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Author Topic: North Houston Highway Improvement Project (project partially halted by FHWA)  (Read 96275 times)

TXtoNJ

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I think money drives the decisions on where to live more than anything else. The conventional thinking is you get much more house for the money out in the suburbs than you do in the city center. People move farther and farther out trying to find a better balance of affordability weighed against commute times/costs/difficulty. City centers and suburbs have their other pros and cons. But money is the main thing that matters.

You're 100% correct. The bigger questions are around why greenfield construction leads to cheaper housing options than densifying existing stock. Ultimately, it comes down to public policy.

No, it comes from an economic precept. Land NEVER reduces in value (and as a whole any Real Property doesn't.). Which means in practice that urban land is worth more than rural land because it has an established price that is more. Even when a seller incurs a loss, it is because he overpaid for it initially not because it actually is worth less now.  The cost of raw land will hardly ever be less than the previous sale even when significant remediation or structure removal costs are going to incurred.

The existence of agricultural reserves in other parts of the world belies your point. Economic precepts are always the creature of the policy structures that create them. They are not laws of nature.
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Bobby5280

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Quote from: TXtoNJ
You're 100% correct. The bigger questions are around why greenfield construction leads to cheaper housing options than densifying existing stock. Ultimately, it comes down to public policy.

Prices are (normally) set by supply and demand. The farther you move away from the city center the less demand there is for housing. Now public policy does come into play when suburban towns pick and choose the kinds of residential developments that are allowed to go forward. That's not to mention the kinds of people they want living in those homes. And home builders themselves have very clearly shown their bias toward building great big McMansions as opposed to building more modest sized, less expensive homes. That forces buyers with modest budgets to consider really difficult choices where all the options have serious drawbacks.

Quote from: bwana39
Land NEVER reduces in value (and as a whole any Real Property doesn't.).

The Great Recession of the 2000's says hello.
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TXtoNJ

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Quote from: TXtoNJ
You're 100% correct. The bigger questions are around why greenfield construction leads to cheaper housing options than densifying existing stock. Ultimately, it comes down to public policy.

Prices are (normally) set by supply and demand. The farther you move away from the city center the less demand there is for housing. Now public policy does come into play when suburban towns pick and choose the kinds of residential developments that are allowed to go forward. That's not to mention the kinds of people they want living in those homes. And home builders themselves have very clearly shown their bias toward building great big McMansions as opposed to building more modest sized, less expensive homes. That forces buyers with modest budgets to consider really difficult choices where all the options have serious drawbacks.

Quote from: bwana39
Land NEVER reduces in value (and as a whole any Real Property doesn't.).

The Great Recession of the 2000's says hello.

Agreed - my point is that supply/demand are generally set by public policy, particularly when it comes to land use. Nobody is acquiring land by conquest anymore, hopefully.
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bwana39

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Quote from: TXtoNJ
You're 100% correct. The bigger questions are around why greenfield construction leads to cheaper housing options than densifying existing stock. Ultimately, it comes down to public policy.

Prices are (normally) set by supply and demand. The farther you move away from the city center the less demand there is for housing. Now public policy does come into play when suburban towns pick and choose the kinds of residential developments that are allowed to go forward. That's not to mention the kinds of people they want living in those homes. And home builders themselves have very clearly shown their bias toward building great big McMansions as opposed to building more modest sized, less expensive homes. That forces buyers with modest budgets to consider really difficult choices where all the options have serious drawbacks.

Quote from: bwana39
Land NEVER reduces in value (and as a whole any Real Property doesn't.).

The Great Recession of the 2000's says hello.

While prices were stagnant around 2008. Sales tapered off because sellers did not want to sell.  Yes, the short term did have a downturn in prices, but also had more dramatic loss of inventory.  People were not selling because of the reduced prices.

Outside the great depression, there have not been long term price reductions (or corrections) on properties.  This also said, supply and demand set the sales volume, not the price. Supply and demand in real estate is a function of price. As the price increases supply will increase. As prices decrease (or fail to increase sufficiently) supply will retreat.

Prices are increasing right now due to a perceived supply shortage (new construction is down) but material prices for new construction are as big or bigger reasons for both the shortage of new builds and increase in prices of new builds.

If simple economics were actually in play housing costs would have increased about 600% max in the past 40 years. Instead they have increased around 1000% (10X) . The reason for the outsized inflation is the lack of resets. While there have been flat spots, even on the great recession, the only time prices decreased is when people HAD to sell. Most people, even those who move every few years "just because" stayed put.  Those who had to move for one reason or another did sell. New construction did not totally stop (and prices were just flat there.)

So to agree with your argument, yes there is no supply in the urban locale at the same price point as the rural greenfield construction. Therefore, there is low demand in the urban area at its price point.

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Bobby5280

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Quote from: bwana39
While prices were stagnant around 2008. Sales tapered off because sellers did not want to sell.  Yes, the short term did have a downturn in prices, but also had more dramatic loss of inventory.  People were not selling because of the reduced prices.

The real estate crash of the mid-late 2000's was a lot more messy than that, thanks to all the speculative buying and building that was taking place. The crash wrecked the global economy.

I still remember 2000's era national TV commercials from sketchy lenders trying to sucker people into getting adjustable rate mortgages. I can't remember the name of the company (Countrywide maybe), but there was this one commercial where this housewife berates her husband like he's some kind of idiot for being hesitant about getting on the hook for a home they can't really afford. "We can do this" is the catch phrase she uses when the poor sap finally gives in.
 
There were big residential developments way out on the fringes of major metros like DC that were left vacant. Some developments didn't even finish construction and were eventually bulldozed. Personal bankruptcies soared. Others who couldn't file for bankruptcy simply walked away from their homes and mortgages. Soaring gasoline prices combined with ARM notes hitting their adjustment phases left a bunch of buyers flat broke. What could the bank do with these broke people? Throw them in debtors prison? They had no alternative than just be stuck with the bad notes. Some of this was the fault of banks for having such stupidly low lending standards, even fraudulently low considering how low income minorities were targeted in the final phase of the mezzo-scale Ponzi scheme with a good bit of reverse red-lining.

The US Government is the only thing that put a floor under declining property values in that crash. They came in and bailed out the banks for all their bad loans. Had the government not stepped in many large institutional lenders would have been left insolvent. The lenders deserved to be severely punished for what they did. Unfortunately if they were left to fail it would have shut off business cash flow operations for much of the nation. That would have pushed us into Great Depression 2.0.

Quote from: bwana39
Outside the great depression, there have not been long term price reductions (or corrections) on properties.  This also said, supply and demand set the sales volume, not the price. Supply and demand in real estate is a function of price. As the price increases supply will increase. As prices decrease (or fail to increase sufficiently) supply will retreat.

The real estate market functions just as much on a specific local basis as it does on any kind of national scale. The notion that property, such as homes or land, do not lose value is a MYTH. The Great Recession is an example of runaway excess on a national scale.

Local markets can hit downturns just as severe if not worse. All it takes is a major employer in a modest sized town closing shop for good. Here in Lawton if the Goodyear plant (one of the largest tire factories in the world, if not the largest) were to shut down our local real estate market would be plunged into a severe downturn. The nearby town of Cache would devastated. There isn't a lot of other Goodyear-equivalent jobs in this area for blue-collar workers. Many employees would just leave the area. This happened in a big way to cities in the so-called "rust belt." Lots of small towns in Oklahoma seeing population decline. Young people are leaving and older residents are dying off. Meanwhile the old homes are just left sitting there, often falling into disrepair.

The current real estate market in the US is nothing short of absurd. Median home prices in many cities do not at all reflect average income. Investors both domestic and international are artificially propping up high prices by buying up properties as investment assets. These pricing conditions are NOT sustainable. They're really not going to be sustainable over the long term due to how badly ordinary people are being price squeezed.

Not many young adults are buying up these McMansions out in the suburbs and exhurbs. The buyers are mostly middle aged or retiring people. What are those older buyers of big homes going to do 20 years from now when they (or their estates) want to sell but there are hardly any buyers? The United States has all the conditions in place for our nation's birth rate to crash down much worse than it's already doing. Our long term economy depends a great deal on enough new Americans being born to keep the system running. The American Dream of a wife, nice house and a couple kids costs a shit ton of money. Lots of young adults are being priced out of that convention of living. Some are even happy to opt out of that and stay single and child-less. There are many thousands of square miles worth of "R1" zoned housing that may be really tough to sell a generation from now.
« Last Edit: January 18, 2022, 12:46:12 PM by Bobby5280 »
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J N Winkler

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Re: North Houston Highway Improvement Project (project partially halted by FHWA)
« Reply #680 on: February 07, 2022, 09:43:22 PM »

TxDOT has just advertised a RFP for PS&E development for NHHIP Segment 3B, covering I-69/US 59 from SH 288 to I-45.  Submissions are due on March 4.  This is a relatively short but very busy one-mile segment (one cross-section shows an eventual 21 lanes under the Elgin Street bridge, which currently has 17) and the eventual deliverable for this procurement will be a plans set, with advertising for construction to happen at a later date.
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MaxConcrete

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Re: North Houston Highway Improvement Project (project partially halted by FHWA)
« Reply #681 on: February 07, 2022, 10:20:50 PM »

TxDOT has just advertised a RFP for PS&E development for NHHIP Segment 3B, covering I-69/US 59 from SH 288 to I-45.  Submissions are due on March 4.  This is a relatively short but very busy one-mile segment (one cross-section shows an eventual 21 lanes under the Elgin Street bridge, which currently has 17) and the eventual deliverable for this procurement will be a plans set, with advertising for construction to happen at a later date.
http://ftp.dot.state.tx.us/pub/txdot/ppd/meetings/013122/presentation.pdf

There are some points of interest for the RFP.

First, this segment was originally slated to be design build, as you can see the map on page 12 still shows it as DB1. Since this RFP is for PS&E (plans, schedule and estimates), it is now a conventional design-bid-build job. I don't know the reason for the change, but very high prices on recent design build jobs could be an influence.

Second, since the contract finalization is slated for June 2022, it should take at least a year for the PS&E which suggests the earliest possible bidding would be in the second half of 2023. The job is currently listed at $514 million for bids to be received in July 2023. However, since everything in the project is being delayed, I think July 2023 is optimistic, especially since the FHWA is in no hurry to fully approve any part of this project. https://www.dot.state.tx.us/insdtdot/orgchart/cmd/cserve/let/2023/harris.htm#002713200

Third, this segment has the least amount of right-of-way acquisition in the entire project (see page 16), and most of the properties are already cleared (see photos I posted previously). So this is the segment most likely to actually be built, and it could possibly be the only segment to be built if FHWA decides to cancel everything else due to the planned right-of-way acquisition.
« Last Edit: February 07, 2022, 10:24:20 PM by MaxConcrete »
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J N Winkler

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Re: North Houston Highway Improvement Project (project partially halted by FHWA)
« Reply #682 on: February 08, 2022, 02:30:40 PM »

MaxConcrete--many thanks for sharing your insights!

First, this segment was originally slated to be design build, as you can see the map on page 12 still shows it as DB1. Since this RFP is for PS&E (plans, schedule and estimates), it is now a conventional design-bid-build job. I don't know the reason for the change, but very high prices on recent design build jobs could be an influence.

I wonder if the goal is to cover downside risk by ensuring that TxDOT is not paying a design-builder to stay on the clock for a project that may be cancelled and also has a set of plans on the shelf in case federal stimulus funds become available with little advance notice.

It doesn't seem to me terribly common, but over the years I've run into situations where projects are taken to 100% design only for a finished plans set to be thrown out and replaced (not simply updated) when the project needs to be re-scoped for reasons of cost or environmental compliance.

I'm also curious as to why potential proposers are being asked to execute a nondisclosure agreement to obtain the design documentation package.  This is fairly unusual for design solicitations, and some of the items listed as being included in the package, such as reference information documents, are routinely uploaded to the FTP server (where they are on open public access) for large design-build procurements.
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MaxConcrete

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Re: North Houston Highway Improvement Project (project partially halted by FHWA)
« Reply #683 on: February 08, 2022, 11:05:41 PM »

I wonder if the goal is to cover downside risk by ensuring that TxDOT is not paying a design-builder to stay on the clock for a project that may be cancelled and also has a set of plans on the shelf in case federal stimulus funds become available with little advance notice.

I'm also curious as to why potential proposers are being asked to execute a nondisclosure agreement to obtain the design documentation package.  This is fairly unusual for design solicitations, and some of the items listed as being included in the package, such as reference information documents, are routinely uploaded to the FTP server (where they are on open public access) for large design-build procurements.

I agree, TxDOT wants the plans ready so the project can proceed very quickly if/when FHWA allows it to proceed. The design-build process to request proposals, make the selection and execute the contract takes a very long time - always at least a year. With the plans ready, they can put it out to bid and get the contract underway in 2-3 months.

As for the NDA, it is unusual and I can't think of anything that would be sensitive. It's probably due to the lawsuit in progress, and TxDOT probably wants to ensure the consultant does not hand over any design information to the plaintiff or any of the opposition organizations.

MaxConcrete

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Re: North Houston Highway Improvement Project (project partially halted by FHWA)
« Reply #684 on: February 13, 2022, 06:04:44 PM »

Demolition of the former Mexican consulate at 4507 San Jacinto (southeast corner at IH-69 in midtown) is underway. This is on the section of IH 69 on the far south end of the project between Spur 527 and SH 288. This section is one of the most likely to proceed, even if the rest of the project is canceled.

This is this second largest building to be demolished so far, after the large office building along Interstate 10.

The demolition of this building is a favorable sign for this section. However, the construction job is not shown on TxDOT's 2-year letting schedule, and numerous other properties, mostly residential, still need to be cleared.

http://dallasfreeways.com/dfwfreeways/AARoads/20220212_NHHIP_ROW_1_1600.JPG


In this view, the on-ramp to NB IH-69 is in the foreground
http://dallasfreeways.com/dfwfreeways/AARoads/20220212_NHHIP_ROW_5_1600.JPG


This building is very close to the freeway, and the on-ramp visible on the left side is within 10 feet feet of the building.
http://dallasfreeways.com/dfwfreeways/AARoads/20220212_NHHIP_ROW_6-1600.JPG

MaxConcrete

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The former Mexican consulate is now gone, except for some rubble remaining behind the fence. As of last weekend it was still standing.

triplemultiplex

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The former Mexican consulate is now gone, except for some rubble remaining behind the fence. As of last weekend it was still standing.



I got excited about the graffiti until I looked closer and realized, no, it doesn't say "El Barto".
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J N Winkler

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I kind of liked the "Queso" tag on the top floor--that is topnotch stencil work over what appears to be a photorealistic rendition of a city skyline.  Oh well!  Ephemeral art is ephemeral.
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Plutonic Panda

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So it seems this project is moving forward as planned? At least the downtown section:

Quote
The Texas Department of Transportation (TxDOT) recently announced the issuance of the Record of Decision (ROD) for the North Houston Highway Improvement Project (NHHIP), which signals the completion of the National Environmental Policy Act (NEPA) process for environmental clearance. Specifically, the ROD constitutes approval of the Preferred Alternative for this crucial project to improve safety and mobility along one of the state's most congested roadways, as described in the Final Environmental Impact Statement (EIS) for the project.

https://www.constructionequipmentguide.com/txdot-reaches-decision-on-houston-infrastructure-project/55881
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MaxConcrete

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So it seems this project is moving forward as planned? At least the downtown section:

Quote
The Texas Department of Transportation (TxDOT) recently announced the issuance of the Record of Decision (ROD) for the North Houston Highway Improvement Project (NHHIP), which signals the completion of the National Environmental Policy Act (NEPA) process for environmental clearance. Specifically, the ROD constitutes approval of the Preferred Alternative for this crucial project to improve safety and mobility along one of the state's most congested roadways, as described in the Final Environmental Impact Statement (EIS) for the project.

https://www.constructionequipmentguide.com/txdot-reaches-decision-on-houston-infrastructure-project/55881

That article is about a year out of date, even though it is dated March 22, 2022. It fails to mention the FHWA suspension and the lawsuit.

The answer to your question is: No, nothing is moving forward as planned at this time.

Just today, H-GAC had a public meeting and most of the downtown work has been removed from the 4 year plan. (I can't find the presentation online.)

Remaining in the 4-year plan:
IH 69, Spur 527 to SH 288: $461 million, listed for start in 2023
IH 69, SH 288 to IH 45: $456 million, listed for start in 2025
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

All other work downtown work is postponed to start in 2028 and 2030, and no work north of downtown is scheduled.

Plutonic Panda

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Okay thanks for the response. I thought it was weird seeing that and nothing posted here. Odd theyíd post something so out of date. Usually they are pretty good about being accurate.
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Thegeet

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When can we expect to see a final decision?
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kernals12

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Is there any particular reason they're not putting these added lanes on a second deck? Your first response is probably that it would cost too much, which is what I assumed, but they're doing that in San Antonio.
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Plutonic Panda

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Max, any update on this? Whatís your thoughts this is getting dragged out Iím thinking this isnít looking good.
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MaxConcrete

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Max, any update on this? Whatís your thoughts this is getting dragged out Iím thinking this isnít looking good.

At the March TxDOT Commission meeting, Chairman Bugg spoke about the project status. He mentioned FHWA's suspension letter from April 2021 and highlighted FHWA's statement that it would provide an expeditious decision. A year later TxDOT has apparently not received a status or timeline.

I agree: the longer FHWA keeps the suspension in place, the greater the risk to the project, especially with inflation on the increase. And that may be FHWA's intent, to delay the project indefinitely to allow the cost to increase, and eventually TxDOT will reallocate funding to other projects. In fact, we may see funding reallocated for the 2023 UTP, which is approved in August or September.

As I mentioned on March 23, most work has been pulled out the 4-year plan with delayed work around downtown now listed for 2028 and 2030. Only $2 billion remains in the 4-year plan.

I still expect the approx $1 billion of work on IH-69 south of IH-45 to proceed, but everything else is very uncertain. I'm thinking we may know something more by the end of the year.

Bobby5280

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Quote from: MaxConcrete
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

A billion dollars? For one interchange? Holy shit.

I think I said it before. If the anti-freeway folks want to block the projects in downtown Houston then TX DOT should definitely re-direct that funding elsewhere in the state. It's not like there is a lack of major highway projects to build in other parts of Texas. A whole lot of I-69 outside of Houston remains not built. There's I-27 in West Texas. Certain US Highway corridors in Texas and even some state highway corridors need serious upgrade work. The billions meant for that stuff in downtown Houston will likely be appreciated by motorists elsewhere.

What's funny is many of the anti-freeway folks still expect all those billions of dollars to still be spent in their locales, but just on other crap. Yeah, naw, highway dollars need to be spent on highways. Just not their highways.
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bwana39

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Quote from: MaxConcrete
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

A billion dollars? For one interchange? Holy shit.



The "High 5" in Dallas (US-75 I-635) was over a billion a decade ago...  nearly 2 decades and a shade under $300,000,000. I must have listened to something spoken in hyperbole. 
« Last Edit: April 20, 2022, 05:39:25 PM by bwana39 »
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Quote from: MaxConcrete
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

A billion dollars? For one interchange? Holy shit.

I think I said it before. If the anti-freeway folks want to block the projects in downtown Houston then TX DOT should definitely re-direct that funding elsewhere in the state. It's not like there is a lack of major highway projects to build in other parts of Texas. A whole lot of I-69 outside of Houston remains not built. There's I-27 in West Texas. Certain US Highway corridors in Texas and even some state highway corridors need serious upgrade work. The billions meant for that stuff in downtown Houston will likely be appreciated by motorists elsewhere.

What's funny is many of the anti-freeway folks still expect all those billions of dollars to still be spent in their locales, but just on other crap. Yeah, naw, highway dollars need to be spent on highways. Just not their highways.

If you look at what they're doing, $1 billion isn't that shocking. They are straightening out both freeways and creating an immensely complicated spaghetti junction.
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Plutonic Panda

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Quote from: MaxConcrete
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

A billion dollars? For one interchange? Holy shit.



The "High 5" in Dallas (US-75 I-635) was over a billion a decade ago...

Really? I thought the original high five interchange was about 300 million or so.

Quote repaired.  --J N Winkler
« Last Edit: April 20, 2022, 01:27:05 PM by J N Winkler »
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J N Winkler

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Quote from: MaxConcrete
Interchange at IH 45 and IH 10: $982 million, listed for start in 2026

A billion dollars? For one interchange? Holy shit.

The "High 5" in Dallas (US-75 I-635) was over a billion a decade ago...

I can't speak to the ROW cost since I don't remember TxDOT including that in letting schedules back in 2001, but all or nearly all of the construction for the High Five was done through one contract, CCSJ 2374-01-069, that was let in April 2001 for $261 million.  The plans set ran to over 5000 sheets.

There are more Maltese cross stacks in the state of Texas (a first-level subdivision of a sovereign country with UN representation) than on any continent other than North America, and probably all continents other than North America combined.  Texas also has more than twice as many stacks of this type as California, which is the runner-up among American states with nine.  This interchange form has long been highly affordable in Texas compared to other places--besides the High Five, several were later built in DFW and Houston for roughly $250 million each.  (I-410/US 281 in San Antonio proved fairly expensive at about $400 million.)

This said, I expect the NHHIP as a whole to be a cost bomb simply because so much of it will have to be built under traffic in some of the most congested parts of the Houston metro.  Aside from I-45/I-610 (north), where the present left exits and entrances are to be removed, I don't think it will add to the state's stack count.
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