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Posts from December 2011

Houston moving forward with longtime Luce Bayou project

Posted on December 29, 2011 in



The Trinity River runs downhill from near the Oklahoma border to Galveston Bay, but it also follows another cardinal rule: Water flows toward money and power.

After decades of fits and starts, Houston is pushing forward with plans to move Trinity water nearly 30 miles to Lake Houston. The reservoir, located on the smaller San Jacinto River, fills the taps for millions of people in the region.

Planners say the Luce Bayou project, a nearly $300 million pipeline and canal, would provide water to the ever-swelling city and suburbs while helping with the area’s planned conversion from groundwater. The newly adopted state water plan identifies it among the key strategies to slake the region’s thirst in 2060.

While population growth and a wicked drought boost the prospects for the mega-plumbing job, critics are asking how much water does Houston need. To their dismay, the answer is always the same: More than it has.

The project, they say, could invite too much growth, encourage more transfers from water-rich East Texas and damage native habitats along the Trinity and in the bay.

“This project is a game changer,” said Brandt Mannchen, of the Sierra Club’s Houston group.

Interbasin transfers of water to meet growing demands are not new to Texas, but the strategy will become more prevalent in the future. The new state plan, for example, includes a $2.4 billion effort to move water from a reservoir on the Sabine River to the sprawling Dallas and Fort Worth area, which is in the Trinity River basin.

A longtime dream

The Luce Bayou project has been a dream of water planners for decades. A task force first identified the meandering stream as a way to provide Trinity water to Houston in the 1930s.

Two decades later, the city obtained a permit that allows the transfer of up to 940,000 acre-feet of water from the Trinity to the San Jacinto River basin each year. One-acre foot, equal to about 326,000 gallons, is enough to serve two typical Texas families for a year.

In the 1960s, Houston built a pumping station and canal system to send a portion of the water to purification plants on the east and southeast sides of the city. Still, the city never has fully utilized its rights to Trinity water.

Luce Bayou resurfaced as an option for moving more water westward in the early 1980s, but the project stalled in part because of a sagging economy.

Since then, the proposal has changed significantly, with the Trinity water no longer flowing through the natural channel to reach Lake Houston. The surge of new water would have caused flooding and wiped out natural features along the path of the stream, said Donald Ripley, executive director of the Coastal Water Authority, a quasi-governmental body that is developing the project for the city of Houston.

“It is clear that plan was not environmentally sensitive,” Ripley said. “If we had asked for a permit on that application today, it would have been dead on arrival.”

Now, from a proposed pumping station on the Trinity, just north of the Liberty County town of Dayton, the water would flow about four miles by pipeline to a settling basin. From there, it would travel 24 miles under gravity by a high-banked, earthen canal to Lake Houston.

The proposed project would harm 200 acres of protected wetlands, mostly bottomland hardwood forest. To offset the damage, the water authority has purchased a nearby 3,000-acre tract for the Trinity River National Wildlife Refuge.

As primary steward of the nation’s wetlands, the Army Corps of Engineers is studying the project’s potential environmental impacts. A draft analysis should be complete in early 2012, said Sandra Arnold, a Corps spokeswoman.

If the project meets the Corps’ requirements, the federal agency would grant a wetlands permit, which often is the most significant obstacle to building. The Coastal Water Authority’s Ripley said the pipeline and canal are on a schedule to be completed by 2020.

Luce Bayou would deliver up to 450,000 acre-feet of water a year. The city of Houston already has agreements to sell some of the new supply to water districts in north and west Harris County and Fort Bend County.

Enough conservation?

The push comes amid state forecasts showing the 15-county Houston region growing from 6 million people to 11 million during the next half-century.

The new state water plan also identifies five new major reservoirs by 2060 to provide enough water for the region in times of drought.

Critics say the state plan promotes more pumps, pipes, dams and canals ahead of saving existing water. Although the plan calls for 12 percent of the supply in 2060 to come from conservation, they say more could be done.

With Luce Bayou, “we will have capacity well into the future,” said Jim Lester, a water policy expert at the Houston Advanced Research Center. “My fundamental problem with this is, we are doing so little on conservation.”

The Sierra Club’s Mannchen said the project continues an endless cycle of increasing water supply to meet growing demands. Eventually, Houston may be forced to go farther east to grab water from the Neches or Sabine, he said.

Another concern is the potential impact on one of the nation’s most productive and commercially valuable bay and estuary systems.

Both the Trinity and San Jacinto Rivers empty into Galveston Bay, but at different points. The bay’s northernmost lobe likely will become saltier with less water from the Trinity, experts said.

Although it is unclear how the Luce Bayou plan would alter the bay, the key will be to avoid prolonged drought conditions because of management decisions, said Myron Hess, manager of the National Wildlife Federation’s Texas water program.

While water transfers between basins make use of existing supplies, Hess said, “you need to ask if it is water you can afford to take.”

Apartments to multiply inside the loops

Posted on December 06, 2011 in


High occupancies and rising rents for apartments are driving a new wave of development in Houston’s high-end urban neighborhoods.

More than 3,500 units in a dozen complexes are under construction primarily inside the 610 Loop and around the Galleria. Nearly 8,700 more are proposed, according to Houston-based Apartment Data Services. Most, if not all, are being planned with top-notch finishes and high-dollar rents.  The flurry of activity is meaningful after a period where construction was virtually nonexistent. Amid the nation’s economic crisis, developers couldn’t get loans to start new construction and the appetite for apartments soured as renters moved in with relatives or doubled up in units.

But with the local job market beginning to recover, demand has been ramping back up, and the numbers of available units are dwindling. Few are concerned about a glut.  “If we ever needed construction, we need it now and need it soon,” said Bruce McClenny, president of Apartment Data Services.

Most of the units won’t be ready until late 2012 at the earliest.  As a result, rents are escalating and landlords of upscale Inner Loop properties have stopped offering aggressive concession packages.  The occupancy rate for high-end apartments is 93.4 percent, and the rents are up about 8 percent over last year to an average of $1,237 per month, according to the data firm. That’s the highest rents have been, McClenny said.

Developers are reacting fast.  They’ve been tying up vacant inner-city parcels or buying buildings in good locations that they can demolish. 

The Houston-based Morgan Group recently tore down the former Central Presbyterian Church in the Greenway Plaza area to develop a new complex where rents are expected to top out at around $2,300.
Gables Residential just razed the J.B. Earthman funeral home at San Felipe and Bering for a project. And Archstone has started to redevelop the Arabia Shrine Temple site on North Braeswood for a 474-unit complex.

To be sure, the bulk of the construction is inside the Loop - mostly concentrated in the western portion. There are a smaller number of new projects in The Woodlands, Kingwood and Katy. More are planned for those areas, and others, too.  Companies that provide equity financing largely prefer so-called “core” areas, developers say, referring to the nicest parts near the center of town.

As development heats up, could the market get overheated?  Most experts say no.

“It’s meaningful construction, but not over the top construction for Houston standards as long as you’re in a period of economic growth,” said Greg Willett, vice president of research and analysis for the Carrollton-based MPF Research.

While developers are paying close attention to the single-family housing market - whose troubles have benefited the apartment industry - job growth is the biggest driver of apartment demand.  Traditionally, every six to seven jobs will create demand for one apartment, McClenny said.  The Houston economy is on pace to finish 2011 with more than 66,000 jobs added for the year, according to economist Ted C. Jones of Stewart Title Guaranty Co. He predicts another 62,000 jobs will be added next year, with oil and gas exploration and production, construction and manufacturing to be among the sectors leading the growth.

Also, not all the projects in the planning stages will be built.  Citywide, McClenny expects about 3,500 units will be built this year and no more than 10,000 next year.  Those are small numbers compared to recent years.  The most recent peak for multifamily construction was in 2008, when more than 21,000 units were completed. 

While there’s more capital moving into the multifamily market, financing commercial real estate can still be a challenging experience in today’s shaky global economy.  Developers in the business are optimistic.
“On the whole, we feel really good and are not too concerned about the number of units getting proposed,” Greystar’s Scott Wise said. “But there is a herd mentality for equity to go to infill locations, and it could result in a concentration of deliveries and temporary softness.”  Wise said he’s watching the supply situation, but isn’t too worried - particularly because the company has already broken ground and will have one of the first new projects to open.

There are other signs the market is on an upswing. Some companies are stepping up their efforts in the sector.  Earlier this year, the Hines real estate firm that built many of downtown’s skyscrapers said it was expanding its multifamily business and announced a 300-unit project for a site near the Williams Tower. Groundbreaking is expected early next year.  And just last month, an executive with a Los Angeles-based real estate fund affiliated with basketball legend Magic Johnson said the company was scouring the Houston real estate market for multifamily developments to invest in.

“There’s a sea change of where and how people live,” managing partner Bobby Turner told the Chronicle in October. “There’s been a migration from homeownership to home-rentership.”