Russell Roberts on Government Intervention in Housing

Russell Roberts of George Mason University, CafeHayek, and Econtalk wrote of series of Cafe Hayek posts on the various federal interventions in the housing market:

Housing markets without the benefit of hindsight

Fannie reaches its goals–sort of

Zero Down!

Fannie and Freddie’s other mission

Section 8

Bill cared too

Affordable equals “subprime”

Calm down

And don’t forget Andrew Cuomo

Shiller and fundamentals

The role of the CRA

It’s not the CRA

No money down, revisited

Bear Stearns, the CRA, and Freddie Mac

Stiglitz on the crisis

Portland Ideas??

I’m visiting Portland, Oregon for 5 days through next weekend for a wedding. It’s my first time there and I hear it’s a great city. What are the must-does to get the genuine urban experience?

What are Portland’s specialty foods?

What neighborhoods should I make sure I visit?

Any new developments I need to see to witness what ways Portland is growing? Or should I say “smart” growing?

Update: Who knows of the best locations to witness the most dramatic examples of Portland’s Urban Growth Boundary?

Parking Minimums Hamper Development and Affordability

Thanks to Dan and Benjamin for separately tipping me off to this link:
AP: Cities rethink wisdom of 50s-era parking standards

Like nearly all U.S. cities, D.C. has requirements for off-street parking. Whenever anything new is built — be it a single-family home, an apartment building, a store or a doctor’s office — a minimum number of parking spaces must be included. The spots at the curb don’t count: These must be in a garage, a surface lot or a driveway.

Parking requirements — known to planners as “parking minimums” — have been around since the 1950s. The theory is that if buildings don’t provide their own parking, too many drivers will try to park on neighborhood streets.

In practice, critics say, the requirements create an excess supply of parking, making it artificially cheap. That, the argument goes, encourages unnecessary driving and makes congestion worse. The standards also encourage people to build unsightly surface lots and garages instead of inviting storefronts and residential facades, they say. Walkers must dodge cars pulling in and out of driveways, and curb cuts eat up space that could otherwise be used for trees.

“Half the great buildings in America’s great cities would not be legal to build today under current land use codes,” said Jeff Speck, a planning consultant. “Every house on my block is illegal by current standards, particularly parking standards.”

Opponents also say the standards force developers to devote valuable land to parking, making housing more expensive.

“We’re forcing people to invest in spaces for automobiles rather than in spaces for people,” she said. “There’s no way to recover that use.”

Happy Park(ing) Day 2008

I guess I must not be hip enough to have known about this beforehand, but there’s a very interesting citywide event happening here in New York today called Park(ing) Day. All throughout New York City, people are reclaiming parking spaces for their street-side enjoyment. It’s a very novel idea that helps convey a very important economic point: the opportunity cost of public parking spaces.

Of course, the users are gladly feeding the meters, so who could complain? Who says we can’t let the market decide the highest-and-best use for the spaces?!

Here’s a video from last year’s event:

WSJ: Rent Control Is the Real New York Scandal

In case you didn’t catch it last weekend, Eileen Norcross wrote an excellent piece on rent control in New York. She touches on Charlie Rangel’s four rent control apartments scandal, some history of rent control in New York, the destructive results of rent control, vast inefficiencies caused by rent control, and moves to further subsidize low and middle income housing in New York.

I found this paragraph to be particularly startling, and I would bet that the vacancy rate for stabilized apartments is well below the overall vacancy rate:

New York has a city-wide vacancy rate of just 3% — and when good rent-stabilized apartments come on the market, you have to either know someone or pay someone (a broker, for example) to get it.

The result is that many renters who pay below-market rents are reluctant to move — because it’s too difficult to get as good a deal elsewhere in the city. Thus, economists Ed Glaeser and Erzo Luttmer estimate that 21% of the city’s renters live in apartments that are bigger or smaller than they would otherwise occupy. The controlled rents certainly don’t increase the number of affordable apartments.

This demonstrates the hoarding effect, which we can see hampers mobility and the ability of a location to adapt to market shifts.

Norcross agrees, ending the rent control regime will be a step towards solving New York’s housing shortages:

There is a better way to address the lack of reasonably priced housing in the city. If Rep. Rangel, Gov. Paterson and all the other well-to-do New Yorkers lost their rent-controlled or rent-stabilized apartments, there would be a loud public outcry to loosen regulation and allow more new construction.

The Market, Zoning, and Freedom.

J. Brian Phillips wrote a great post at Houston Property Rights about liberal property rights in Houston, but what Brian had to say applies to every place. Here’s a snippet, but the entire post deserves a reading:

when developers and builders see a need for greater density, they respond accordingly. And they can respond relatively quickly because they do not need to spend years seeking the approval of those who do not own the property.

The market is a dynamic place. Each participant is motivated by his own self-interest, seeking to find the best use for his abilities and assets. When the market is unfettered, individuals can act as their judgment dictates, even when others think their ideas are folly. They need not convince the ignorant, the short-sighted, or bureaucrats. They need only convince those who choose to deal with them– their investors, their employees, and their customers. And each of these are motivated by their own self-interest.

Those who seek to impede the market, which means impede the voluntary choices of individuals, are motivated by something entirely different. For all of their rhetoric about protecting the public or promoting the common good, their real goal is control. Their real goal is control over the men and women who build and produce.

His writing concisely conveys many great points, and then he wraps it up with a rallying closing:

no individual has a right to demand that others provide for his sustenance or happiness. He cannot compel others to provide for him, just as others cannot compel him to provide for them. He cannot force others to sacrifice for him, nor can others force him to sacrifice for them. That is not anarchy, that is the rule of objective law. That is freedom.

Econtalk Podcast: Shiller on Housing and Bubbles

Shiller on Housing and Bubbles

Robert Shiller of Yale University talks with EconTalk host Russ Roberts about the current housing mess and related financial market problems. Shiller argues that the decade-long run up in housing prices was a bubble where speculative fervor outweighed any economic fundamentals. He also discusses the genesis of the Case-Shiller housing price index and his idea for how it might be used to reduce risk in the mortgage market. Note: This podcast was recorded on September 5, 2008, days before Secretary of the Treasury Paulson put Fannie Mae and Freddie Mac into conservatorship.

Another On “Conservatives” and Urbanism

While I sympathize with the theme and agree with regards to roadway spending and “conservative” hypocrisy, a recent article in the progressive The American Prospect takes a narrow-minded view of politics and urbanism, while throwing around broad generalizations about evolution and global warming to support their assertions:

The Conservative Case for Urbanism

In fact, one doesn’t have to be concerned about climate change at all in order to support such policies; values of fiscal conservatism and localism, both key to Republican ideology, can be better realized through population-dense development than through sprawl.

Tom Darden, a developer of urban and close-in suburban properties, said Wednesday, “I’m a Republican and have been my whole life. I consider myself a very conservative person. But it never made sense to me why we would tax ordinary people in order to subsidize this form of development, sprawl.” Darden told the story of a road-paving project approved by North Carolina when he served on the state’s transportation board. A dirt road that handled just five trips per day was paved at taxpayer expense, with money that could have gone toward mass transit benefiting millions of people.

“Those were driveways, in my view, not roads,” Darden said.

I agree with Darden. However, so-called “progressives” fall into the same narrow minded trap when they support public transportation as a solution to global warming that “conservatives” fall into when they try to protect their auto-centric lifestyle. Many are really calling for more of the same top-down overspending on transportation infrastructure that will require a taxpayer bail out at some time in the distant future. Where is the rational voice trying to slow down overspending on all energy-reliant, sprawl-creating, redistribution of productive resources? While existing transit may be less bad environmentally in comparison to highways when looked at from a narrow point of view, it is a common mistake to assume that more spending on new infrastructure of any form will create denser living patterns. Yet we hear the top-down paternalistic rhetoric over and over:

“People don’t want to live 40 miles away from their workplaces,” Coleman said. “But we have to offer them options. If we can build a light rail line into the city of St. Paul and build the density of business around it that we are planning, we will be able to significantly alter people’s lifestyles.”

But in order to build public support for such policies, conservatives must join progressives in rethinking the United States’ geography. Density is cost effective, it fosters small business development at the local level, and it strengthens ties within communities. None of that should be anathema to either national party — unless they continue to put the interests of construction behemoths and automakers above the interests of ordinary Americans.

I would argue that “progressives” who wave the banner of environmentalism, while well-intentioned, are no friends to urbanism. I plan to dispel the myth that more spending on public transit will lead to denser living patterns in a future Urbanism Legends post. If these “progressives” really want denser living and a more environmentally friendly transportation network, they should rethink their love affair with top-down planning and spending, including on new transit. Afterall, progressivism brought us Euclidean Zoning in the first place.

rationalitate hits the nail one the head in response to the American Prospect article, and hits on some other points I didn’t get into:

But what it doesn’t mention is that the sort of sprawl that dots America’s (mostly suburban) landscape is enabled by zoning and minimum parking regulations, and that the suburbs might be a lot denser if people were allowed more complete property rights. I don’t know if it’s because the Republican party has strayed so far away from its limited government roots that this no longer qualifies as a “conservative” issue, or if the author mistakenly equates municipal government with individual choice, or if the author is just plain ignorant as to the root causes of sprawl. But in any case, she took what could have been an insightful topic, stripped away any persuasive arguments, and left readers with the impression that urbanism simply isn’t compatible with American conservatism. And that’s a shame.

I’ll go with: “the author is just plain ignorant as to the root causes of sprawl.”

[HT: The Bellows]