Greetings, and welcome back to ZacCast, the official podcast for local government nerdery. We have some big news to talk about, but first, I'm Chad, that's Pat. And how are you doing, Pat?

I'm good, I'm good.

Having a great day.

I'm having a great day.

'Cause, uh, Aggies took care of business last night against my Longhorns.

Man, you didn't even let me get that out.

No, go ahead.

You, you had to go, you had to go ahead. Little bit of baseball last night. It was a little midweek, didn't matter according to the folks in Austin, you know? But, uh, it, it- midweek did matter to the people in College Station, and yes, Aggie baseball and Schlauch Negel came through. Big win, man. Big win. Like, not even close. The game was never close. We controlled you the entire game.

Yeah. Our last four games now have been pretty abysmal, so-

I will say, Max Belu, the Aledo product, hitting some home runs, and, uh, that's, that's fun to see. Good little, good little player there. But, uh, o- other than that, I don't cheer for anybody on the Texas squad.

That's fine. I wouldn't expect you to.

Yep. So... But, uh, also, I need to say for the record, um, I do not have cancer. So I'm gonna, I'm gonna point... We didn't even talk about this pre- pre-show, so I'm just gonna throw this out.

Mm-hmm.

I've had, uh, two people in the city business reach out to me, uh, because I'm a bit skinnier than I was.

Oh, okay.

You know? Uh, and so-

Yeah, that makes sense

... I've, I've had-

Okay.

And we really haven't, you know, I, I know that y'all-

You talk about it all the time.

I talk about it to y'all all the time.

Obviously, this is a way to weed out-

I don't think I talk about it on the podcast

... people who don't listen to the podcast.

Yes. Yeah, exactly. Uh, but I do not have cancer, so, um, I have less stress, and, uh, you know, that, that plays a significant role, um-

Less stress on the knees, probably.

Less, less stress on the knees, too. Carrying a few less pounds around, uh, and, uh, getting more healthy.

Fewer.

Yeah.

See, if you can actually count the things, then you use the word "fewer."

Mm-hmm.

If it's something that you can't actually quantify, then you use less.

Yeah, I'm really-

So I have less money, I have fewer dollars.

True. True.

Just, uh-

I'm a pretty-

... that's, that's your PSA for today, your grammar PSA.

Nice. Um, this w- somebody asked me the other day, like, what, what got me into the, like, the fitness mode, like, get-healthy mode, uh, and it's like the weirdest things in life. You know, it's... A- and it usually always revolves around my rife- wife, because I totally outkicked my coverage there. Um, but, you know, Jennifer made the comment to me that she wants to be married for 60 years, and I had to kind of look at myself and go, "This body's not built for 60 years of marriage." So we're, uh, we're doing that. Uh, the whole reason I went to, you know, the great Texas A&M University was for the same reason, so, uh, you know, and, and all that jazz. So, uh, real good. But the meat and potatoes of today's show, Chad, what's the official title? What are we coming out with here?

That, uh, is TBD.

Okay.

But what we can tell you is, if you've looked at your sales tax numbers, OMG. So last month, massive audit adjustments across the state. This month, the oopsy-daisy, let's put everything back the way it was. Like, that... Maybe we call it the Humpty Dumpty.

The Humpty Dumpty? I think the Humpty Dumpty- ... is a good way to look at it. And, and, and I think we actually mentioned in the last podcast, or we may have talked a- i- in between the podcast, uh, you know, we were, um... You actually put this best, uh, like, the, the biggest British understatement you could possibly have, "There could be some minor... You know, there could be some adjustments," I think was what we were saying.

Yes, it was, it was British-level understatement.

Yes, British-level understatement. There were full adjustments across the state. We went right back to where we started.

Yeah.

Uh, so there are some cities, obviously, I, I mean, we were looking at numbers here. City of Dallas was 14 million up last month, and now they're 14 million down. Uh, you know, just drastic numbers. Abilene was, like, four and a half. Abilene's four and a half the other way. Um, I think we, we even saw, like, you know, Roanoke, Texas, uh, a million dollars down last month, a million dollars up this month. I mean, they literally just put the money back.

Yeah.

Uh-

So I, I wanna start with one thing, 'cause we can talk about the logistics and how terribly this was communicated and all that kind of stuff. The worst part of all of this is that everyone's historical data is now shot.

Shot, yep.

Good luck trending on this without making your manual adjustments in every single spreadsheet that you have for the rest of e- you know, eternity- ... because y- good luck.

This is the biggest-

Thank you, Comptroller.

This is the-

This is my biggest concern, is that-

Yeah

... for crying out loud, now I gotta deal with all of these adjustments in, in consecutive months.

Not only that, they changed their website on you.

Now I gotta put my notes in there. Uh, yes, and they changed their website.

Yes.

So now-

And, and, and they put the negative sign after the dollar sign-

Yeah

... which means you have to code specifically for that issue.

Yeah. So now I have to go through and rewrite a bunch of code this morning, because the Comptroller's website has changed.

Right before spring break.

They are not on... They are not on my, like, nice list right now.

What's worse, right before spring break or right before Christmas break? I just wanna know.

It's not even that, it's that I have a bunch of other crap I'm trying to finish. So, like, I don't mind it just generally. Like, things ha- are going to change.

Mm-hmm.

When, when you're just scraping data off of a website, it's gonna change. It looks like this stuff is now in the open data s- section of their website-

Mm-hmm

... which is great, except that there's no county information.

Yeah.

So how am I supposed to get-

We have a few of those

... that information for our counties? Um, but you know, we have this, this portal. We call it OpenZack, and it's basically... Before there was an open data platform from the Comptroller, you had to go onto their website and search in these really ancient forms to get your information. So we put all of this into a big database, because we needed it in our, in our platform, and so it's just open there. You can go see it and, and access it. Um, but now I, I can't get any county-level data, so it's gonna be, gonna be a fun afternoon. C- can we also talk for a second about how lax the Comptroller is with their naming conventions?... sure. Okay, so if you're looking through here, you see things like Dallas, Dallas MTA, Fort Worth, Fort Worth MTA. That's okay. Like, I can-

Mm-hmm

... I can deal with the consistency on the MTAs. Then you get to crime control, and I th- I think most of them are called crime control.

Some are CCPD, right?

Some of them are crime control dist., whatever. Then you get to the municipal development districts, and maybe is it gonna be, like, municipal development district like crime control is? I don't know. Is it gonna be MDD, like, uh, MTAs are? Uh, maybe. No, it's gonna be mun dev dist in their names. Like, what kind of abbreviation is that?

Twitter. I mean, they only had so many characters to play with, right?

Yeah, but MDD is a lot shorter.

I, I was just trying to give you a good excuse.

Right.

I didn't have one.

And don't get me started on the addressing.

It's-

The addressing that people- that the comptroller allows on sales tax permits is absurd. The worst one that I ever saw, I, I wish that I had saved it. It was, like, half mile north of FM 70. Like, this is the physical address on a sales tax permit.

Has it still not changed? Do, do they not use, like, the standard USPS system now, where you have to, like, fill it out on a form and, like, pick your address?

So they do that for the sales tax rate lookup.

Okay.

But no, the, it-

The permits could still be filled out by hand and mailed in

... to me, you can pretty much put out whatever you want on the permit.

Yeah. Yeah, that probably goes back to, like, the old school IBM data contract that they've had forever.

I don't know.

So-

Just a little bit of QA/QC while you're inputting data-

Mm-hmm

... seems like it could go a long way.

It, it, it would be helpful. I mean, at the... You know, we haven't talked about the 2% fee and the difference between the fees that we've seen in different states. Um, you know, the, the 2% administrative fee that the comptroller charges comparatively to other states is massive, right?

Yeah.

So what, what are we seeing in California? Like, what's their fee?

I- it's, like, 0.017. It's like, it's, it's negligible.

Okay.

Like, so-

You may have, you know-

Um-

0.017%, not-

Yeah

... 1.7%.

Correct.

Okay.

So, like, you may have, you know, $4 million allocated in a quarter, and you pay $27,000 ad- admin cost.

Yeah, whereas-

And-

... in Texas, you're paying a full-on 2%.

Yeah, and I'm just gonna tell you guys, the amount of work that the California Department of Tax and Finance Administration, whatever it's called, the amount of work that they do trying to figure out and coordinate all of these weird allocations is absurdly complex.

Yeah.

I, I don't- it, it's unnecessarily complex.

Yeah, well, they're-

But it's a lot more work than-

Yeah

... just pa- just for cost.

I mean, they're m- they're making their 0.017%.

Oh, yeah.

They're working hard for that 0.017. But, um, yeah, I mean, I, I think, I, I think that's been the shocking thing to me, is just how much money is flowing into the comptroller's office with that. It really is going into state coffers, right? It's a revenue stream for the state-

Mm-hmm

... from the locals, uh, on that percentage. And so, yeah, that's-

Yeah, so look at this

... that's wild.

Uh, you keep talking, and I'm gonna try to find out... I'm gonna try to find this.

Well, I mean, look, is this shocking to us that there's this great reversal in the audit adjustment? I, I don't, I don't think it's shocking to us. I, I think we still have questions, like, is this a reversal and, like, we're going back to normal, or is this a reversal and they're about to send everybody a letter to tell them they're gonna take it out over the next 12 to 18 months? We don't know. We have no idea. But it was such a drastic audit adjustment without any notice or preparation or telling any of, you know, the cities that were out there. I mean, nobody in the state of Texas got a letter, nobody got a phone call. Um, nobody in an entire half of the comptroller's office even knew it was happening. So, I mean, so obviously we're still trying to work ourselves around, okay, what exactly occurred? And, and I think we need some transparency on that, right? Like, we should hear from the comptroller's office or from the comptroller himself, who, by the way, massive amounts of respect for. I, I don't, I don't wanna take away from that. In all of the grand scheme of politicians that we have in Texas right now, and all of the crazy that we have, he's a very good guy, okay? But we need an explanation. Like, we're gonna need some transparency on this. The cities are gonna need to understand why so much money was moved around in a single allocation. Um, and there probably has to-

Yeah, um

... if it's, if it was wrong, there needs to be a Mia Copa somewhere.

Go away, Siri. Uh, what is this? Is this just cities? So cities paid $17 million in that 2% service fee this month.

This month, 17 million in one month to the comptroller. Yeah, how many employees does the comptroller's office have?

Well, here's the thing-

Oh, hold on. No, we gotta look that up. While we're live-

You can look it up, but it also has to be relative specifically to things that touch local sales tax allocations.

Well, I'm, I'm, I'm guessing that even when you do the math, it's not gonna matter, so let's, let's look that up.

Oh, no, $17 million in payroll every month? No. Certainly not for sales tax. They may have it overall, but not for sales tax. This is called podcasting on the fly, folks.

It is, 100%. We should have prepared for this one, I'm sorry. In April of 2020, the comptroller's office had a total headcount of 2,760.

So that would be... Assuming everyone made $100,000 a year, that's $23 million a month in payroll.

Correct.

For the entire-

Yeah, it's 276 million, and what was the local allocation this month?

17.

Okay, so-

But, I mean, I, I don't know what the average pay rate is. It's probably a little, little bit less than 100,000.

Well, that's gonna be public, too. Let's go see.

Do they actually have, like, a decent line item budget that you can look at?

Well, the comptroller, the actual elected comptroller himself only makes $153,000. The deputy comptroller chief of staff makes 276,000.

... don't tell the Texas Public Policy Foundation about that.

Yeah, d- somebody, somebody don't tell them that, 'cause that- We, we didn't even talk about the Austin nonsense, about, uh, the Austin city manager making 475 and the Texas Policy Foundation. If you wanna get a, a hoot out of that, you should, you should just-

Go follow me on Twitter

... check out Chad's Twitter. Yeah. He's been having some fun with the Texas Policy, uh, Founda- what is it, Texas Public Policy, Texas? What, what do they call themselves?

TP- yeah, TPPF.

Yeah, okay. So, um, but yeah, don't, don't tell them the deputy comptroller's making 276,000. That would, that would send them off a ledge, right? Okay, total appropriation in 2023 to the Comptroller's office was $322 million. The total appropriation, right? So let's, let's say that, um, if you look at it... And this, this would be a bad month-

Yeah

... to take it off, so this would be a low month.

No, it would be. But we basically-

Yeah

... this locals, local sales tax, just the cities alone paid something like 60% of that monthly budget.

But yeah, we, we paid s- we paid 60% of the annual budget, right?

Why are the locals paying for the comptroller?

They- they- correct.

It's ridiculous.

It's, it's crazy. Why... But the s- the state doesn't, the state doesn't look at that local fee as like a, a revenue to the Comptroller's office. That local fee is sent to the state budget, and then they get appropriations on the-

Yeah, 'cause money's all fungible.

Yeah.

I understand that. Yeah.

So, we should- somebody should ask that question.

Yeah. It's a lot of money.

It's a lot of money. Like, why are we taking so much money from the lo- how is that not, like, a statewide... I don't know. It seems-

It's just always been that way, so.

I mean, I guess when sales tax wasn't that high, it wasn't that much money? I don't know.

I- yeah, I guess, uh, like, if you just l- think about it, 2% seems like a, a reasonably modest fee for-

That money you, yep

... administering, but it's-

Yeah, but that money you're talking about-

It's a lot

... that money you're talking about, you didn't, you didn't put counties into that equation. We just looked at cities and special districts.

No, that's just cities.

That's just -

That's just cities.

So hold on. Do, do we have the historical county information?

Um, so I just went to the city sales and use tax comparison. That was... Okay, so that was actually for February, because their website isn't updated yet.

Uh-huh.

So that was for February, which is, which is December, right? December sales.

Yep.

Um, let's look at counties.

That may be the new T-shirt we have to make, by the way. "Give us our money back." What do you mean?

That's gonna require a lot of editing.

No, we should leave, we should leave all the math there, so people can figure it out.

Okay, so-

Transparency

... 861 plus 80-

Okay

... plus 293-

Okay

... plus 125.

Okay, it's 1.359 billion.

Okay.

Okay, times-

So about 26 million.

.102. It's 27.18 million times 12.

Okay.

Annualized.

Yeah, but that's, that's February. You're wel- I wouldn't-

You wouldn't annualize-

I wouldn't count that.

What do you mean February?

I would not annualize February. February is usually about 12% of the total revenue. So you could divide it by-

No, this is not... Oh, you, you went back a month to-

Yeah

... 'cause that's where the county data was.

You could divide it by 0.12.

Say that again?

27 million divided by 0.12 is 225 million, would be a more reasonable estimate for how much that service fee costs.

Okay. Yeah, 226.50 million. And our total budget-

Yeah, 60% of the budget. 60, about almost two-thirds of the budget.

Okay.

Yeah. You're welcome.

You're welcome.

All right, so after that little divergence, you got anything else left to say about this, this whole fiasco?

I, I mean, what, what is there to say? Oopsie daisy. That's all we can say. Uh...

I st- I still just don't understand how an adjustment like this gets into the, the, the system without some kind of, like, double-checking. Like, there are not two keys that you have to turn when you're gonna be moving millions and millions of dollars across cities?

This is like the launch codes on the Alabama.

Mm-hmm.

Denzel Washington, "Like, somebody's gotta stop it." What movie is that?

I don't know.

Okay, I don't remember either, but I just remember it as a kid. Gene Hackman was the captain of the boat.

Gene Hack- oh, hold on. I gotta go type it up.

We don't have to take it easy.

Are you sure it was Denzel?

Pretty confident it was Denzel, right?

Oh, Crimson Tide?

Crimson Tide, yeah. He had a little dog.

I, I forgot that, uh, that Denzel was in that movie. I haven't seen it in 30 years.

That was... Dude, that was, like, one of my favorite Denzel movies. He was fantastic in that movie. So all that being said, all I have to say is, oopsie daisy, let's move on. Let's talk about something else. What's our next topic?

Uh, this is... So how, you want, you wanna dig back into the conversation we had in the green room?

Yeah, so I mean, um, so the primaries just happened-

Yes

... right? Yes- yesterday was Super Tuesday. The primaries just happened. There were, uh, a lot of elections. There was a lot of issues. Um, and so Chad and I kinda got talking, like, "You know what? What are some, like, local government issues that we should be talking about?"

Yes, and Patrick mentioned that he's coming a little bit more around to, to my side of the fence on certain topics. And I asked him, where an issue like zoning reform or housing reform, right? We've talked a lot about how this is being done in California. It's being done in Montana. Liberal states, conservative states, like, they're doing the same things because-

Mm

... I think we're kind of realizing that, um, there might be certain topics where giving complete control over those issues to, at the city level, can result in some kind of free rider and collective action problems, right? Because if one city refuses to allow housing, they might be able to avoid most of the negative consequences, or a lot of them, but they get pushed into other places in the region, right?

Mm-hmm.

We see this here by the fact that some of the fastest growing suburbs in DFW are, like, an hour away from Dallas.

Yep.

Like, it's crazy how far and quickly we are spreading horizontally.... there are economic reasons for this, right? 'Cause land is cheap, transportation costs are, are generally going down, although that- I think that is changing a little bit, 'cause cars are so much more expensive than they used to be.

Yep.

At least it seems like they are with interest rates going up, right? But those are kind of short-term, uh, trends. Um, generally speaking, the cost of transportation has gone down, uh, you know, over the past hundred years. But if one city can make the choice to not build housing, and that causes negative externalities on other cities nearby or the region as a whole, is that a place where maybe we should look at state-level, um, not imposing new restrictions or regulations, but actually just taking away some of the authorities to, to cause those externalities? This is, this is the one area of local control where I've really struggled over the past year or so, is on housing and development.

So my response to you in the green room when we were talking this through was, I feel like- so the reason that my opinion has changed on this is not... And it- and my opinion's not really changed that this should be, like, a statewide-mandated thing, right? I would agree that zoning authority is actually a state-driven policy, right? If you look at statute, you look at the history in Texas, you go to the grad schools and talk about this, like, the State of Texas established zoning authority within statute, right? So general law municipalities have zoning authority, home rule, everybody in Texas. And then even counties, there are certain counties that have planning authority as well, uh, in addition to the cities that are in those counties. But for me, it's I feel like there has to be somebody or something or a message. I, I don't think you can force upon somebody this belief system, right? I, I feel like you have to spread the gospel here. You, you have to go out there, and you have to talk about these things, and you have to have a grassroots movement of conversation on it.

Mm-hmm.

Uh, which we don't have, right? Like, we don't, we don't have that in Texas right now. We don't talk about it. If, if you look at every major suburban sprawl area, and you go to the local Facebook page, and you are gonna see, every day, constant complaints about traffic-

Overcrowded schools.

Constant complaints about overcrowded schools, um-

Runoff.

Yeah.

Drainage.

Runoff. Yeah, "Somebody's taken my next ranch," right? Uh, "That was a beautiful view."

Yes, "I'm losing my view of someone else's property."

"I'm losing my view." Yeah, "on somebody else's property."

"How dare they develop that?"

100%.

Of course, and no one uses-

You see that one all the time. Yeah, but like you... And I think what we really need to be talking about is, what is the fiscal impact of that development? Because I can tell you, I mean, in, in Parker County, cities now- so, so the, the, the state's changed to ETJ and annexation reform, and I know cities, like, for the last two or three years, and, and with ETJs for the last year, have really, like, said, "Oh, you know, this is- this stings," right? I actually look at this the opposite direction. I, I think this is a, this is a, like, a, a really big problem for the state. Um, this is kind of like the you break it, you buy it Coleman Powell scenario, right? Like, the state has now said, "Developers can go out and develop how they want to develop. They don't have to be... Y- you know, there's no planning authority for the cities in those areas if they want to release from an ETJ," blah, blah, blah, blah, blah. And so I think it's a big problem for the state because there's a lot of development going in that is not going to make enough money for the county to support the level of services that they're gonna have to provide to that, right? Uh, whereas the city was at least sort of, kind of maybe looking at that, or at least had a tax rate- ... in addition. Yeah, I mean, that's a, that's-

Sure

... definitely laughable, right?

Yeah, they were.

They're, they're looking at it more now than they were 10 or 15 years ago. We're seeing cities with strategic services departments, right? We're seeing cities go in there and create analytic groups, right, to start looking at these issues. Um, you know, obviously there were early leaders in this. You know, I, I think the easiest example is, like, Nashville, where they started cutting off ETJs and cutting off city limits and things like that, right? But I just don't think you can go to the state, and you can say, "Everybody has to develop X percentage of housing." That, the, so that, that's kind of what California has, right? California has, like, a... They have to meet a minimum percentage development standard in their city on an annual basis, and, and they can't really deny what's coming through that process. It's, it's, it's more complicated than that. I kind of simplified it-

Yeah

... but, um-

And if they do, then you have, like, this builder's remedy, where you can get outsized density and things like that. So you see-

Correct.

There's an area in San Francisco where there's a proposal for a huge tower, and there's doesn't seem to be much the city can do to stop it.

Yeah.

So everyone's freaking out about it. The problem is when you don't allow incremental density-

Mm

... then you get, like, this backlog. This- it's like pulling a rubber band, right? And you just hold it, pull it back further and further, and then when it snaps, it goes really far, right? Like, if you just allow a little bit of density to be incrementally added, then you can avoid all of that pent-up demand that just finds its, its resolution in huge projects-

Correct, but my-

... which seem out of character with what's around it.

Correct. But m- my, my argument would be is the data is available today. Um, and I wanna be clear. Look, we can do this analysis, and I'm not trying to sell this service. I, I just, I think it's important that people do this, and there's no magic in the sauce, right? But the data's available today in every single community, for every single development that comes in. You should be able to establish what a minimum return on investment for that type of development needs to be. 20 years ago, maybe we couldn't do that, but now we can, right? So if somebody's gonna come in and build multifamily housing, you can establish specifically what the return on investment of multifamily needs to be. Single-family, quarter-acre residential, here it is. One-acre residential, here it is. This is... You know, e- everything can be-... can be done in a way that is gonna be fiscally sustainable. And I think that is the conversation that needs to be had locally at city councils. That, that should be the remedy to me, that should be the remedy to NIMBYism, in my opinion. Um-

That's, that's a very idealistic way to approach it, and I, I appreciate the idea of changing hearts and minds as a better long-term solution.

Mm-hmm.

Um, I guess I'm maybe just skeptical that-

That-

... that's gonna work.

I think of-

Because, uh-

I think of-

Because the loudest, the squeakiest wheel, you know, issue in city council chambers. So-

Is that why that concerns you?

Our processes have empowered incumbents to an outsized level. So if-

Right

... you are an existing property owner, if you're retired, you have time on your hands, and the most important thing to you is your property value, and you think all these things are gonna increase your prop- or reduce your property values, if these things bother you, you, uh, have time to go and be a squeaky wheel.

Mm-hmm.

Right? And so that is just given, I think, a little bit too much weight in some of these decisions, right? I mean, you've seen councils who will buckle under the pressure of two people-

Yep

... uh, on a, a, a s- minor library cut funding or, or park-

So you're saying cities-

... changes

- cities need cover-

It's, it would be cover

... in order to change what we've been doing for the last 50 years.

But I think it's also important to look at why did we make this change in the first place?

Yeah.

And, like, what were the causes of... What were the s- what was the situation on the ground that led to us thinking that zoning was the right solution to planning our development, okay? It was-

I mean, a lot of that came out of post-World War II, right?

No-

A lot of that was 19-

... it was before that. It was, it was the Industrial Revolution, right? 'Cause we had this-

Okay

... massive urban concentration between, like, 1860, '70 and the early-

Yeah, I was thinking m- I was thinking more urban sprawl, but I see-

Yeah

... not zoning. But yeah, okay.

Yeah. So we have massive concentrations of people in urban centers way, way more quickly than cities were prepared to handle it. So you had poverty, squalor, disease, crime, like, uh, uh, all of these, these bad things. And the solution was, "Well, let's just plan our way out of it," right? This was the early Progressive Era, scientific management. Like, we can use our minds to solve this problem and plan better, so we'll put things- put like things next to like things, and we'll separate noxious uses from, you know, residential areas. Like, we don't wanna have a glue factory next to a house, right? Like, this is like a prototypical argument.

Mm-hmm.

And then you can kind of see that just carrying forward. Like, we don't have glue factories next to houses anymore, but, but now, like, apartments are the new glue factories, right? Which tells you a lot about what certain people think about any kind of density, that an apartment is as noxious to a residential area as a glue factory was 100 years ago. And so instead of integrating them into our residential areas, we're just gonna stick them off on the side of the highway, so they can deal with all the traffic noise and the tire particles and all that, all that stuff. So to, to try to solve this problem of rapid urban, urbanization, we created this entire new framework and kind of threw all of our his- our prior knowledge about city building kind of out the window, because we're gonna solve this through logic and reason, right? But cities don't really work that way. It's not like a mechanical system. It's not a water system, where you could just turn this valve, and you know that the water's gonna come out over here, but if you turn that valve, it's gonna come out over there, right? It's the interplay of people and ideas and businesses, and it doesn't work in that kind of mechanistic way. So we fast-forward to today, and what I'm suggesting is that maybe if we think about what we lost and the way that we approached that problem as maybe having been the wrong way, then going back to the... at least, like, moving in the direction of how we used to do it isn't necessarily like a, a revolution. It's almost like the opposite.

It's like going back to the basics?

Kind of.

Okay.

So, like, uh, I-

But your-

I don't know that it's-

... your solution for going back to the basics is we have to change it at the state level. Like, we have to remove the authority at the state level?

Well, it didn't, the-

Or limit it?

Just say zoning authority specifically did not exist until really, uh... We didn't, we didn't do any kind of thing, a- anything that resembled Euclidean zoning until the early 1920s. Zoning authority today is derived from the state, so I don't know what else you would do. You- I guess your options are, you can just rely on the, on the goodness of of your localities, or you can say, "This, this is actually- we, we went too far with this, and so we're gonna scale back this authority." Is that an argument against local control? Kind of, but-

What about building standards, though? Like, what about... I mean-

I think building standards are a huge reason why housing is so unaffordable.

Okay.

Why can't we have single-stair apartments? 'Cause we have to have two points of entry, right? So we end up with double-loaded corridors, so every apartment complex basically feels like a hotel, right? That means they have to be bigger. So we add all these things because logically, they make sense, right? Like, the fire department says, "These are the things that we need," and the police department says, "These are the things that we need," and street says, "These are the things that we need," right? And so y- when you look at them isolated, they make sense logically, but when you put them together, it just makes everything so much bigger and more expensive. You can't do small projects. You can't do things in a way that would actually be more affordable, 'cause you have all of these things, these costs that are added onto them, which make that small-scale development not feasible. Then you couple on top of that the financial side of it, where you can't get lending unless it's you're doing something that has been done before, right, that follows a very s- formulaic, um, approach. We, we just, we have put ourselves in a position where you can't actually-... do unique things or small things anymore. So it fits in-

Because it has to be so, 'cause it has to be so cookie cutter, and it has to be so-

And because it has so much-

rigid to the standards

... so many requirements on it.

Yeah.

So, like, it fits nicely with the fact that we have limited incremental growth, so much that we do have that sort of slingshot demand, right?

Mm.

It's, it's not like a slowly sloping line, it's like a s- like a stairstep, right? Like, demand gets so high that we, we pop up a couple of layers-

Mm

... and then, then we do it again, versus just having a gradual slope that, that increases as population increases as time goes on. So it, it fits nicely with that environment that we've created, but it's not ideal for the long-term sustainability of our cities. So you look at the question of local control from a perspective of subsidiarity, which basically says that whatever- a decision should be made at the place where it is closest to the people affected or to the people who bear the costs, but not any closer, right? So if you're in a situation where one city is not allowing development, and it may not be affecting them greatly today, but it is affecting their neighbors and their region, then maybe that's not the right place to make that decision. I think the same is true on economic development incentives.

Ooh.

I think that... I, I'm leaning towards maybe those should be either more regional or more state level. It doesn't make any sense for a, for a city to be incentivizing, like, a r- a retail development, that could, that could just go across the s- the street, and it's in another city, right? All we're doing is just giving away money. The economics don't change, whether you're on this corner, this hard corner or the other one that's in a different city. And when we've started to go through and look at some of these 380 agreements on the comptroller's website for a, an undisclosed new feature that we're discussing-

Mm-hmm

... um, some of the things that people give money for, they don't need to be giving money for those things. So I, I, I think it's harmful. And this sort of competition that we have created between cities to, to try to win these deals, maybe that's not the best place for those decisions to be made either.

Well, I think the, I think the problem... I, I think you have a point on that one, and I had this conversation with another city. Because every city manager has a fiduciary responsibility to their city, so that they- if they can get something and incentivize it and still make a margin on it, at the end of the day, they're gonna- it's gonna be a race to the bottom, right? To get that user.

That's a big if, though.

I, I get it. I get it, but it's also the same thing on ETJ reform. Like, you know, there was a news story the other day that Fort Worth was trying to negotiate with all the surrounding cities to get everybody to agree not to allow developers to swap ETJs. That sounds great, right? But those city managers have a fiduciary responsibility individually to their city, so if they could pick up a hard corner at an intersection to a developer because they can serve it with utilities faster than somebody else, I just don't see that city manager of that other city saying no to that because of what his overall fiduciary responsibility back to his community is, or her community. I, I, I think it's really... I get where you're going. I don't really have an opinion on it yet, 'cause I really have to think that through. Mm.

The truth is-

I, I don't-

... I don't really have an opinion about it either. I've just been-

Mm

... trying to think through them, think through these issues from different perspectives, because we do have problems, and I'm just not sure of the best way to, to solve them or the best place to solve them. So, like-

I think both-

... I used to be 100%-

Yeah

... I would s- like, five years ago, I would've said 100% zoning is a local control issue, and taking it away is bad. But now I'm just starting to th- think about it from a different way to see if maybe there's more nuance than just throwing out local control. 'Cause you see, like, leagues of cities all over the country are constantly fighting things like this that are actually are causing detriment to their cities, right? A city that's not developing when there is demand is causing long-term fiscal stress for future residents, period.

Because of the increase in housing cost, because people are gonna have to live there one way or the other, right? So-

Yeah

... messing with that demand system is gonna cause stress.

Uh, yeah, among other things. Yeah.

Yeah. Okay.

And across the board, the biggest reason that we're dealing with constant property tax, quote-unquote, "reform", is because housing prices are going up so quickly, and people don't wanna pay the increased taxes that are associated with them. But they don't want to allow any more development that would keep housing prices more reasonable. So y- cities are in a rock and a hard place how to deal with this, and I don't know that they have the tools right now to solve those problems, at least here in Texas. 'Cause if you can't overcome the, the squeaky wheels and allow development to occur, and allow it to occur in a way that's friskally- fiscally prudent, which is also tough, and the alternative is that you just keep getting squeezed on your property taxes, then I, I don't really know where you go if you're in that situation. I think there's, there's places to go, but I'm not sure that any of them are good.

I, I think that last statement you made right there is extremely important. I think that last statement is, is the reason why we need a deeper conversation on this topic. I think the professionals in the business would say, "When we have demand to develop, we need to develop. When we have demand to redevelop, we need to redevelop," right? When those things occur. Manhattan did not start as Manhattan, right? It started as dirt roads and wood structures. So I agree with you that the squeaky wheel and the constraints that we've put in place through statewide zoning have really put us in a, put us in a situation to where we, we just- we actually have less flexibility now than we would if we had some standards set in place. I, I get, I get that. I, I would have to take a long time to think about this. I- honestly, if there's anybody out there with a counterpoint, I would love to hear it. I'd, I'd love to, you know, have a point-counterpoint conversation with somebody who just believes that cities should ultimately be the one who, you know, make zoning decisions and-... the way the local politics are working right now is just fine. Like, I would, I would love that side of the equation.

That last part may be hard, may be hard to find.

Yeah. Yeah, I think that's probably the case. But I would say generally in politics, especially at the Texas level, whether you're a Democrat or Republican or you're an Independent, um, or a Libertarian, or whatever you may be, we lack ideas for solving problems right now, just across the board, right? Our politics are heavily driven by populism, by slogans, um, you know, and by demagogue, right? And so at some point, we have to start talking about how we- how do we, how do we solve for the problems that we have? And in Texas right now, our housing cost increase is crazy, and the percentage that people are paying in their income for housing costs compared to what they paid historically is substantially higher. And we're gonna get to the point where these communities and the ability of having the, quote-unquote, "Texas miracle" is we're gonna outprice it, and so we have an opportunity to fix that, and we have an opportunity to develop better, and we have an opportunity to develop without putting so much strain on our, our services. I, I think that's the argument you can make to the public, is they feel it, right? They feel it in... You know, if you're Gunter, Texas, they feel it in their water. Like, sometimes they just don't have enough water in the summer.

Yeah.

Right?

The problem is, so go back to you mentioned the area where I live, right? Over the past 10 years, they've added thousands and thousands of homes, which is fine. Don't have a problem with that. The problem is that all of those homes have to leave their neighborhoods. All those people leave their neighborhoods and go on the same roads-

Mm-hmm

... to get to the highway.

Right.

So now, overnight, it seems, traffic at those, those, like, two choke points is a- is abysmal. It took me 15 minutes to go across the highway a couple of weeks ago, like, to literally just go over the bridge.

Yep.

15 minutes. So when you, when that's sort of your frame of reference, it, uh, it makes sense we shouldn't be building any more homes here, or we should be making these roads much wider, right, so we can fit more people through them. Both of those options are suboptimal from the long-term, for, for the long-term health, fiscally, of that area.

But we're not developing these cities to be sustainable, right? I mean, the, a lot of these communities that are out there... Now, it's, it's- there are some North Texas communities that have built ecosystems, right? Like, full-on based ecosystems. Um, you know, I'd point out that I think Frisco is probably that. Frisco is not built as your, like, standard suburb. Um, if you, if you... And I know you go there almost every weekend, right, for all the fun jazz that you've got to deal with on the sports side. But, you know, Frisco has major employers. They, you know, they still have urban sprawl. Don't get me wrong, but there is... You, you really could just stay in that area specifically and live, work, play, do everything you need to do, right? You can't do that in Gunter, Texas. Like, if you're driving to Gunter-

Well, yeah, Gunter right now.

I- I've just pointed out because they've been in the news, right? Locally, they've been in the news based on water issues and everything else they got going on, and I think they're maybe have an interim city manager. I'm not sure what's going on there, but, but the reality is, is that, you know, they developed 'cause they were forced to develop under certain circumstances. There's a lot of pain that goes on in that process, and we don't always think through the full ecosystem of what happens, and I think people are starting to feel that in these, you know, fast-developing counties. So I, I just... I don't know. I think this is a much bigger topic for the 20 minutes we just spent on it, um, and I think we probably need to revisit as, as time goes. But I do... I, I, I have come around to the solution is more than just local. Like, I've come around to that. Because I think if city managers tried to implement these solutions on their own without any ability, they're gonna get fired by the five people who create a slogan and go after 'em, and send text messages, and post on social media. Like, that's the world we live in. It's very difficult to speak truth from the podium in today's world. Um, so there, there may need to be a different solution other than local, and I can't believe I'm saying that out loud, but...

Well, yeah, I appreciate you indulging my sort of thought process 'cause I haven't settled on anything yet either.

Mm-hmm.

Um, it's just been, uh... Teaching this class last summer forced me to kind of think about some of these things, 'cause the way that I taught that class was it w- it was a lot more open-ended than I was ex- initially expecting to teach it. Like, I, I thought I would kind of go in and say, "Here are the things to know, and this is what the way that it is," and I ended up making it a lot- I tried to make it a lot more of a dialogue about, like, what are the different aspects of these, these topics, and how can we kind of work through them? 'Cause they're all challenging.

Yeah.

But the beauty of it is that they don't o- they don't overlap with the typical, like, left-right spectrum. So there are reasons for people on all sides of the aisle to have different or similar opinions that you might expect. Um, they aren't even the same reasons, right, but you can come to the same conclusions. So-

Which is why you saw Chuck Maroon sitting next to AOC at a party?

Ilhan Omar.

Oh, it was Ilhan Omar?

Yeah.

That's right. Yeah. Okay. Those are very different political views-

Yes, yes

... from those two individuals. So, uh, anyways, let's wrap it up there. I wanna thank everybody for taking the time to listen to us. I know, um, you probably listened for the first half, but on the second half, if you have any comments or anything like that, feel free to reach out to Chad or I. We'd love to hear it. Um, this is kind of an evolving conversation, and we wanna keep it going. So-

Yeah. Chad or you can email us, or Patrick usually posts the, uh, a link to the show on LinkedIn.

Yep.

So you're welcome to comment there, too. We can have a little friendly discussion with all of your colleagues.

Absolutely. So all right, until next time. We'll see you all in a couple of weeks.

See ya!