious brats. As have the politicians pandering to them.

  • Uh- hypothetically, if this idea were to ever work (a big IF), wouldn’t this set a bad precedent? It would encourage developers to push even more unpopular projects, while whispering on the side: “you can make this all go away if you just pay me some $$$”. Besides, even if you pay off the current developers, future land owners would be under no obligation to abide by the agreement.

  • Matt: You’ve hit on the difference between academic neoclassical economics and the real world. However, there would also be risk on the developer’s side. Let’s say a developer/extortionist of the type you describe buys property in a residential neighborhood with very loose land use regulations/zoning/deed restrictions. He announces that he plans to build a pig rendering plant unless the neighborhood coughs up $1,000,000 to make him go away. The neighborhood tells him no. Either he builds the plant (that he never really wanted to build in the first place), takes a lower pay-off, or sells the property. (I guess he could find some other profitable use for the land, but that would take time which erodes the value of the investment in the first place.)

  • Joel,

    What ever happened to that tower planned for that spot just north of 59 at Montrose? Last I remember, Gus reported it was getting a larger setback to accommodate Clear Channel’s Nesquick billboard.

  • another bad precedent, the city purposely distorting the rules of development thus allowing developers to sue the city for millions and waste taxpayers money.

    regarding the office building to go in at on montrose, i certainly don’t know anything. looks like that one lot is still owned by hausman interests whereas midway companies was the developer. maybe it’s dead and waiting for a new proposal to take it’s place (or waiting on the rail perhaps).

  • Regarding the 59/Montrose tower, there is a fairly new sign board with a rendering on the property, so it may not be quite dead yet.

  • Hi, I’m Randy Locke.

    I am flexible in my decision making processes. I propose that the 2.5 Million in 10 year tax abatements, being offered to the proposed Kroger expansion near the Heights in District C instead be offered to the Ashby high rise dilemma.

    By adding the5 million the city offered in 10 year tax abatements and the 500K in cash incentives from 2008 to the 2.5 Million we can offer a total compensation package of 5.15 Million.

    The city paid 8 Million last year in the Inwood area of the new District C, to buy property because the residents did not want additional developments of low rent housing in their neighborhood.

    In my opinion we should not be giving incentives to anyone without strings attached ever. I believe there are kickbacks and bribes somewhere along the chain, in the proposed new Kroger project and the Wal-Mart Heights 6 Million project from last year.

    Kroger already owns the land in the new proposed project and they should spend their own resources on drainage and all other infrastructure. We already supply them with ample lighting, streets, police, and fire protection.

    Smarter uses for incentives would be to create smaller packages that will create JOBS and NEW BUSINESS. The small and medium size business sector fuel 90% of the job growth.

  • so we begin to spend unearned (read: no guarantee of ever receiving) income for the city to enter the private real estate market to benefit a finite number of people. genius!

  • When can I apply for residency? Looks like a beautiful place !

  • #12: I don’t really understand why economists now frown on demand when it is exercised by the wealthy, that such demand, alone, should be tempered by some sort of communitarian impulse toward an unequivocal good as defined by otherwise value-neutral economists.
    Or has populism made the dismal science even more so?
    I realize Mr.Avent writes for a coastal readership (or for those who are there in spirit) interested in all things urban. But he references the “national economy” in the interview so he must think his work has something to say about it.
    The idea that historic preservation /environmental regulation along its twin coasts are a serious threat to America suggests that economists should maybe consider hitting the ground in Flyover Country sometime.