Paradoxically, perhaps the city’s biggest strength is its sprawl. Unlike most other big cities in America, Houston has no zoning code, so it is quick to respond to demand for housing and office space. Last year authorities in the Houston metropolitan area, with a population of 6.2m, issued permits to build 64,000 homes. The entire state of California, with a population of 39m, issued just 83,000. Houston’s reliance on the car and air-conditioning is environmentally destructive and unattractive to well-off singletons. But for families on moderate incomes, it is a place to live well cheaply.Why "paradoxically"? Is politicized zoning a better way to match supply and demand? Why "sprawl"? Cities that grew up in the late 20th century are auto-oriented. Letting people chose when and where to travel is more efficient than the alternatives? Will there be pockets of congestion? Inevitably as long as the owners of the roads and highways have no incentive to price the roads. "Market failure"? Sounds more like a policy failure.
Alex Anas notes that, "The data on the largest U.S. MSAs show that commute times increase only slightly with city size: the elasticity of the average commute time with respect to the number of workers was about 0.1 in 1990 and 2000." (2012, p. 145.)
This is not from inspired land use and transportation planning throughout urban America. The land markets we have, such as they are, are still able to pull the bacon out of the fire. It's a little like the strong dollar. Consider the competition and the context.