By KENDALL MILLER
Copyright 2009 Houston Chronicle

Feb. 22, 2009, 9:18PM

The day is fast approaching when construction cranes, development projects and construction-caused traffic dislocations are going to be missed. These irritating inconveniences are, after all, examples of healthy growth — and with it, economic prosperity.
Every day brings fresh bad news about the national economy and, increasingly, how it has begun to affect Houston. As healthy as our economy has been, we are not immune to the national economic crisis and ill-considered policy changes from City Hall could make things worse.

In recent months the Houston Chronicle’s Business section has seen a spate of reports on local development projects that have been put “on hold” until credit markets thaw. There have been layoffs, retailers are worried, home builders have hunkered down or closed shop and more pain appears to be on the way.

Unlike most other cities, however, we added more than 50,000 jobs last year and housing values have declined less than in other cities. Because real estate has been realistically priced here, there have been few examples of cutting corners in mortgage lending. In Los Angeles, for example, the median priced home is more than 11 times the median income. In Houston, the median priced home is less than three times the median income. The downturn will be milder in Houston.

Experts around the world say this is no accident. The largest city in America without zoning has enjoyed government policies that do not artificially constrict supply by restricting land use. Instead, deed restrictions control what can be built within most neighborhoods and the friction between growth and neighborhoods that commonly inspires the ill-considered politics and policies in other cities has been relatively rare in Houston.

While other major cities have priced low- and moderate-income buyers and renters out of the housing market, we have largely avoided prescriptive policy demands on building design. And, for the most part, we have recognized that shifting public infrastructure costs to builders inevitably ends up coming out of the consumer’s pocket.

This has not gone unnoticed, with many economists and land use experts citing Houston over the past year as the city that “got it right.” By that, the experts mean we are the leading “opportunity city,” where our growth policies don’t freeze out upward mobility in favor of attracting an “elite class” of professionals. When real estate prices are artificially increased through both government restrictions and inducements to the “creative class,” it is always low- and middle-income residents who are first hurt, with the entire economy almost always affected later.

But because there has been some friction as Houston’s population has become denser, especially inside the Inner Loop, there still exists the temptation to take a well-intentioned but nevertheless wrong path toward centralized government control of growth. City after American city has belatedly discovered “Smart Growth” and “New Urbanism” policies look good — right up until the cost to consumers, the economy and taxpayers is considered. By then, the damage has been done.

Planning for growth is healthy, but Houston’s model has been to plan for public expenditures that support privately invested growth instead of requiring private expenditures for public uses. Houston can improve further in this area by creating a long-range plan for public infrastructure that rationally plans for growth while avoiding the temptation to shift such costs to those risking their own capital for growth. Can deed restrictions be made to work better? The answer is most certainly “yes.” Renewal of deed restrictions is cumbersome and requires significant legal costs. The city should help neighborhoods by lending legal help, by making deed restrictions highly visible and by making apparent to buyers what areas on the edges of neighborhoods are subject to development. Regulatory barriers to pedestrian-oriented development should be removed so costly variances can be avoided, but such development should succeed because of consumer acceptance, not regulatory mandates that increase consumer costs.

In Houston, we have a diversified economy that produces healthy tax revenues for everything from police and fire protection to improvements in drainage to more parks and more books in our public libraries. Part of our success is derived from the men and women who risk their own wealth to build apartments, homes, office buildings, movie theaters and grocery stores. In truth, developers hire carpenters, electricians, roofers, pavers, design professionals, architects and scores of other Houstonians. Developers and builders don’t deserve disdain for risking their savings and investments on future growth. Neither should local government leaders who understand that policies that foster growth lead to a better standard of living, robust job creation and an economy far healthier than most other major American cities.

Miller is president of Houstonians for Responsible Growth and president of the Tanglewood Corporation.