Excerpt: Can A Market-Oriented City Also Be Inclusive?


In a new chapter, Kinder Institute Director Bill Fulton considers Houston's opportunities and challenges when it comes to creating a truly inclusive city.

Downtown Houston

In a new chapter, Kinder Institute Director Bill Fulton considers Houston's opportunities and challenges when it comes to creating a truly inclusive city.

"Houston," writes Kinder Institute Director Bill Fulton, "would appear to be a city of unparalleled opportunity for this diverse population, and in many ways, it is." It has a reputation for affordability, often linked to its relative lack of regulation. "But the big picture masks growing inequality and disparity that is at least as bad as, and perhaps worse than, the national average," continues Fulton, in a chapter from the recent publication, "A Shared Future: Fostering Communities of Inclusion in an Era of Inequality" released by the Joint Center for Housing Studies of Harvard University.

In the following excerpt from his chapter, Fulton examines some of the ways in which Houston, with its unique approach to planning, can become more inclusive and tackle what is a national and growing problem. Read the full chapter here.

Houston is at once a market-oriented city and one whose regulatory system and financial incentives do not always align with the goal of inclusiveness. Within this seemingly contradictory set of conditions lies the opportunity to create a model for a more inclusive, market-oriented city. Specifically, four actions can help shape the market-oriented approach.

Align Economic Development Incentives with Inclusiveness Goals

As stated above, Houston actually does provide financial assistance to real estate developers in the form of so-called “380 agreements”— economic development agreements to provide financial assistance to developers. However, these incentives are not aligned with goals of inclusiveness. The city rarely seeks, for example, affordable housing in return for economic development incentives.Aligning the city’s own economic development incentives with inclusiveness goals would go a long way toward helping inclusiveness in Houston. In his Transition Team Report, Mayor Turner endorsed the idea of focusing the city’s “investment resources,” everything from housing assistance to public works projects, on underserved neighborhoods.This goal is contained in the city’s 2015 general plan, which Mayor Turner has directed his staff to implement through its budget process. But the impact of “Plan Houston,” as the general plan is called, is still in its infancy, and the city has not yet implemented a set of policies and strategies that delineate how it will concentrate resources in underserved neighborhoods. Mayor Turner is expected to provide detail in a new initiative he calls “Complete Communities.”

Align Regulations with Inclusiveness Goals

Although Houston does not have use zoning, the city does have a wide variety of conventional development regulations — notably, parking and setback requirements — that drive up the cost of housing development and make the city less inclusive.The city should relax or adapt such regulations in specific locations where it hopes to encourage inclusive development.As the transit-oriented development (TOD) ordinance experience suggests, such regulatory relief must be carefully crafted if it is to be a preferable alternative to simple market-rate development that seeks variances from the planning commission.

Use Government and Institutional Landholdings Strategically To Pursue Inclusiveness Goals

Houston has an abundance of land even in close-in locations, though in many cases real estate speculation is driving up the cost of that land to the point where only high-end market-rate development is possible. However, especially in close-in locations, much of the land, especially vacant lots and parking lots, is owned by either government agencies such as Tax Increment Reinvestment Zones (TIRZ) or institutional entities such as churches.The city can move a long way toward inclusiveness by working with these entities to make at least some of this land available for affordable housing. Such an effort is already under way in the Third Ward, where a community land trust including some TIRZ and institutional land may be formed as a result of the joint efforts of neighborhood leaders and Houston philanthropies under the auspices of the Emancipation Economic Development Council.

Create a Broad and Comprehensive Approach to Inclusiveness Including Both Underserved and High-Opportunity Areas

Responding to concern about high-opportunity areas, the Turner administration is already considering a series of steps to encourage broader distribution of affordable housing, including more effective use of federal housing vouchers. Using this approach, and the steps outlined above, the city can create a comprehensive inclusiveness policy to encourage not only affordable housing in affluent areas but also mixed-income housing opportunities in historically underserved areas. Such a policy can take advantage of Houston’s traditionally market-oriented approach combined with the public policy levers available to the city and related entities. Mayor Turner endorsed the idea of a comprehensive housing plan in his Transition Team Report.


At a time when income inequality is giving more market power to the affluent, it is no easy task to create greater inclusivity in a market-oriented city. Despite its “regulation lite” approach — or perhaps because of it — Houston appears to be among the most unequal large cities in the country. Making the city more inclusive will require both a comprehensive citywide approach and targeted efforts in underserved neighborhoods threatened by gentrification.

Fulton, William. "Can a Market-Oriented City Also Be Inclusive?" In Christopher Herbert, Jonathan Spader, Jennifer Molinsky, and Shannon Rieger, eds. A Shared Future: Fostering Communities of Inclusion in an Era of Inequality. Cambridge, MA: Joint Center for Housing Studies of Harvard University, 2018.

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