Real Estate Expert: Bayou City Suburbs Become More Urban

Friday, April 22, 2016

By Paul Takahashi
Houston Business Journal

Houston’s sprawling suburbs get a bad rap among those who want to live in a cool, hip neighborhood where they can walk to live, work and play.

However, there’s more to Bayou City’s ‘burbs than rows of little boxes that all look just the same. Suburbs miles outside of the 610 Loop are becoming more urban, featuring townhomes and brownstones and mixed-use centers with shops and restaurants.

“There’s a great desire for people to live in and near the city,” said Gadhi Kaufmann, CEO of RCLCO, a Washington, D.C.-based real estate consultant. “They want to be close to authentic and vibrant places, but it doesn’t mean they need to live downtown. We’re seeing an evolution of the suburbs into suburban nodes of urban activity.”

Kaufmann was in Houston recently to talk about Houston’s evolving suburban marketplace at an Urban Land Institute of Houston forum.

How are Houston’s suburbs changing?
Historically, suburban growth was building large bedroom communities where people get up in the morning, drive 20 to 45 minutes to work downtown and then reverse that commute at night. We’re seeing a revolution in Houston, where we have multiple employment nodes with relatively close-by housing that allows for the distance between jobs and services – like health care, housing and education – organized into smaller clusters, or nodes of urban activity.

What’s an example of one of these suburban but urban nodes?
The Woodlands is a good example. Look at the high-rises and number of people who live 10 miles from downtown Houston. The Woodlands serves as a downtown for the entire north Houston region. In 20 years, The Woodlands will be 60 years old and possibly have 1 million people or more. It would be a major city of its own, like Long Beach relative to Los Angeles.

Why should Houston create more of these “suburban nodes of urban activity?”
Houston is expected to grow between 2 million and 3 million people in the next 20 to 30 years. This growth needs to happen in an organized fashion, because it can’t all fit into the 610 Loop and the Beltway. Suburbanization is inevitable, but it can be done in a good fashion.

Is it difficult to create these suburban urban nodes?
It’s very difficult. It requires a lot of vision and planning. In Houston, the planning isn’t going to be done by the government because zoning is free and open. City fathers and real estate developers will have to exercise discipline and think about long-range planning. It also takes a tremendous amount of capital – patient money – to keep vacant sites reserved for important uses and allow for infill development to occur in the future. A lot of development today is about building, instead of creating a neighborhood. We want to create a neighborhood.

Is this why we are seeing urban-style homes – townhomes and brownstones – in suburbs like Sugar Land?
Yes. That’s because today, more than half of American households don’t have children living at home and more than half of the population age 50 or older have children who have left their home. Millennials have a great appetite to live closer in compared to prior generations, but we’ll eventually see more and more Millennials buying out in the suburbs as they begin to have children. These family segments don’t want to maintain as much house and yard, but instead want to be located closer to jobs and services, like health care, parks and entertainment venues. They would gladly trade a single-family home with a big back yard for that urban convenience and lifestyle. We’re seeing Houston’s homebuilding community catching up to demand.

This interview has been edited for length and clarity.

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