This post was written for an essay contest on the question “What would Hayek say today?”
Hayek and other Austrian economists demonstrated that government ownership of the means of production is a sure route to poverty, but today, central planning remains the norm in one crucial area: cities. In the United States, the Supreme Court determined that cities could designate sections of city land for specific types of development in the landmark case Euclid v. Ambler. Since then, land use regulation has expanded to include heights limits, parking requirements, and design guidelines across the world’s great cities. Urban planners and politicians determine the rules for the location and types of development permitted within their jurisdictions, and ultimately have veto power over major projects designed in the world’s great cities. If Hayek were alive today, he would focus on applying his work on the knowledge problem to city planning.
In the United States, progressive city planners began promoting restrictions on building height and density with the objectives of promoting light and air in the early twentieth century. At the time, these objectives were considered important for public health. Property owners and policymakers soon realized that zoning tools could also be used to protect home values by preventing the construction of low-cost, high-density housing.
Today, property owners support a wide range of policies designed to limit housing supply and increase the value of their assets. These policies include minimum lot sizes, density limits, and parking requirements. While a large economics literature describes the regressive effects of zoning, these policies remain nearly ubiquitous in the Western world. They owe their persistence to powerful public choice incentives that lead policymakers to favor their current constituents over the unrepresented people prevented from moving into their municipality or neighborhood by restrictive land use regulations (Schleicher, 2012).
While the institutional landscape favors the continuance of restrictive zoning, land use regulations are not well-suited to shaping city design. Urban development is an information gathering process based on dispersed and tacit knowledge of entrepreneurs, like other market processes. As Hayek describes in “The Use of Knowledge in Society,” even if city planners have the best of intentions, they are incapable of accessing the information that would guide land and building resources toward their best uses in a free market (1945).
Unlike private sector developers, city planners do not experience profit and loss, leaving them without the single tool that can best direct the allocation of resources within a city over time. Israel Kirzner clearly explains the centrality of profit and loss in the market process:
The only difference between one market day and the following one was that plans made for trading during the latter day are based on estimates of prices learned through the market experience of the previous day. Agitation in the market was caused by rapid changes in plans made by the various participants as market experience steadily spread more information and repeatedly indicated fresh opportunities for profitable trade. When one superimposes upon this already complicated picture a particular pattern of unforeseen changes in initial commodity-endowments and in individual tastes, things become far more complex (1963).
With access to this powerful learning tool of profit and loss, property owners, developers, and consumers will improve the allocation of a city’s land over time with each day providing opportunities to buy, sell, and redevelop. This process leads to a city that relentlessly improves meeting consumers demands as entrepreneurs see individual opportunities to profit. Because this tool is available only to those with access to the profit and loss mechanism, city planners will never be able to equal the urban development success that a free market can. The absence of profit and loss feedback and the disperse nature of knowledge that leads to profit opportunities are the reasons that efficient resource allocation is impossible under central planning, as Hayek detailed in “Socialist Calculation: The Competitive Solution” (1940).
Urban theorist Jane Jacobs identified the same problem in city planning that Hayek revealed in economic planning. In her 1961 classic The Death and Life of Great American Cities, Jacobs even used language similar to Hayek’s, explaining the “the knowledge of the particular circumstances of time and place” (Hayek, 1945) as “locality knowledge” (Jacobs, 1961). Neighborhood residents have insights into the best use of the land in the few blocks that they traverse daily, but planners cannot access this disperse information because even the most well-intentioned planners are not omniscient.
Jacobs’ ideas have profoundly influenced urban planners, particularly within the Smart Growth and New Urbanist movements. These planners have absorbed Jacobs’ criticism of traditional zoning regulations that limit urban density and prevent mixed use neighborhoods. Traditional zoning leads to cities in which walkable development patterns are illegal and to the collapse of the emergent “sidewalk ballet” that she observed in New York’s Greenwich Village (Jacobs, 1961).
However, in those branches of urban planning where Jacobs’ observations on the benefits of dense, mixed-use neighborhoods have permeated, planners typically fail to realize that she espoused the potential for emergent order within cities when homebuilders, shopkeepers and residents are free to act in their own self interests. Rather, today’s progressive planners seek to mandate the type of development that Jacobs herself preferred as a matter of taste through regulatory tools such as urban growth boundaries, parking maximums, and public transit spending.
Smart Growth and New Urbanist city planners typically attempt to correct past government failures with new government regulations and programs. They fail to recognize that the key to allowing emergent order in cities is deregulation, permitting landowners to build the type of development that consumers demand (Washington, 2010). In Law, Legislation and Liberty Volume 1, Hayek demonstrates the importance of allowing individuals to rely on their own knowledge for decision making:
A condition of liberty in which all are allowed to use their knowledge for their purposes, restrained only by rules of just conduct of universal application, is likely to produce the best conditions for achieving their aims; and such a system is likely to be achieved and maintained only if all authority, including that of the majority of the people, is limited in the exercise of coercive power by general principles to which the community has committed itself (1978).
By attempting to engineer cities to fit their vision, planners of all persuasions violate this principle of liberty and, in doing so, prevent individuals from seizing mutually beneficial exchange opportunities to improve city design.
If Hayek were alive today, he would draw a parallel between markets and cities as dynamic processes, demonstrating the errors that city planners make when they attempt to build Jacobs’ emergent urban vision through regulation and fiat. Mises, Hayek, and Kirzner convincingly show that economies are not mechanistic and economic growth cannot be conducted from the top down. Likewise, cities are not machines; they are dynamic marketplaces that provide the spatial component of entrepreneurial activity (Ikeda, 2012). Attempting to direct urban growth from the top down limits a city’s ability to facilitate exchange and learning through the market process.
Today, federal government issues such as monetary policy, fiscal adjustments, and national economic development receive more attention from free market scholars than land-use regulation. However, it’s hard to overstate the impact that land use regulations have on individuals’ lives and on productivity growth. Researchers at the Santa Fe Institute have established that urban scale is related both to economic growth and to efficient use of public and private infrastructure (Bettencourt and West, 2010). Similarly, Harvard economist Edward Glaeser’s extensive body of research shows that urban density is vital to economic development and that without freedom to build, housing costs rise prohibiting opportunities for productivity growth (2012).
In a free market, cities will continuously move toward an equilibrium in which they are best suited to meet the needs of their residents, but land use regulations put a stop to this process. Because cities provide the spatial component of entrepreneurial learning, preventing these marketplaces from improving over time comes with a high toll in economic growth. Like markets, successful cities grow, but they cannot be made. Today Hayek would be writing about the importance of the urban development process that provides the space where entrepreneurship takes place.
Last week DC Streetsblog reported on a new survey from Kaiser Permanente. The survey covers Americans’ attitudes toward walking and their self-reported walking habits. While a substantial majority of people believe that walking has health benefits ranging from weight management to alleviating depression, the survey found that most people walk less than the 150 minutes per week that the Centers for Disease Control and Prevention recommends. The Streetsblog coverage attributes a lack of walkable infrastructure to low walking rates, although it’s not clear to me that the survey explicitly supports this conclusion. However, past research demonstrates that people who live in neighborhoods where they are able to complete errands on foot do, unsurprisingly, do walk more than those who don’t.
While people may not cite walkabilty as an important consideration in choosing a house, choosing a home involves weighing many factors, from size, price, distance to work and other amenities, aesthetic, and countless others factors. Consumers rely on tacit knowledge to weigh many of these factors because they can’t consciously enumerate all of them in making a decision of where to live.
For this reason, revealed preference theory is a more reliable tool than survey data for observing how consumers value one attribute of a complex good like housing. Building on a past project, my colleague Eli Dourado and I are studying whether or not consumers do pay a premium for greater neighborhood walkability. Using a fixed-effects model, across all metropolitan and micropolitan statistical areas in the United States, our preliminary results indicate that, on average, Americans are willing to pay a premium of about $850 for a house with one additional point in Walk Score. Because of the many restrictions that limit walkable development, consumers have to pay this premium for the scarce supply of houses in walkable neighborhoods.
This finding also indicates that, in a world with fewer regulations limiting the supply of walkable development, the free market would provide a greater supply of walkable neighborhoods because developers have opportunities to profit from doing so that are currently prevented by regulations. In a freer market, more people would have the opportunity to live in neighborhoods where completing daily errands on foot is feasible. These findings don’t tell us what, if any, public health improvements would be seen from more people living in walkable neighborhoods, but they give us a clearer picture of the value people place on walkability than survey data does.
“Market suburbanists” often cite survey data finding that most people prefer detached, single family homes to living in multifamily housing. They also often say that revealed preferences back up these surveys because most Americans live in single family homes. Indeed, this is true, even in the largest cities. However, looking at the housing choices that Americans make while ignoring both regulations that limit the potential choice set and without considering the prices consumers pay is misleading, like saying Americans prefer Fords to BMWs because there are more of them on the road.
An understanding of consumers’ complex decision process in selecting a home cannot be accurately gleaned from either survey or Census data; rather, this information should be observed based on the price that emerges between buyers and sellers in the market. While, all else equal, most people might prefer a large detached house with a big yard, in weighing the many factors like proximity to amenities, price, and house size, we find that people are willing to pay a premium for walkability.
While I’m not prepared to make any claims about health benefits from permitting more walkability, it is clear that people are willing to pay a premium to live in more walkable neighborhoods and that in a freer market, more walkable development would be provided.
In her new book Perverse Cities: Hidden Subsidies, Wonky Policy, and Urban Sprawl, Pamela Blais explores the impact of flat-rate fees for development charges and network services like sewer, water, and cable. She explains in detail how these little-discussed policies play an important role in shaping development and redevelopment and how the current funding of these network goods incentivizes large lot, greenfield development over infill development on smaller lots.
Blais focuses her analysis on Canada and the United States. Development charges provide an easy inroad into her critique of average cost over marginal cost pricing for infrastructure. Many North American municipalities charge developers a flat-rate fee for each lot they develop. They often set this fee at the rate for lots of varying sizes, even though larger lots require more asphalt, sewer and water pipes, and cable to service them. While the cost differences may be small between one 25-foot versus one 60-foot lot, infrastructure for a new suburb of 100 houses will cost significantly more if the houses have 60-feet of frontage versus 25, but because these costs aren’t reflected in prices, residents don’t take them into account. Because the same development fee will be capitalized into each house, those who live on smaller lots cross-subsidize the services like road maintenance, garbage collection, and snow clearance of those who live on larger lots when these services are provided by local governments.
Blais provides detailed accounts of how these fees shape development patterns and that the resulting sprawling development is both environmentally detrimental and expensive for cities to maintain. She points to several network services that fit a model similar to development charges: water and sewer, electricity, gas, telephone, cable television, internet connectivity, and postal service. While she cites extensive empirical evidence that the cost of delivering these services is inversely related to population density, local and federal governments tend to charge flat rate fees for these services per lot, creating a situation in those who live on small lots provide substantial subsidies to those living on larger lots.
Blais advocates a model in which user fees are set as closely as possible to the actual costs that each household imposes on its municipality, which would significantly improve incentives compared to the current system. She doesn’t discuss subsidies that run the other way, though, benefiting residents in center cities at the expense of those on the fringe. For example, residents in center cities may live near a subway station and use it frequently. Train systems are typically subsidized by the taxes of suburban residents of the same city who may rarely use the train system, and capital costs of transit systems are often paid for by federal taxpayers who receive little if any benefit from transit systems. Blais sees setting user fees close to actual costs as a tool to encourage more compact development, so she selects only examples in which city-dwellers cross-subsidize those in the suburbs rather than the other way around.
While I think Blais provides a clear and detailed account of the side effects from funding network services with fees set at average costs, my primary critique of her work centers on her use of the word “efficiency.” First, she uses the word in the sense that economists call pricing “efficient” when the price of a good is equal to the marginal cost to suppliers of providing that unit. But she also uses “efficient” to describe dense development. While denser development is more efficient in the sense that it uses less land, Blais doesn’t make clear that sprawling development can be efficient in the economic sense if people are willing to pay the full costs of this type of development. Blais seems to draw much of her support for setting user fees equal to marginal cost from a 2002 paper by economist Donald Dewees. Both Dewees and Blais come from the perspective of increasing allocative efficiency within the model of municipalities or regulated monopolies providing the same services that they do today. However, this static view doesn’t factor in that private sector firms are driven to relentlessly search for ways to reduce their production costs and improve the quality of the services that they offer over time through innovation. Not so for monopolists protected from competition, which is why many people celebrate the arrival of private services like cable killers, VoIP phone providers, and ISPs that don’t bundle their services with cable that will save them from having to deal with the protected monopolists that will never match the prices of competitive markets. While marginal cost pricing would introduce efficiencies over the current system, greater gains are possible by allowing the market to provide these services rather than attempting to set prices as the market would. While competitive provision of water supply and wastewater treatment are unlikely in the near term, existing Business Improvement Districts provide a model for voluntary public space maintenance and improvements that improve upon that provided by municipal services.
While I found a few pieces of Blais’ analysis frustrating, I learned a lot from her book and highly endorse her approach to looking at prices, rather than regulation as the key to improving development outcomes. She succeeds in bringing attention to an under-discussed and important issue in the tangle of policies that shape urban development. Setting municipal service fees at marginal cost would be a significant step toward market-based development.
Next week the Cambridge City Council will consider a petition to require new or newly renovated buildings of 25,000 square feet or more to be net-zero emissions. Under the rule, any energy that buildings use beyond what they produce must be sourced from approved, renewable energy sources. While intended to reduce greenhouse gas emissions, the rule would have some easy to foresee side effects:
Jeff Roberts, a land use and zoning project planner for the city, said the cost of developing what is being called “net zero” buildings could be passed on to tenants, and could drive away new development.
“There’s always the possibility that this would create a shift–that the cost might cause development that would otherwise occur in Cambridge to occur in other communities that don’t have similar requirements, such as Boston or Somerville or suburban areas,” Roberts said.
With this rule, Cambridge would follow in the path of other cities that have attempted to reduce greenhouse gas emissions at the local level. Santa Monica has been one of the municipalities leading the way on attempts to reduce greenhouse gas emissions since 1994. The city has adopted its own standards for greenhouse gas reduction, but has made little progress toward its defined targets, today using 35% more electricity per household than the average California household does. While the environmental activists that support these local-level rules surely realize that greenhouse gases do not recognize political jurisdictions, local greenhouse gas emissions reductions in cities like Santa Monica and Cambridge miss the real opportunities to reduce reliance on fossil fuels.
It’s unsurprising that very left-leaning cities have pioneered these types of rules, but in doing so, these cities are missing the real opportunities they have to reduce emissions. Santa Monica is one of the most walkable places in the Los Angeles area, offering opportunities for those in other LA neighborhoods to switch to a lower-greenhouse gas lifestyle by moving there. However, density restrictions and a complex entitlement process reduce building supply there. While the city is seeking to reduce carbon dioxide emissions among its own residents, it’s simultaneously preventing the development of new, higher-density development that could reduce more Los Angeles residents’ demand for driving.
Similarly, Cambridge has a Walk Score of 82, along with better transit access than many Boston suburbs. The proposed “net zero” rule would take away opportunities for people to live in Cambridge, likely pushing them to suburbs where they will probably lead higher carbon emission lifestyles than they would have in Cambridge. While local policymakers and activists may want to feel like they are doing something to reduce greenhouse gas emissions, they should first look at the existing regulations that promote greenhouse gas emissions rather than implementing a new regulations with its own unintended consequences.
The effect of Santa Monica’s infamous rent control policy has diminished because the rules don’t apply to all new buildings, but a plethora of regulations reduce the city’s supply of dense, rentable housing. In Cambridge, minimum parking requirements act as an obstacle to new residential and retail growth, pushing this growth to the suburbs instead. If policymakers and activists in the cities that are charting new territory on local greenhouse gas emissions care about carbon emissions more than the political credibility of being seen as doing something, they should seek deregulation in their cities rather than adding new regulations that will further restrict growth in dense, walkable areas. At the very least they should not pursue rules that will drive more carbon emissions to neighboring municipalities.
The destruction of inner cities at the hands of bureaucrats wielding eminent domain has been well documented by urban theorists from Jane Jacobs to Richard Epstein. As Ilya Somin points out, eminent domain has played an important role in destroying property in Detroit, contributing to its population losses. Dating back to the implementation of Title 1 of the Housing Act of 1949, urban policymakers began using federal funds for slum clearance. Unsurprisingly, destruction of housing units correlated with the population decline in Detroit and other cities.
While one would think that the horrors of slum clearance under Title 1 have been adequately demonstrated to prevent planners from pursuing neighborhood destruction as an economic growth strategy, cities across the country continue using eminent domain to clear “blighted” neighborhoods. Last year Denver declared an area of its Five Points neighborhood, including 246 homes, blighted, meaning that now developers interested in building in the area can request the city to use eminent domain to grant them the properties that they want. While the Atlantic Yards project received extensive press coverage, policymakers often employ eminent domain more quietly on behalf of stadium builders, benefiting sports fans at a dear cost to neighborhood residents and business owners. Like urban renewal projects dating back to the 1950s, Forest City Ratner has failed to deliver the promised housing that was part of the Atlantic Yards agreement when the city agreed to condemn the neighborhood.
Perhaps Robert Caro provides the most poignant description of the horrors of eminent domain in The Power Broker, explaining the losses of neighborhood cohesion when the tool is used to demolish private housing to be replaced by public housing or in some cases vacant lots when promised public works are not delivered. One would think that the well-documented failures of urban renewal would lead policymakers to be very cautious when employing eminent domain for corporatism, or “public benefit.” However, even in the Kelo case in which the Supreme Court established that cities can legally use eminent domain in an attempt to provide public benefit through economic development, the Pfizer project for which homes were condemned fell through. Not only did New London policymakers fail to incite economic development by demolishing houses, they shrunk their tax base and created the blight of vacant lots where there was no blight before.
Today, policymakers in California are leading the charge to use eminent domain in a creative new way: using its power to confiscate underwater mortgages from banks, write them down to current market values, and refinance homeowners’ loans with more favorable terms. While the policy has yet to be implemented, unintended consequences are easy to foresee. Once city policymakers employ this policy, mortgage bankers will be much more reticent to make loans to people there, ultimately limiting the city’s housing supply. Furthermore, this policy will be yet another example of policymakers attempting to raise homeownership rates when its unclear that homeownership is beneficial, especially for those who can’t afford it comfortably. The policy will doubtless have other unintended consequences yet unknown. Eminent domain often results in the opposite of what policymakers say it will; slum clearance creates slums and giving individuals’ property to corporations to create jobs ultimately results in decreased economic growth. In this case, using eminent domain to increase affordability for homeowners will likely lead to lower homeownership rates and more expensive housing in cities that employ this strategy.
Polls demonstrate that a large majority of people oppose eminent domain for economic development. Despite this stated support, all but a handful of states permit eminent domain based on the subjective and easily manipulated designation of “blight.” Despite eminent domain’s long history of being used for racist ends and ongoing use to eliminate low-cost housing, eminent domain fails to spark the widespread liberal outrage it deserves. The liberal bastion of The New York Times editorial page not only stayed silent when its business side used eminent domain to clear away existing businesses for its new headquarters, Matt Welch of Reason points out it was one of few neighborhoods across the country to throw its support behind the Kelo decision. The corporatism inherent in using eminent domain for economic development is an area where those on the left and free marketeers should be able to find plenty of common ground to support state-level reforms. Unlike many areas where public choice incentives make policy reform unlikely, eminent domain has not only concentrated benefits, but also concentrated harms. In turn, this makes it an area of land use policy where reform should be possible.
1) Ed Glaeser writes at the Boston Globe on Detroit, “Sensible people don’t incur debts during their peak earning years and then expect to pay the bills when their income starts to fall. Detroit did just that. Detroit’s debt overhang doesn’t just impose overly high costs on the city’s now modest tax base. It also scares off new businesses. What firm wants to own part of that obligation?”
2) I’m on the Cato Daily Podcast talking about Detroit and municipal bankruptcy and writing about how creating a charter city could help the city’s population and economic growth challenges at The Umlaut.
3) Ilya Somin points to the role of eminent domain in slum clearance and urban renewal efforts as a key contributor to the city’s decline.
4) Cost overruns aren’t just for transit. Construction on a Wayne County jail was halted after costs went 30-percent over budget, and the county is now seeking proposals from developers to buy the seven acre site. This is a fortunate development from an urban development perspective because anything a private investor builds will be better for downtown Detroit than a prison.
5) On an uplifting note, Sandy Ikeda writes at Wabi Sabi about the role of cities in the market process:
Living cites and successful markets bring intellectually and culturally diverse people together to their mutual advantage, but they also create conditions in which vast amounts of novel information—about science, technology, religion, music, the arts, and lifestyles—get dispersed very rapidly. That in turn allows all kinds of people, the ordinary and the extraordinary, to experiment and to make new connections among all that information, generating even more diversity and attracting even more people. In this way, cities become “incubators of ideas” and economic growth. The process is highly dynamic, but also very messy and, yes, in a sense inefficient. Most experiments fail. But someone who fails in a city, unlike her counterpart in less-urbanized cultures, need not starve as a result, and there is more likely to be some new opportunity just around the corner. We see the successes that drive innovation, but the failures are important, too.
While House Republicans have stripped food stamp benefits from the farm bill to get enough votes to pass the bill’s agricultural supports, the Supplemental Nutrition Assistance Program may be added back into the bill in conference with the Senate. The farm bill get its strength because it aligns the interests of urban Democrats and rural Republicans in Congress, facilitating log-rolling where the majority of congressmen are willing to support the bill because it directly benefits their districts.
While the food stamp program has in the past made up a large portion of the bill’s costs, with these these funds flowing primarily to urban residents, urbanists should be leery of the urban-rural alliance that facilitates continued support for the farm bill. Aside from the primary cost drivers including nutrition programs and farm supports, the bill also includes measures like rural broadband and rural utilities services loans designed to subsidize living in areas where providers do not find it profitable to provide services.
Unlike SNAP benefits, which are available for rural and urban residents based on income, rural infrastructure support is allocated to locations rather than individuals. Providing subsidies based on location is hugely attractive to Congress because it allows members to provide concentrated benefits directly to their constituents. However, subsidizing individuals’ choices to live in areas where building infrastructure is inefficient limits economic growth potential. Cities provide better job opportunities and are centers of innovation, so policies that subsidize rural living don’t make sense.
While the farm bill is a clear example of an urban-rural alliance that facilitates these subsidies, many programs similarly subsidize infrastructure in rural areas from USPS providing flat-rate delivery to the Essential Air Service program that subsidizes service to 163 airports that would otherwise not be profitable. Because all senators represent states with rural post offices and most have constituents who use airports in the EAS program, the political system is set up to maintain these subsidies that lead some people to choose to maintain a rural lifestyle.
This isn’t an argument that city residents aren’t getting their fair share of federal spending; in fact, residents of urban counties received more per capita spending than those is rural counties (link to 2010 data, the most recent available). Rather, urbanization is a process that provides benefits both to those who move to cities and those who live there through greater economic innovation and cultural diversity, so the political gains of rural subsidies come with high costs. As Ed Glaeser explains, urbanization is a key part of economic growth within the United States, with people in cities being more productive than those who don’t.
“the three largest metropolitan areas producing 80% of GDP but containing only 13% of population.”
Rural living has its own set of advantages that individuals should be free to choose if they like, but this lifestyle choice should not be subsidized by those who choose to live in cities and suburbs. Subsidies should follow individuals rather than locations to avoid discouraging urbanization.
Michael Tolle’s book, What Killed Downtown? Norristown, Pennsylvania from Main Street to the Malls, details the rise and fall of Main Street in one American small town. His case study relies on interviews with many Norristown residents who lived through the growth and decline of downtown alongside detailed analysis of downtown retail statistics. Tolle paints a picture of Norristown dating back to the time of William Penn through 1975, at which point he pronounces downtown dead. The depth of history in this case study including both economic trends and urban policy dating back to the town’s Colonial origins puts the story of the city’s street grid in a historical context that is not often available in urbanist literature.
Of particular interest, Tolle details the policy debates in Norristown surrounding traffic and parking dating back to the 18th century. This includes a description of Norristown’s location near the intersection on the Native American trails fanning out from Philadelphia, to the transition from turnpikes and toll bridges, to free, public roads. He explains the origins of the town’s original street grid, with 50-feet wide streets and 24-feet wide alleys and covers in detail the Borough Council’s more recent debates on parking meters and the move to making downtown streets one way. Even having never been to Norristown, I was engaged by Tolle’s descriptions of Norristown’s retail, restaurants, hotels, and personalities.
In the first chapters, Tolle explains that downtown Norristown grew increasingly successful with the advent of railroads and streetcars that made it easier to travel to and within Norristown. While the growth of highways in the following decades increased the ease of automobile travel passing by Norristown, frustrations with traffic and parking on Main Street mounted. The Borough Council implemented parking meters as a step toward managing parking supply. Initially their revenue was promised to go toward creating off-street parking in the downtown area, but instead the Borough Council siphoned this revenue stream into the general fund. Because parking meters had a one-hour minimum, they also hurt businesses and customers by discouraging short shopping trips. Some of Donald Shoup’s insights, such as the importance of allowing parkers to pay for only the time they need and allocating meter revenue to parking benefit districts may have reduced downtown Norristown’s troubles.
Tolle explains the town’s original 1934 traffic ordinance which came about as the competition for space for both traffic flow and parking increased:
This struggle would divide Norristown internally, and be a recurring irritant to a borough government and population that increasingly had to struggle to survive in a fundamentally changing world. While the issues of traffic and parking and their many ramifications would become lost in their own complexity, they at all times operated within a physical reality that was hard, simple, and unchangeable. Downtown Norristown between Arch and Markley streets was just under six-tenths of a mile long, a little more than 3,100 feet.
In the midst of Main Street’s rapid decline following World War II, downtown banks got together to finance a pigeon hole garage, designed to provide efficient parking for cars on a small lot. Unfortunately the technology failed, leaving downtown without new off-street parking and leaving the banks stung from financial loss on the garage effort. Tolle explains in detail how downtown Norristown never solves its parking problems. Even though downtown Norristown has fallen far from the shopping destination that it once was, downtown parking meters remain a contentious issue with the need to manage parking supply through prices bumping up against demand for free short-term parking.
He ends with an analysis of the “suspects” that killed downtown, including local and county government, the downtown merchants, and shopping malls. He assigns a share of the blame to each subject, but ultimately concludes that the largest share of blame lies with the people who chose to start shopping at suburban locations rather than historic downtowns as they had the opportunity to do so:
Ultimately, we have to admit the truth. We did it. We killed the downtown. We did it by falling in love with our cars, and with everything they came to represent for us: independence, possibilities, expanded horizons, status.
He concludes that cars and urban street grids are fundamentally incompatible, leading to the slow decline of areas on historic street grids as customers hear the siren song of “free, ample parking.” Further, Tolle connects this decline to the loss of social capital that comes with a downtown where shoppers know the owners of the stores that they frequent. While he is certainly correct in part — the option of free, ample parking outside of central business districts has proved insurmountable competition for some American downtowns — I find this an unsatisfying conclusion.
American downtowns are thriving in spite of cars in cities as small as Burlington and as large as New York with street grids comparable to Norristown’s. Boston’s street network is even less hospitable to cars than a grid but supports plenty of shopping districts. However, even when these historic downtown areas have profitable retail districts, often they are filled with more mall stores rather than the type of independent retailers that Tolle favors. It seems that the trend toward chain stores is driven by factors outside of urban form and even if urban policies allowed downtown entrepreneurs the agility to compete with malls, their profitability might require having chain stores as key downtown tenants.
Tolle provides a very well done case study that explains how parking and traffic policies combined with a failure to adapt contributed to one small town’s downtown decline and its relevance for other small cities across the country. He provides a thorough history and a portrayal that will be interesting to anyone interested in the lessons learned from a thorough statistical and narrative portrayal of what happened to one American city’s historic core.