For years, few Houstonians paid much attention to the city’s East End. Home to German immigrants in the early days, the area morphed into a destination for Mexican immigrants, and today it continues to be overwhelmingly Hispanic. Despite being prime real estate—it sits on the edge of downtown—the East End is sparsely populated, and few outsiders visit it except to grab a bite at Ninfa’s, the legendary Mexican restaurant where some Houstonians are convinced fajitas were invented.

The East End has a broad mix of housing, from shotgun shacks that rent for $300 a month to new townhomes worth upward of $300,000. Still, huge swaths of its 16 square miles are empty, with nearly a third of the land considered industrial and a quarter of it entirely undeveloped. As a result, there’s wide open prairie just a short distance from the city’s skyscrapers and stadiums.

That’s about to change. Next year, a new four-mile light rail line will open and run through the heart of the community. More than $7 million has been spent on sidewalks and other pedestrian improvements. A newly opened pedestrian “esplanade” featuring cafe seating and dozens of stalls for vendors just opened in the center of Navigation Boulevard, the community’s Main Street. Parks and trails are set for a makeover. A new cultural center is in the works. Public art is starting to dot the area. Officials are even planning for the possibility of a streetcar to link the northern reaches of the East End to the rest of the transit network.

“At my age, I’m asking God to please leave me just a few more years because I’m happy with what I’m witnessing,” says Jessica Castillo-Hulsey, 62, a longtime local civic leader. “Finally, I’m seeing what I want to see as a resident and a homeowner.”

The work is largely a result of the Greater East End Management District, an entity funded by local businesses that’s getting accolades citywide for finally making things happen in a place where there’s been a long history of redevelopment talk with little to show for it. But the progress happening today also represents a new approach to planning Houston’s future, an approach that values urban compactness and density as a viable alternative to the near-ubiquitous reality of car-dependent suburban sprawl.

While oil made Houston boom, a more complicated set of factors made it sprawl. State annexation laws allowed the city to aggressively absorb surrounding areas, earning it the nickname of “the blob that ate East Texas.” A mechanism exists that allows developers to easily create quasi-governmental authorities to finance far-reaching utility extensions. Meanwhile, it’s always been cheaper for developers to build horizontally than vertically, and because Houston faces few physical impediments such as rivers, lakes or mountains—save for the Gulf of Mexico 50 miles to the southeast—there isn’t any physical reason stopping them. “That’s one of the reasons you don’t have a massive number of high-rises,” says Ric Campo, CEO of the national real estate firm Camden Property Trust, based in Houston. “It’s all about land availability and cost, and it costs a whole lot more to go up than out.”

In addition to being the country’s most sprawling city, Houston also has another distinction that has long fascinated planners in the rest of the country: It’s the largest American city that lacks zoning. That doesn’t make development here a free-for-all the way some outsiders assume. Self-regulating deed restrictions created by developers maintain some neighborhoods’ character. But the situation does create unusual development patterns. “You’ll see vacant lots adjacent to transit, and mixed-use development 20 miles out,” says Jeff Taebel, director of community and environmental planning at the Houston-Galveston Area Council, the regional planning agency. That’s because it’s often easier for a single developer to plan a site he wholly owns than enact changes based on the visions of multiple property owners.

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Essentially the city relies on the market to dictate development patterns, and these patterns are sometimes at odds with what conventional planning might dictate. Even so, advocates, developers and city leaders who don’t always see eye to eye generally believe the arrangement has worked in Houston’s favor over the years, allowing developers to respond quickly to market conditions and keep housing costs low. Regardless of individual Houstonians’ views on zoning, that part of the system is probably not changing. Four attempts at altering it have all failed.

What is changing is Houstonians’ attitude toward urban life. Historically, as Rice University’s Kinder Institute for Urban Research succinctly puts it, Houston has been viewed as “the most sprawling, least dense, most automobile-dependent major city in America.” And for many years, Houstonians seemed to be perfectly content with that. But there’s evidence that’s no longer the case. The institute’s annual survey of Houston-area residents last year found that half the residents of Harris County, of which Houston is part, would prefer to live “in an area with a mix of development, including homes, shops and restaurants” as opposed to a “single-family residential area.” Even if you look at the farthest parts of the metro region—the nine counties surrounding Harris County—more than 40 percent of residents prefer the mixed-use option. The results, which are also reflected in recent development patterns, have city leaders, developers and advocates for density buzzing. “It’s not a flash-in-the-pan trend,” Campo says.

The trend seems to be driven by three factors: young adults who are less attracted to suburbs, rising transportation costs, and a concerted effort by Mayor Annise Parker and her predecessor Bill White to promote amenities in the city and especially its core. Houston, of course, is by no means the only city experiencing a renewed interest in urban living. But it may be the most unlikely, and the trend is especially notable given the poor reputation Houston has historically had in the urban planning field. Now, city leaders are trying to respond to market demands they didn’t encounter just a short time ago. As the Kinder study notes, “the challenge today is not in finding residents who want to live in more compact, urbanized communities, but in building places across the region that can accommodate them.”

Houston’s old style of growth—annex the suburbs to get tax revenue that supports the core—has worked rather well, so long as highways could be built to accommodate a growing periphery. But now, Mayor Parker says it’s time for something different. “At some point, it’s not enough to keep grabbing the suburbs and roping them in,” she says. “You’ve got to make the system as a whole function, and you do things to bring people back to the inner core.”

Houston competes for residents with the suburbs and exurbs, which over the last decade have handily defeated it at the growth game. While the greater Houston region saw its population increase 26 percent between 2000 and 2010 to 5.9 million, the city itself grew by only 7.4 percent, and some observers note that the true figure may be even lower, since that growth rate includes large numbers of Louisianans displaced by Hurricane Katrina. That’s still extremely strong growth for a major city. But Houston leaders face a situation in which sprawl and densification are happening simultaneously; their challenge is to capture for the center a greater portion of the growth that’s happening regionwide.

City of Houston Population: 1950-2012

One way to do that, some say, is to do a better job of playing up the city’s strengths. Many suburbs and even exurbs of Houston are advertising an urban experience, even though they’re far away from Houston and its core. Sugar Land, 20 miles southwest of downtown, and The Woodlands, 30 miles north of downtown, are among the fastest growing places in the country, buoyed in part by the so-called “town centers” they offer. Officials in those places have explicitly pitched mixed-use, walkable offerings, with The Woodlands advertising a downtown with “shopping, dining, commerce, urban living and entertainment,” and Sugar Land developers touting a city center that has “an inviting mix of Main Street activity.”

While there is plenty of activity happening within the city, says Taebel, the regional planning director, in some ways, “when we talk about walkable places, some of the best examples are not in the urban core.” Houston has long embraced development of single-family homes, for fear of becoming uncompetitive with the suburbs. But others believe that perhaps Houston should instead try to focus on its strong suits: compactness and social contact. “[The city’s] competitive advantage,” Taebel says, “is on the urban side.”

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But the problem is that even parts of Houston well within its core, like the East End, feel like the suburbs to an outsider, best illustrated by the fact that it’s almost impossible to navigate these areas without a car. A growing cadre of voices is calling on city leaders to do more to transform Houston into a place that more closely resembles a “real” city, not a place ringed by manufactured “town centers” and “Main Streets.” “The only way to stop sprawl is to compete,” says David Crossley, president of Houston Tomorrow, which advocates for density and transit.

Unfortunately, that’s easier said than done in Houston, where market conditions have sometimes undermined that goal. While there’s plenty of inexpensive housing in Houston—nearly 40 percent of units cost less than $130,000—the majority of high-quality houses at that price point are outside the central portion of the city known as the Inner Loop. Mayor Parker and others acknowledge that they need a better mix of housing types at varying prices in the city core to make their plans a reality.

They argue that offering more amenities within the city isn’t just a real estate issue, it’s an economic one. Case in point: The Houston Chronicle reported that, at a conference last year, an official with local software company Datacert announced that the firm was struggling to recruit from places like Stanford and Princeton, largely because prospective employees were not happy with the idea of calling Houston home. The company’s solution was to allow telecommuting, ensuring that new recruits wouldn’t have to live anywhere near Houston (many of them chose to live in Portland, Ore.). “Houston will not make it if it’s perceived by people outside of Houston to not only be flat and hot for much of the year, but also ugly and dangerously polluted,” says Stephen Klineberg, co-director of Rice’s Kinder Institute. “The business community knows that, and there’s a business case for planting trees, cleaning the air and downtown revitalization.” So not only is Houston competing against the suburbs for a tax base, but it’s also in competition against big cities nationwide for a workforce. City leaders believe an urban push can help them win on both fronts.

As a result, in recent years, city leaders have proudly rolled out a seemingly endless list of programs and policies they say will make Houston denser and more “livable” in an effort to capitalize on the growing fascination with urban living. Planning officials here tend to avoid terms like “smart growth” and “New Urbanism”—long in vogue in the planning community but often saddled with political baggage. Yet those terms convey the spirit of what Houston civic leadership is trying to do. While city officials also don’t like offering up suggestions about which cities they think Houston should emulate—no doubt aware of their residents’ independent streak—advocates have an eye toward Denver, a car-oriented city which has nevertheless built walkable communities around transit stops. “This is fundamental municipal development, but it’s never happened in Houston,” says Bobby Heugel, a popular restaurateur operating businesses in some of the most rapidly changing parts of the city.

The city is building new bike trails and has launched a 22-station bike-share program. Voters last year approved a $100 million bond to launch a project called Bayou Greenways that will develop 150 miles of trails along Houston’s long-neglected waterways. There’s been a flurry of activity downtown which, since 2000, has welcomed three new professional sports stadiums, an 11-acre park called Discovery Green, a convention center expansion and a major performing arts venue.

To encourage living in the core, an incentive program offers developers up to $15,000 per unit for building multifamily housing in and around downtown. That’s a departure from the city’s historic reluctance to offer money to developers who already enjoy lax regulations. More controversially, the city is allowing developers to build at the same density level citywide that they previously only enjoyed within the Loop, the 96 square miles of the city’s core within the boundaries of Interstate 610, generally considered the most urban part of the city. “I think we’re begging to move toward a critical mass of the right mix of activities, juxtaposed with each other to really create the urban place that people want,” says Bob Eury, who leads the management district that oversees downtown. “We’re not there yet, but clearly, you can feel that we’re moving there.”

But the biggest challenge facing Houston’s quest to go urban is the state of its transportation system, which could be critical not just to recruit young residents but also to manage future congestion. By 2035, if present trends continue, Houstonians are forecast to be spending 145 percent more time in their cars than they do today. The problem, outlined in a recent regional planning document, is that by almost every conceivable metric, the area currently lacks the density needed for successful transit-oriented development. “The single most powerful constructor of cities is transportation systems, and if you depend on cars, you cannot have density,” Klineberg explains. “So the great Catch-22 for Houston is we want density, but you can’t have density with a car [and] there’s no density to support light rail. You build light rail on the faith that if you build it, they will come.”

After 20 years of political battles, Houston’s first light rail system broke ground in 2001 and began operating in 2004. Weekday ridership is slight, at around 38,000 passengers per day, but supporters say the 7.5-mile line connecting downtown to the Medical Center carries more passengers on a per-mile basis than almost any American light rail system today.

Over the next year and a half, three new light rail lines (detailed in the map below) will open, including the $756 million North Line slated to launch before Christmas and two others, the East End Line and the Southeast Line, scheduled for 2014. Groups such as Houston Tomorrow say the city is on the cusp of a “second transit era,” a reference to the streetcars that ran throughout the city during its nascent days. But beyond 2014, light rail’s future in Houston is uncertain.

Houston's New Light Rail Lines

Click on the colored lines to see the distance and scheduled opening date for each light rail line.

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In an unusual legal arrangement, 25 percent of the tax revenue collected by Metro, the regional transit agency, goes to Harris County and many of its cities, largely to be spent on road projects. The long-standing agreement is something of a political compromise to help appease the competing interests of the region’s urban and suburban voters. As a result, Metro has actually spent more money on roads than it has on transit infrastructure.

Last year, voters had the option to scrap the revenue-sharing plan—which might have meant an extra $2.5 billion for Metro transit work through 2025. Instead, they passed a referendum that keeps the arrangement in place. Though it potentially increases Metro’s portion of the revenue share, it also bars Metro from spending new tax revenue it captures on rail. The deal forces Metro to shift its focus back toward buses, which lost ridership while Metro pursued light rail. Advocates say the deal—endorsed by Parker and Metro itself—threatens the future of light rail in Houston at a time when two planned lines don’t have a funding mechanism. For her part, Parker says she was only acknowledging the political reality that most voters in Metro’s service area don’t use light rail. Some observers say even if voters had repealed revenue sharing, state lawmakers might have overruled them.

Meanwhile, Republican Congressman John Culberson, who represents western Houston and its suburbs, is fighting to include language in federal appropriations bills that would block federal funding for the University Line, the only part of the light rail system that would connect the east and west parts of the city. Either way, there’s no funding plan in place for another projected light rail line through Houston’s Uptown, an area where “off-duty police officers feebly try to direct jams that reach Calcutta levels,” according to the Houston Chronicle. A bus rapid transit scheme organized by the local management district is instead in the works.

On a broader scale, it’s unclear whether Houston will ever support the long-distance commuter rail system that is probably critical to moving the 3.5 million new people expected to come to the region by 2035. A commuter rail network would be expensive, exceeding $3 billion, and a plan to run it along existing freight lines may be difficult. Metro’s park-and-ride bus system that sends commuters from the suburbs to downtown gets high marks from many, but the system doesn’t work well for commuters trying to reach any of the area’s seven other major employment centers. “If you want to continue to grow, and make it attractive for people who want that [transit] option, then you need to have rail,” says former Mayor Bill White.

Despite their push to redesign Houston, city leaders find themselves taking criticism from residents who have two vastly different visions for their community. On one side, more strident urbanists say the current plans are not nearly bold enough; defenders of the current arrangement say the city should avoid the temptation to change at all.

The most vocal urbanists complain that Parker has failed to articulate an overarching vision of what the next version of Houston will look like. Despite big initiatives coming out of city hall, they say that simple things—like properly designed and maintained sidewalks—are still not being implemented effectively. “We have no clear standards for the kind of character we want in the urban environment,” says Peter Brown, a former city council member who lost the mayoral race to Parker and has become one of the leading voices for pedestrian improvements in the city.

Others, best represented by geographer Joel Kotkin, say Houston should embrace its historical style of development. He paints Houston’s sprawl in a more flattering light—opting instead to call it “dispersed urbanity”—noting that the opportunity for good housing at a cheap price is part of why Houston is thriving. He cites data from the National Association of Realtors indicating that nationally, nearly four of five buyers still want to buy a single-family home. Kotkin argues that if Houston wants to remain attractive, it should embrace its unique ability among the country’s largest cities to continue offering those homes at an extremely low price, a rarity among the country’s biggest cities. While he applauds quality-of-life improvements, he says Houston urbanists and planners should avoid a heavy-handed approach to promoting density and should instead allow the market to continue to dictate development patterns that have made Houston a destination for those seeking affordable middle-class housing.

Complicating things are Houston’s previous attempts at density, which haven’t gone swimmingly. The city increased density limits inside the Loop in 1999. But critics say some neighborhoods, like those along the Washington Avenue corridor west of downtown, are a case study on density run amok. Lots that once had one home now have three, and the area is prone to congestion and flooding. The roadways there are too narrow for emergency vehicles. Or take the case of the Ashby High-Rise, a 21-story apartment building that drew outcry for its position in the middle of an upscale neighborhood full of single-family homes. Planning officials say their newer density ordinance includes protections for neighborhoods, and a new high-rise ordinance steers those buildings toward main thoroughfares. Still, Houston’s track record so far shows that it has growing pains whenever areas get dense.

The city also has an unpleasant history in general with gentrification that critics say has been reignited by efforts at increasing density. Freedmen’s Town, an African-American neighborhood within the city’s historic Fourth Ward near downtown, has essentially has been absorbed by trendy Midtown, largely because the land became expensive and poor black residents didn’t own their property. Just a few dozen of the more than 500 historic structures that existed as recently as 1985 remain today. Basically, the neighborhood no longer exists. Opponents of gentrification warn that a similar process could soon begin in the adjoining Third Ward, which also sits next to downtown. “As gentrification occurs, can it be managed so it doesn’t displace the poor, or will we end up [like] European cities, where all the poor are pushed to the suburbs?” Klineberg of the Kinder Institute asks. “That’s the great question.”

Back in the East End, officials with the Greater East End Management District say even their residents are worried about gentrification. The say they’ve heard residents complain when their sidewalks are repaired, saying the work will eventually increase their rent or property taxes. Mayor Parker, presented with the criticism that some of the changes in Houston could price people out of their homes, does not seem overly concerned. “We’re already the most affordable big city in America,” she says.

It’s unclear what the next version of Houston will look like, but given the millions expected to move here in the next 20 years, one thing’s for certain: The city will look different. “A lot of people may be viewing Houston through more of a backward lens, saying, ‘This sort of stuff has never worked here; we don’t want to put all our eggs in the basket of something that’s new,’” explains Taebel, the regional planner. Still, he says, “sometimes you need a jolt,” and he thinks it may be coming, if it’s not already here. “I’ve been here for 30 years, and the stuff we’re talking about today would have been unthinkable then. The fact that we’re even debating this stuff is huge.”

Houston spans nearly 600 square miles, one of the largest areas of any U.S. city. The following illustration shows total land area for the nation's 10 most populous cities: