Houston Port Authority: Digging a Ditch Really Made a Difference

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policy system cuts

Houston

Although Texas’s largest city, our comments regarding Houston in the Age of Urban Renewal will be less a case study than a snapshot of relevant issues interesting to our policy model. Houston did not participate in post-1949 federal urban renewal programs; urban renewal per se had no great effect on the city and was background noise for its economic development. There is little purpose in trying to reconcile Houston (or Dallas for that matter) to the experience of the northern/Midwestern Big Cities during the Age of Urban Renewal. While they may have faced similar trends, suburbanization for example, the politics/economics of growth versus decline simply put Texan cities on a different planet than northern Big Cities. As far as economic development, it should be evident by this point that while northern Big Cities are shifting from private-Chamber-led economic development to quasi-government redevelopment agencies and government departments—not so Houston or Dallas. Chambers remain the preferred vehicle for economic development leadership which is thoroughly Privatist, large corporation dominated, and remarkably congruent with the expectations of its political culture.

Houston broke into the nation’s top ten cities (7^th) in 1960 and climbed a notch each census after—reaching its current position, 4^th in 1990. Our previous Houston comments, including the effects of World War II war production in this chapter, outline a few industry sector developments which thrust Houston into national leadership in energy, chemicals/refining (25% nations refining capacity/50% petrochemical-1979), manufacturing (sixth largest in USA, 1979), and technology. The NASA Space Center and the Houston Medical Center anchor the latter sector. The Houston Ship Channel anchored Houston’s formidable position as one of the nation’s most vibrant ports. At the end of this period (1979) Houston ranked first in foreign trade tonnage (Saudi Arabia her chief trading partner). Houston’s image to outsiders is energy-biased, but the Houston economy since the forties has been an economic developer’s diversification dream.

Houston is not Dallas. While they obviously share Texas law, state government and business climate, they have developed in their own style. Four factors differentiate the two cities: (1) private planning and physical landscape; (2),annexation/ suburban pattern; (3) structure/involvement of large corporation elites in urban and economic development policy-making; and the (4) political/policy process..

Despite the differences outlined in the opening paragraph, northern Big Cities and Houston/Texan cities do share a focus on physical development/redevelopment during the Age of Urban Renewal—but in the Houston experience the primacy of the CBD is set aside, displaced by multiple smaller scale CBDs scattered throughout the central city. In this respect, Houston resembles New York City. Texan cities, indeed most Sunbelt Cities during the Age, are undergoing an experience more comparable to City Beautiful than redevelopment of the northern Big Cities downtown core. Houston, like Dallas, experienced more physical development than redevelopment—more City Beautiful than Big City-style urban renewal.

Private Planning and Houston-style Economic Development

Our starting point is the confluence of the area’s political culture on the development of planning/economic development in Houston. In Houston the values of individualism, private enterprise, free choice, and above all limited government have defined its approach to growth and certainly economic development. Among the more outrageous intrusions of these values into policy-making and implementation is the features and the processes associated with northern-style economic development are simply left to corporations and individuals. Economic development works to facilitate such individual activities.

As was obvious, in northern Big Cities the impact of the planning movement was quite profound and its midwifery of a Big City economic development profession has been noted. Big City planning and economic development centered on government institutions/powers evolved along governmental paths. Flat out, this just didn’t happen in Houston. Public planning, compared to northern Big Cities, is far less robust. Economic development stayed with chambers of commerce, and planner ability to impact Houston’s physical form during the Age was minimal. Much has been made that Houston did not approve/implement zoning. That understates the situation. Three times in Houston history voters have rejected zoning referendums (1948, 1962, and 1993)—the city council formally has rejected it twice. Does this mean Houston does not plan? No, rather it means that Houston has chosen to employ “private planning” instead of public planning.

It is quite possible that most of our readers will think of private planning as some kind of oxymoron—how can one privately plan? Through profit-making? Precisely, that is what Houston has done! Houston’s cultural motif is to delegate planning to private corporations and individual preferences. The desire to make a profit incentivizes firms to conform to consumer demand, price sensitivity, and market realities. Images and visions developed from above or from public planning meetings, give way in Houston to developer planned subdivisions and commercial projects.

Instead, the arrangement of land uses is more a function of land prices and deed restrictions … Restrictive covenants and civic associations [homeowners groups] to enforce covenants have been the mechanisms used to protect residential areas since the 1920’s. Deed restrictions as well as private master plans, were generated for the hundreds of shopping centers, garden apartment complexes, industrial parks and office parks built in the metropolitan area in the postwar period…. By the mid-1970’s, it was estimated that 10,000 deed instruments covered about two-thirds of the city.[1]

Predictably, in a fairly flat land area with few natural hindrances, the result has been classic sprawl. When a land use no longer fits, the parcel is bought and reconverted to a new use. Growth has been accommodated by phenomena such as master plan communities, privately planned new towns, residential and commercial deed restrictions, neighborhood governance through homeowners associations, and municipal utility districts—all examples of privatized and decentralized planning in Houston[2].

Houston is a city composed of numerous developer-planned condo and detached subdivisions that are served by municipal service districts (MUDs) that finance the necessary infrastructure using tax-exempt bonds and property owners paying off debt service through annual payments. By 1986, there were 411 such districts in Houston, about 75% of all such districts in the state of Texas.[3] The usual practice is for the city to annex these districts and assume debt obligations—which is an incentive to support annexation. Finally, the delegation of planned growth to private enterprise has meant city-building has also fallen into private sector hands. Where northerners are used to subdivisions in an unincorporated periphery area or incorporated suburb, often in Houston the community is comprehensively planned by the developer, financed, and incrementally developed. For example, the affluent River Oaks planned community was among the very first of these master plan communities (1923)and it opened its planned shopping center in 1937. At that time River Oaks was a suburb; then it was annexed. Master plan communities developed into a central feature of Houston periphery expansion—climaxing in the last years of the Age of Urban Renewal with a series of large master planned suburban developments, the most famous of which being the Woodlands[4].

How these observations and devices impacted the sacrosanct central business district is almost shocking. Houston does have a downtown, that’s where most of the tallest buildings are—but it might be more accurate to observe it has many downtowns. By the end of the Age, areas such as Post Oak and Greenway, Galleria-West Loop were de facto mini-CBDs. In 1982, the original CBD was responsible for only 2.3% of the city’s retail sales.[5]. Post Oak, on the other hand has “more first-class shopping space than the CBD, it has more first-class hotels, a 64 story office building” and the famous Galleria shopping mall[6]. Between 1969 and 1986 (admittedly outside the Age) about 360 office buildings greater than 50,000 sq. ft. were built (metro area). Office space in Houston increased by nearly 145 million sq. ft—an increase of 800%[7]. Almost all of these centers were master planned projects. The consequence of this privately planned development is the Houston land use pattern does not reflect the more concentrated land uses commonly found in publically planned cities.

The conclusion that follows from a delegation of planning to private actors is that (1) not only does the physical landscape of the city and the metropolitan area deviate from the usual patterns—significantly, but (2) the role of economic developers (and planners) also shifts to work with developers and facilitate their planned growth (often, cleaning up their messes and externalities). Economic developers in Houston are far less likely to think about PUDs, and property redevelopment for example. Instead, this is an atmosphere perfectly suited to tax-increment financing (TIF), tax-exempt bond issuance, tax abatement, and public-private projects. Economic developers more naturally focus to external opportunities such as recruitment and promotion. It would seem an economic developer, working in New York, were to relocate to Houston, she would notice that things are a wee bit different.

Annexation

By the time the Age of Urban Renewal drew to a close (mid-late 1970’s), it could be correctly observed that Houston was not seriously hemmed in by incorporated suburbs. In an era in which suburbanization was a crisis for most central cities, Houston was a rare exception. Even Dallas, certainly San Antonio had to come to terms with extensive suburbanization. But not Houston. Amazingly, Houston’s most populous suburb, Pasadena, is, for all practical purposes, surrounded by the City of Houston. It is an “island suburb”. Houston has several island suburbs (Bellaire is another). As of 1970 more than half of Houston’s metro population lived in the central city. Because of Texas annexation laws Houston retained its population and put its suburbs on their “back foot”.

In the late seventies, Houston held about 550 sq. miles within its borders—a fairly dramatic increase from the 73 sq. miles it controlled in 1945. Indeed, Houston more than doubled its land area by 1949. There were major annexations after 1949 (1956, 1965, and 1978) which tripled its land area. On top of this, Texas annexation law (Municipal Annexation Law 1963) permitted the “reserving” of thousand of acre five miles outside the city limits (extraterritorial jurisdiction). Also, an unincorporated area wishing to incorporate must notify and the central city. Texas annexation law is among the most favorable of such laws in the nation—and Houston has taken advantage of it.

Aside from the obvious advantages of accruing to Houston’s tax base and facilitating service delivery, Houston annexation has submerged the city’s nonwhite minorities with a flood of annexed areas. Houston’s percentage of African-Americans is significantly lower than most central cities (21 % in 1950). Yet, between 1950 and 1960 the number of African-American Houston residents increased by 90,000 to 215.000. Over the next decade black population rose by an additional 100,000, and nearly another 125,000 by 1980—at that time about 440,000 African-Americans or 27.6%. Hispanic population in 1960 totaled about 7% and by 1980 rose to 18%. Houston’s more unconventional suburbanization, however, has not always translated into the white middle-class image of suburbs; Pasadena, the largest suburb is less than 2% African-American, but almost 49% Hispanic (2010)[8]. In any case, absent annexation, Houston would likely have been majority African-American/Hispanic. It would also be fair to observe that annexation played a significant role in preserving the business-dominated politics and economic development policy system which shall be next discussed.

Houston Business Elites

Like Dallas and Fort Worth, business elites have exercised a major impact on policy-making, particularly economic development policy-making in Houston. “The first group to dominate the city was composed of the founding entrepreneurs, the Allen brothers and a few other merchants. General [business] and cotton merchants were very influential over the next few decades and in the 1880’s and 1890’s bankers, lawyers and railroad men. By the late 1920’s oil entrepreneurs had become part of the city’s power structure … In the late 1930’s the most cohesive clique emerged, the Suite 8F crowd”.[9]

Suite 8F in Houston’s Lamar Hotel acquired the title of the unofficial capital of Texas so powerful was its image. The private suite of George Brown (owner of Root & Brown), meetings included card-playing, cigar-smoking, dominoes [surprisingly not Monopoly] and story swapping. Our earlier mentioned Jesse Jones attended as did a litany of the biggest movers and shakers of Houston. There wasn’t anyone in political office or in a corporate corner office they could not call. Jones, Chair of FDR’s Reconstruction Finance Corporation was also owner of the Houston Chronicle, other regulars owned the First National City Bank, the major law firm, the huge Brown & Root construction engineering firm, the largest professional employer in Houston at the time, and former governor and owner of the Houston Post. Billie Sol Estes and Bobby Baker were frequent attendees. The 8F crowd controlled politics through campaign contribution—they made them and they “choked them off”. Typically, the focused attention on bond referendum critical to economic development projects. The last election the 8F crown allegedly controlled was the hotly contested 1956 mayoral race between the “flamboyant incumbent, Roy Hofheinz and former, eleven term [you got that right, eleven terms since 1921] mayor Oscar Holcombe. The 8F crowd switched from Hofheinz to Holcombe, to no avail as newcomer Lewis Cutler won with a plurality of African-American votes liberated by the 1949 Supreme Court decision which outlawed the white primary[10].

And so by the early sixties, the 8F crowd was gone; today the Lamar Hotel is allegedly a parking lot. That did not mean that business impact on politics and policy disappeared. “The power is diluted and frequently shared with other groups, especially blacks and Hispanics” and local political scientists confirm the city was still heavily impacted by the “union of city government … and the growth and development elite”. Reports in the early eighties stated the Walter Mischer, chairman of Houston’s largest bank holding company, had asserted some of George Brown’s authority.[11] Déjà vu all over again it appeared. But still “neighborhood” large corporation business elites in the seventies formed the West Houston Association whose purpose was to work with Harris County.[12]

Shortly after that (August 1982), the Houston Chamber of Commerce, sensing a private sector leadership gap had materialized, asserted that it would lead an expanded private sector involvement in public and Houston affairs. Its Chair, William C. Harvin, declared that “ we have reached the point now that there has to be more comprehensive planning and there has to be some architect for the future of the city. The private sector must seize the initiative. Whether by default or desire … that must become the role of the Chamber … instead of simply reacting … we can anticipate what’s going to happen in the city and see to it that proper plans are carried out”.[13] In short order the Chamber set up the Houston Economic Development Council which in the mid-eighties developed a highly sophisticated, sector-targeted attraction and recruitment program intended at the time to diversify a recession-impacted local economy. In 1989 the HEDC, the chamber and the World Trade Association merged to form the current ten county Greater Houston Partnership. It would appear that reports of the death of serious business elite dominance in Houston economic development were greatly exaggerated.

What these observations do suggest is “that Houston was not Dallas” at least until chamber intervention. Large corporation elites obviously played a major, usually dominant role, in both city’s politics and economic development policy, but Dallas, through the Citizens Council, has established steady and long-term involvement which, often for the better of the community, reached into many areas, school desegregation for example, and have done so for almost eighty years. Houston’s large corporate elite, however, was less organized, without any formal bureaucracy, public organization or plan. Informal, more concerned with private projects and central city physical development, and impact on key municipal elections and a pro business, pro growth business climate, the Houston large corporate influence has been quixotic, characterized by a fluid oligarchy than by a persistent policy direction or community vision. Until the Chamber assumed its leadership in 1989, and formalized as well as structured the participation of large corporate elites, Houston’s business leadership never fully exerted its power over policy to accomplish benevolent public and community purposes[14].

Houston Policy System

During the Age of Urban Renewal, Houston was governed by eight at-large council persons. Minorities were unable to overpower the annexation-created majority white electorate. Bolstered by the Suite 8F and then by less structure corporate elites. Although after the 1949 overturn of the white primary, African-Americans did vote in increasing numbers, they achieved limited success at best. Perhaps the most effective avenue for black access to politics was exercised by the Harris County Council of Organizations that included eighty African-American businesses and civic organizations. Their efforts were helpful in the election of Barbara Jordan to Congress. As the Houston Chamber slowly increased its leadership during the 1970’s, it incrementally provided an a more diverse avenue to business leaders of all persuasions. The Chamber, a significant, but not compelling player in Houston politics and policy, assumed a bit more of a role in the vacuums that occurred when the 8F types withered. In the years to come the Chamber provided advocacy and planning and more leadership in policy-making.

Louie Welch served as Houston’s mayor from 1964 to 1973. A Republican, small businessman (auto parts owner, real estate and stock broker), he was recruited from the Lions to run for city council—which he did off and on for four terms. On his fourth attempt at election to mayor, he won. Welch was Houston’s counter to Philadelphia’s controversial Frank Rizzo—only more so. Despite some horrific statements and policy positions, however, Welch appeared to be a decent, competent mayor who presided during Houston’s period of greatest growth[15]. He won five two year terms as mayor.

From our economic development perspective, Welch played an important and powerful role in Houston’s economic development evolution. During his years, Houston crossed over the million population threshold, the Astrodome and Houston International Airport opened, NASA and Mission Control sent a man to the moon, and new sources of water cemented Houston’s existing and future growth (the Astros started playing professional ball in 1961-62). Welch dredged the Houston Shipping Channel, the silent foundation of Houston prosperity, after years of neglect—and his new Civic Center trumpeted the “splendor” of the Houston central business district. Over his years and the years that followed, the office of mayor developed into a strong mayor form of government. Welch had close relationships with the 8F large corporation elites. An ambassador to the outside world, Welch had more success as President of Conference of Mayors and Vice-President of the League of Cities. Upon his arrival in office Houston went largely unnoticed across the nation. When he retired in 1973, Houston was fifth, soon to be fourth largest city in America and fully positioned as the up and coming city of the Sunbelt-dominated national urban hierarchy. Welch moved over to the Chamber and eventually became its President.

Welch’s move over to the Chamber was significant as a symbol of that institution’s designation as the vehicle of large corporation elites, repositioning from their former informal, individualist, self-serving past, to a more modern, cosmopolitan, responsible institution of metropolitan governance. It may be that Houston had grown too big, and its arrival in the top ranks of the urban hierarchy made it too visible to exercise power in the traditional Houston 8F style[16]. But from Welch’s movement from mayor to President of the Houston Chamber, the Chamber accumulated more legitimacy, capacity, and attracted into its leadership, policy-making committees, and programmatic subsidiaries, the power of Houston’s large corporation elites–all of which is beyond the Age of Urban Renewal our present period of discussion. In an emeritus role, Welch continued symbolically into the 1989 formation of the present day Greater Houston Partnership.

Between 1975 and 1979, a bit outside our Age of Urban Renewal, a page turned in Houston politics. A coalition of minorities, white liberals united behind Fred Hofheinz (the son of the 1950’s Roy) and he was elected to be mayor. In 1979 the U.S. Justice Department, recognizing the role annexation played in preserving a lily white city council, ruled that Houston could continue to annex suburban areas only if it modified its at-large election system. This prompted an intense debate on how to configure the new political process. Some proposed a predominately ward-base council, and others a hybrid ward and at-large council. The Chamber, allegedly fearing that too many ward-based council seats would jeopardize business leadership in Houston affairs,, backed a nine (ward) and five (at-large) configuration. That 9-5 plan was placed in referendum against the old, Justice Department-challenged, 8-0 at large system. The 9-5 Plan won.

Over the next decade or so, Houston entered into a time of political and policy transition—a transition catalyzed by a national recession and an energy crisis. That is a story for another chapter.

[1] Joe R. Feagin and Robert A Beauregard, “Houston: Hyper development in the Sunbelt” in Robert A. Beauregard, Atop the Urban Hierarchy (Ed) (Totowa, New Jersey, Rownan & Littlefield Publishers, 1989), p. 173.

[2] Robert Fisher, “Protecting Community and Property Values: Civic Clubs in Houston, 1909-1970”, in Char Miller and Heywood T. Sanders (Eds), Urban Texas: Politics and Development (College Station, Texas A&M University Press, 1990), pp. 128-140.

[3] Joe R. Feagin and Robert A Beauregard, “Houston: Hyper development in the Sunbelt”, op. cit., p. 178.

[4] In 1980 the Woodlands had about 8,400 residents. Today, it is a census-designated-place housing nearly 95,000. The topic of master plan communities affects not just Texas or Houston. Irvine California is another example—of many possible. The topic will be considered in more detail in a later chapter.

[5] Joe R. Feagin and Robert A Beauregard, “Houston: Hyper development in the Sunbelt”, op. cit., p. 175. Sixty per cent of the metro area major retail centers are within the city (1982). Philadelphia in 1982 had less than 5%. Of the twenty-seven major retail centers in the 1982 Houston metro area, only two were NOT planned malls. (p. 177).

[6] Joe R. Feagin and Robert A Beauregard, “Houston: Hyper development in the Sunbelt”, op. cit., p. 179.

[7] Joe R. Feagin and Robert A Beauregard, “Houston: Hyper development in the Sunbelt”, op. cit., pp. 175-176.

[8] Barry J. Kaplan, Houston: the Golden Buckle of the Sunbelt”, in Richard M. Bernard and Bradley R. Rice (Eds), Sunbelt Cities: Politics and Growth since World War II (Austin, University of Texas Press, 1983), p. 202.

[9] Barry J. Kaplan, Houston: the Golden Buckle of the Sunbelt”, op. cit., p. 181.

[10] Barry J. Kaplan, Houston: the Golden Buckle of the Sunbelt”, op. cit., p. 204.

[11] Richard Murray, “Politics of Downtown”, Dissent, Fall, 1980, p. 502-503

[12] Barry J. Kaplan, Houston: the Golden Buckle of the Sunbelt”, op. cit., p. 209.

[13] Barry J. Kaplan, Houston: the Golden Buckle of the Sunbelt”, op. cit., p. 209.

[14] One significant area of large corporate leadership in a key policy area was the 1979 formation and financing (one cent sales tax) of the Metropolitan Transit Authority.

[15] I am particularly attracted to his description of his service as mayor; “When I was elected mayor, I spent the better part of my first term weeding out the political appointees I had inherited … [and] virtually all my second term weeding out my own political appointees”.

[16] For a deeper discussion of the rise of the Chamber (and HEDC, its predecessor) see Robert E. Parker and Joe R. Feagin, “Houston: Administration by Economic Elites”, in H.V. Savitch and John Clayton Thomas (Eds), Big City Politics in Transition (Newbury Park, CA, SAGE Publications, 1991), Volume 38 Urban Affairs Annual Reviews, pp. 169-188.

end of policy system cuts

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In 1890, Houston, about forty-five miles inland from Galveston, was home to about 27,000. Galveston[i] home to 29,000. Connecting the two cities was a not very impressive, shallow sliver of water called the Buffalo Bayou. Cargo from large ships would break bulk in Galveston, transfer to barges, and ship to Houston via the Buffalo Bayou. Houston Congressman Tom Ball got the bright idea to convert that sliver of water into a shipping canal to transform Houston into a deep-water port–but he got nowhere for ten years. And then the storm struck.

A 1900 hurricane devastated Galveston. Shortly after the storm (January 1901) oil was discovered, at Spindletop, Texas (near Beaumont); this was the opening shot of the Texas oil boom. After the storm Congressman Ball persuaded House colleagues to fund fifty percent of the cost to dredge the Bayou. All that was needed was the other fifty percent (about $1.25 million). It took some convincing, but by 1909, with port authorities springing up like weeds, the County formed the Harris County Houston Ship Canal Navigation District (it’s a port authority anyplace else). A campaign commenced for port authority voter approval and bond–both were approved. On January, 1911 the Port Authority of Houston went into operation. Shortly after, it issued bonds, but no one would buy them. Jesse H. Jones[ii], then a mere bank President, convinced each Houston bank to ante up; the bonds were purchased.

The canal was dredged. By 1920 Houston surpassed Galveston in export tonnage. By 1930 Houston was the nation’s third busiest port and in the same year became the largest city in Texas. In 2010, Houston’s 2.1 million tons contrast with Galveston’s 48,000 and by 2013 the Houston Port Authority was the nation’s top port (foreign tonnage)—and home to world’s second-largest petrochemical facility. Houston seized regional advantage from the channel because the city had previously developed into a premier rail hub. Control of the rail hub allowed Houston to siphon off agricultural produce and raw materials (and financial capital) that otherwise would have gone to New Orleans.

Houston’s success prompted Texan cities to develop port authorities. Throughout the 1920’s port authorities were created in Brownsville (1925), Corpus Christi (1926), Post Isabel-San Freeport (1927), Brazos River, (1927) and Benito (1928). By 2013 sixteen Texas port authorities were operating. This spurred other Gulf Coast cities to do the same. Florida Port Authorities were not far behind as Palm Beach established theirs in 1915, St Lucie (1920), Tampa Port Commission was in operation by 1924 and Port Everglades (Broward County) Florida in 1927. Lake Charles Louisiana established its port authority in 1924. These port authorities tapped into the 1910 federal Rivers and Waters Act which provided the first significant dose of federal funding for what would eventually be an important section of the future 3,000 mile Intracoastal Waterway.

Investment capital for both rail and channel (similar to Carolina textile mills) came from the purchase of stock and channel bonds by the general community and local banks, leveraged with state loans, land grants, and assistance from the federal government. More investment, and risk assumption, was needed to install pipelines, storage facilities and refineries required for the budding petro-chemical industry. Drawing upon eastern speculative capital, Houston entrepreneurs laid down pipelines to new refineries. (Miller & Johnson, 1968, p. 22) The aggressiveness of Houston business elites, leveraged with state and federal tax dollars, was a dramatic departure from Deep South economic development. Prominent in spurring the animal spirits of Houston’s private elite was an intense rivalry among the business elites of the Houston-Galveston-Beaumont-New Orleans Gulf Coast urban hierarchy.

[i] The Port of Galveston was the oldest port on the Gulf of Mexico (established in 1825 when Texas was part of Mexico). Until 1900 the port was the second largest (to New York City) port in the nation (cotton, cattle and rice). Success of the Port of Galveston prompted New Orleans to form its 1890’s port authority.

[ii] Jesse H. Jones, called “Jesus H. Jones” by FDR, turned down offers by Wilson to be in his administration. He headed the Reconstruction Finance Corporation (for Hoover) and later became FDR’s Secretary of Commerce and was seriously considered for the 1940 Vice Presidential nomination. His PAC, the Suite 8F Group, contributed mightily to the early political careers of John Connolly and Lyndon Baines Johnson.

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This may be duplicate or abridgement of section that follows

Houston

Houston is not Dallas. While they obviously share Texas law, state government and business climate, they have developed in their own style. Four factors differentiate the two cities: (1) private planning and physical landscape; (2), annexation/ suburban pattern; (3) structure/involvement of large corporation elites in urban and economic development policy-making; and the (4) political/policy process..

Private Planning and Houston-style Economic Development

Houston is a city composed of numerous developer-planned condo and detached subdivisions that are served by municipal service districts (MUDs) that finance the necessary infrastructure using tax-exempt bonds and property owners paying off debt service through annual payments. By 1986, there were 411 such districts in Houston, about 75% of all such districts in the state of Texas.[3] The usual practice is for the city to annex these districts and assume debt obligations—which is an incentive to support annexation. Finally, the delegation of planned growth to private enterprise has meant city-building has also fallen into private sector hands. Where northerners are used to subdivisions in an unincorporated periphery area or incorporated suburb, often in Houston the community is comprehensively planned by the developer, financed, and incrementally developed. For example, the affluent River Oaks planned community was among the very first of these master plan communities (1923) and it opened its planned shopping center in 1937. At that time River Oaks was a suburb; then it was annexed. Master plan communities developed into a central feature of Houston periphery expansion—climaxing in the last years of the Age of Urban Renewal with a series of large master planned suburban developments, the most famous of which being the Woodlands[4].

Annexation

Houston Business Elites

Suite 8F in Houston’s Lamar Hotel acquired the title of the unofficial capital of Texas so powerful was its image. The private suite of George Brown (owner of Root & Brown), meetings included card-playing, cigar-smoking, dominoes [surprisingly not Monopoly] and story swapping. Our earlier mentioned Jesse Jones attended as did a litany of the biggest movers and shakers of Houston. There wasn’t anyone in political office or in a corporate corner office they could not call. Jones, Chair of FDR’s Reconstruction Finance Corporation was also owner of the Houston Chronicle, other regulars owned the First National City Bank, the major law firm, the huge Brown & Root construction engineering firm, the largest professional employer in Houston at the time, and former governor and owner of the Houston Post. Billie Sol Estes and Bobby Baker were frequent attendees. The 8F crowd controlled politics through campaign contribution—they made them and they “choked them off”. Typically, the focused attention on bond referendum critical to economic development projects. The last election the 8F crown allegedly controlled was the hotly contested 1956 mayoral race between the “flamboyant incumbent, Roy Hofheinz and former, eleven term [you got that right, eleven terms since 1921] Mayor Oscar Holcombe. The 8F crowd switched from Hofheinz to Holcombe, to no avail as newcomer Lewis Cutler won with a plurality of African-American votes liberated by the 1949 Supreme Court decision which outlawed the white primary[10].

Shortly after that (August 1982), the Houston Chamber of Commerce, sensing a private sector leadership gap had materialized, asserted that it would lead an expanded private sector involvement in public and Houston affairs. Its Chair, William C. Harvin, declared that “we have reached the point now that there has to be more comprehensive planning and there has to be some architect for the future of the city. The private sector must seize the initiative. Whether by default or desire … that must become the role of the Chamber … instead of simply reacting … we can anticipate what’s going to happen in the city and see to it that proper plans are carried out”.[13] In short order the Chamber set up the Houston Economic Development Council which in the mid-eighties developed a highly sophisticated, sector-targeted attraction and recruitment program intended at the time to diversify a recession-impacted local economy. In 1989 the HEDC, the chamber and the World Trade Association merged to form the current ten county Greater Houston Partnership. It would appear that reports of the death of serious business elite dominance in Houston economic development were greatly exaggerated.

What these observations do suggest is “that Houston was not Dallas” at least until chamber intervention. Large corporation elites obviously played a major, usually dominant role, in both city’s politics and economic development policy, but Dallas, through the Citizens Council, has established steady and long-term involvement which, often for the better of the community, reached into many areas, school desegregation for example, and have done so for almost eighty years. Houston’s large corporate elite, however, was less organized, without any formal bureaucracy, public organization or plan. Informal, more concerned with private projects and central city physical development, and impact on key municipal elections and a pro-business, pro-growth business climate, the Houston large corporate influence has been quixotic, characterized by a fluid oligarchy than by a persistent policy direction or community vision. Until the Chamber assumed its leadership in 1989, and formalized as well as structured the participation of large corporate elites, Houston’s business leadership never fully exerted its power over policy to accomplish benevolent public and community purposes[14].