Brookings Study Ties Exclusionary Zoning to Gaps in School Performance

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Last week the Brookings Institute released a study by Jonathan Rothwell on the relationship between exclusionary zoning and school performance. He points out that this is the first study linking zoning to educational outcomes. The findings demonstrate that cities with stronger exclusionary zoning policies have larger differences in test scores across schools. This finding makes sense, as exclusionary zoning policies segregate households by income, and household income is strongly correlated with children’s educational outcomes.

This research is important because school district quality is a key factor in families’ decisions of where to live. I think that school quality is likely an important factor behind many NIMBY efforts too, as parents in a neighborhood may be afraid that lower-income residents moving into the school boundary will bring down the quality of education. Whether or not this is a valid concern on NIMBYs’ part, perception is all that matters.

Rothwell’s dependent variable is called the school-test score gap, or the difference between a school’s test results and the state’s test results. So his results don’t tell us whether reducing exclusionary zoning will improve individuals’ outcomes or merely bring schools’ averages more in line. Of course what we would like to see is improved absolute educational outcomes, particularly for those students with the poorest performace. Theory does suggest some reasons that more equal schools could improve absolute student results, one being that more experienced teachers typically do not work in a city’s worst-performing schools. Another is that students may do better when they are surrounded by higher-achieving classmates. Through those channel and perhaps others, reducing disparities across schools could improve low-income students’ results.

In developing the case for why it’s important for children of all income levels to attend schools with higher median test scores, Rothwell cites studies that demonstrate that “the quality of schooling is enormously important to both test scores and future economic success.” However, he also acknowledges that studies involving school lotteries, in which children are randomly assigned to higher or lower performing schools, have less clear results about the impact of schooling on education. This is a key distinction because many studies of education are plagued by the difficulty of collecting data on some of the variables that affect student success. For example, parental involvement in schooling, parents’ time spent reading with children in early childhood, and other aspects of a child’s lifestyle are difficult and expensive to measure. Understandably, then, these variables are often omitted from studies of educational outcomes, biasing the estimated impacts of the variables researchers do include. This is particularly true when studying the effects of a child going to a higher-performing school without a lottery; a parent who makes a significant effort to get his child into what he believe is a better school than the neighborhood school is likely making extra effort to help out his child’s education at home in other ways.

While Rothwell is supportive of policies such as charter schools and voucher programs that give parents the opportunity to send their children to schools outside of the one tied to their address, he seems to be even more supportive of eliminating exclusionary zoning and requiring municipalities to allow multifamily housing. While clearly I am against exclusionary zoning, I’m not convinced that this is necessarily the right policy tool for improving educational outcomes. Instead, I would suggest any policies that move away from requiring children to go to the school in their neighborhood. This connection eliminates any semblance of competition among schools and contributes to the incentives for residents to lobby against potential new neighbors. Land and education are two separate markets that government has tied together with negative (un)intended consequences.

From an educational perspective, though, one reason to support the elimination or reduction of exclusionary zoning is that this would allow more people to move to cities. Cities contribute to economic growth, and we know that children from higher income families tend to do better in school. Future studies could build on what Rothwell has contributed by looking at low-income students’ educational attainments when land use restrictions are relaxed or when school attendance is not tied to where they live.

Note: Rothwell also recently wrote a great piece in The New Republic about zoning as an extractive institution. I hope to write more about zoning from a new institutional perspective in the near future.

2012 Market Urbanism Meetup

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Readers,

We are going to have a reader meetup on May 5. It will be a format similar to last year. Market Urbanism friend, Sandy Ikeda will be giving a tour of Brooklyn Heights as part of the Jane Jacobs Walk program that celebrate’s the life and legacy of urbanist Jane Jacobs. Sandy’s tour was so popular last year that he is giving two tours this year. In fact, the tour was so compelling, I moved back to the neighborhood. (well ok, that wasn’t the only reason)

Let’s plan on attending Sandy’s tour from 4:30-6:00 pm on Saturday, May 5th. The tour starts at the steps of the Brooklyn Borough Hall. After the tour, we’ll convene at the Henry Street Ale House at 62 Henry Street, near where the tour ends.

This year, Stephen is a genuine Brooklynite, so you’ll have the opportunity to meet him. Unfortunately, Emily won’t make it to town this year. Sandy will probably also join us.

Last year, I assumed I’d be the only 6′-5″ person there, so that’s how I told people to identify me. However, there was another person about the same height on the tour, so readers said they weren’t sure which one was me. The best way I can assure that doesn’t happen again is to wear a White Sox baseball cap. What are the odds of two of us?…

Details:
May 5, 2012
Walking Tour: 4:30 PM at Brooklyn Borough Hall
Meetup Afterwards: 6:00 PM at Henry Street Ale House, 62 Henry Street

Hope you can make it. See you all there!

Adam

PS. In case you are interested, there are many other Jane Jacobs Walks that weekend. For example, this year there will be a Jane Jacob’s Walk tour of the area around the Atlantic Yards site given by Norman Oder. That should be interesting for Market Urbanists…

Height Limit Links

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1) Yesterday, two pieces on Congressman Darrell Issa’s proposal to relax the federal limits on DC’s buildings heights got a lot of coverage. At City Block, Alex Block makes the key point that outside of downtown, DC’s density is limited by zoning, rather than the height limit. He supports allowing more multifamily housing by, for example, dividing row houses into apartments. He also makes the point that taller buildings can actually add to the vistas that height limit proponents are so concerned about. I think this is particularly true on the 14th Street Corridor, Connecticut Ave, and New Hampshire Ave.

2) On the other hand, Harry Jaffe at the Washington Examiner denies the laws of supply and demand, claiming that increasing allowable height could not possibly lower rents. He writes of the limit, “It has forced development out of downtown and into the neighborhoods, around Metro stops, which is healthy growth: out, not up.” The most troubling part of his piece is that he suggests developers’ use of the profit incentive is “about greed, period,” ignoring the mutual benefits that increased density in the city would permit.

3) Will Doig interviewed me for a piece on historic preservation at Salon. He concludes, “Landmarking is meant to preserve structures whose loss would be an affront to history. Removing entire neighborhoods from the natural evolution of cities is another thing entirely.”

4) Matt Yglesias observes that in Tom Vanderbilt’s series about pedestrianism, most of the cities with the highest Walk Scores are liberal. I think Matt rightly concludes that this correlation is primarily driven by older, more walkable cities being coastal, where more liberal people tend to live. However, this also ties in to a question Charlie Gardner raised a while back with regard to proposed changes to the zoning process in Tennessee and Arizona:

Oddly, the idea of selectively or fully repealing zoning  – a perfectly legal course of action – seems not to have gained any traction even in such ostensibly pro-property rights states as Arizona or Tennessee.  Arizona’s libertarian-supported Proposition 207 focused on declines in property value resulting from rezonings, while avoiding the broader point that it is zoning itself that serves as the greatest suppressant of
both property values and the free use of land.

[. . .]

Do libertarian principles perhaps yield to a strong personal preference for low-density, use-segregated single-family zoning and fears of change? Are restrictive covenants, in spite of the example of Houston, seen as an inadequate stand-in? And why cast the language of these statutes in terms of landowner objections to city rezonings, rather than granting owners the right to obtain rezonings on their own terms?

Mandating attractive urban design

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The most recent installment of the American Enterprise Institute’s series Society and Culture Outlook features a piece about the role of urban design in how people use cities. The article “A plea for beauty: a manifesto for a new urbanism” by Roger Scruton is a deviation from AEI’s typically conservative view toward central planning. Scruton favors heavy-handed planning of the appearance of the built environment, essentially advocating for strict form-based zoning codes:

Many suggestions have been made as to how an attraction to the center might be generated. Building downtown convention centers, expensive museums, and concert halls; offering tax credits for city-center businesses; creating enterprise zones; and removing some of the regulations that make living, moving, and trading downtown so difficult have all been tried, and none has worked. And the reason they do not work is because they are addressing symptoms instead of causes. People flee from city centers because they do not like city centers. And they do not like city centers because they are alienating, ugly, and without a human face. Or rather, they do not like city centers when they are alienating, ugly, and inhuman, the normal case in America.

[. . .]

The proof of this is easy to find in the old cities of Europe. People choose to live in the center of Paris, Rome, Prague, or London rather than the periphery. Others who do not live in those cities want to spend their vacations there to enjoy the culture, entertainment, and beauty of their surroundings. These are flourishing cities, in which people of every class and occupation live side by side in mutual dependency while maintaining the distance that is one of the great gifts of the urban way of life. And there is a simple explanation for this: People wish to live in the center of Paris because it is beautiful. It is also lively and rich in every kind of cultural and recreational opportunity. But it is rich because people of all walks of life live there—not just people engaged in specific occupations, but also the cultural elite—and this has made Paris a symbol of the urban experience, the cité pleine de rêves (“city full of dreams”) of Baudelaire.

I disagree on the cause and effect in this process. Cities are beautiful because they are largely the spontaneous result of individuals’ efforts to build attractive places. Scruton cites Washington, DC as an example of an aesthetically well-planned American city because Pierre L’Enfant paid close attention to details like sight lines down avenues. While DC’s layout is certainly orderly, Scruton and I have a different sense of aesthetic appeal. To me, areas of the city that were planned from on high like the National Mall are pretty desolate when not being used for a  festival or team sports. While he advocates top down planning of city design, he doesn’t distinguish between DC’s long blocks and wide avenues and the narrow winding streets of Venice for what planners should look to. Planned urban design can vary in quality, but the evidence that city planning of today produces results that are preferable to cities built before the rise of planning is unconvincing.

I’m in complete agreement with Scruton that for cities like Venice or Prague, urban design plays an important part in their appeal. But there are plenty of places like Singapore, Hong Kong, or many parts of Manhattan that have no problem attracting residents with more modern aesthetics. Traits that lead cities to become less useable, in my estimation, include surface parking, poorly designed open space, wide blocks, and setbacks. These design features come from the top down at least as often as from the bottom up.

One reason Scruton advocates top-down decisions for urban design is that individuals are prone to making poor design decisions, which could ultimately lead people to abandon center cities for suburbs. What he leaves out is that central planning is also prone to creating aesthetically unpleasing urban design. (See, for example, the snout house. I don’t think the free market could have come up with this one without setback and lot size requirements and wide streets.) Scruton laments that suburbs do not bring people together the way that cities do, but this is at least in part a product of centrally planned requirements for suburban zoning.

The real problem with mistakes in top down urban aesthetic design is that these mistakes are likely to be systematically repeated. If an individual architect or business owner comes up with an unpopular building design, the market provides feedback that will identify the mistake. Scruton writes about poor aesthetic design in the context of today’s architectural trends:

Appearances do not matter, when utility stares from every glass façade, and when the demands of the human eye are everywhere repulsed or ignored.

He suggests that the ugliness of glassy towers plays a part in driving people from center cities to suburbs. This doesn’t make much sense to me, as the rising popularity of glass facades correlates with increasing demand to live in city centers. I can certainly see that modern architecture is not to everyone’s taste (the horror of having to live somewhere like this), but precisely because tastes are subjective, we should leave design decisions to entrepreneurs, not planners. Many factors drive people to choose the suburbs over cities, but I don’t see building aesthetics as a major culprit.

Detroit’s Financial Future

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After flirting with Chapter 9 bankruptcy or a state takeover of its finances, Detroit has reached a deal with the state of Michigan that will allow it to remain independently managed with a requirement for state oversight. The Detroit Free Press reports:

The city has seven days to create the positions of chief financial officer and program management director and 30 days after that to make a hire from a list of three candidates from the mayor and state treasurer. Lewis said the city is compiling a list of candidates.

“We’ve got a lot of requirements that are in the agreement,” Lewis said. “We’ve got a lot of work to do (with the agreement) and then getting to the work of fixing the city. Our focus is on executing the plan and getting the resources here to execute the plan.”

Snyder reiterated that the city “shouldn’t expect” a cash bailout, adding that Detroit is one of many troubled communities in the state. But he said the state would use its resources in a variety of ways to help the city.

Snyder said the agreement assures the things that need to be done will get done, describing it as a “progressive series of steps” that first allow the mayor and the council to make the decisions, and then empowers the project manager to do so if they don’t. “This is a legal document designed to deal with situations when they don’t go right,” he said.

While bankruptcy protection offers the advantage to cities of achieving a more manageable debt load, it doesn’t come without a cost. Bankruptcy would add an additional stigma to Detroit, already known for municipal financial distress, encouraging business disinvestment.

Vallejo, CA filed for bankruptcy in 2008, and as the New York Times explains, the city is still in a difficult financial position. After bankruptcy cities have less room in their budgets to provide public services such as infrastructure, parks, and schools while their tax rates don’t fall accordingly. This contributes to further erosion of the tax base as businesses and residents leave the city.

Municipal bankruptcy is always a two-sided issue involving both revenue and debt. At The Atlantic Cities, Emily Badger covers the equation from the revenue side. While cities often both subsidize and enforce sprawl through road-building, parking requirements, and minimum lot sizes, these policies are detrimental to their property tax equations. She cites the positive example of Asheville, NC as a city that has taken advantage of denser downtown redevelopment to improve its ratio of property taxes to infrastructure costs:

Asheville has a Super Walmart about two-and-a-half miles east of downtown. Its tax value is a whopping $20 million. But it sits on 34 acres of land. This means that the Super Walmart yields about $6,500 an acre in property taxes, while that remodeled JCPenney downtown is worth $634,000 in tax revenue per acre. (Add sales tax revenue, and the downtown property is still worth more than six times as much as the Walmart per acre.)

[. . .]

All of this is also just looking at the revenue side of the ledger. Low-density development isn’t just a poor way to make property-tax revenue. It’s extremely expensive to maintain. In fact, it’s only feasible if we’re expanding development at the periphery into eternity, forever bringing in revenue from new construction that can help pay for the existing subdivisions we’ve already built.

[. . .]

“The thing is it all works fine when you have all this new growth and the new gap is met by all these new permit fees – that’s like free money,” Joe Minicozzi [of Public Interest Projects] says.

Cities should not be in the business of requiring the sort of development that is most expensive for them to support. However, this analysis ignores the debt side of Chapter 9, one that may be even more difficult to tackle politically. Despite the harm that poor financial management causes, local elected officials simply do not have the proper incentives to avoid it.

Politicians operate on election cycles, and during their time in office they generally seek to provide their constituents with the best possible services at the lowest tax rate. This leads them to put off payment on long term debt and liabilities using accounting gimmicks and fiscal evasion techniques to spend more on goods that residents will see in the near term.

A combination of debt and declining revenue has put Detroit in the position it’s in today. Its urban development strategy must be a part of the property tax revenue solution. Perhaps the new officials that the city hires will help with debt management, but as long as elected officials influence municipal accounting, the incentives will be in favor of debt and deficits.

 

Cities and the Market Process: Part 4

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This series looks at some of the ways that people organize themselves to live alongside each other in cities. Part 1 looks at inherent problems with top-down planning, and this part will expand on this issue with the specific problems of pricing government-owned land.

Prices are an emergent order that convey information beyond what is available to any individual. Entrepreneurs are incentivized by profits to provide consumers with the goods that they are looking for. The market is constantly moving toward equilibrium as consumer preferences change and entrepreneurial discovery takes place. With all of these moving parts, equilibrium prices will never be achieved, but we will always be moving toward equilibrium as entrepreneurs respond to profit and loss feedback. For me, the clearest description of this market process is Israel Kirzner’s Competition and Entrepreneurship. 

The essay “I, Pencil” by Leonard E. Read provides a simple illustration of the dispersed knowledge that prices capture. He points out that there is not a single person on earth with the knowledge to construct a pencil, one of the simplest consumer goods available. Prices allow for this division of labor. While the land market is distinct from manufactured goods, prices play an equally important role in allocating land use. The knowledge of this highest value use is likewise disperse and tacit, so no one decision-maker has the necessary information to allocate land efficiently.

The problem of government pricing is perhaps most severe in below market-rate or zero-price street parking, but it can also be seen in open space, where the value of the land that is dedicated to (often unused) public space is not considered. In The Death and Life of Great American Cities, Jane Jacobs criticizes government-provided land use in the form of city sidewalks that are too narrow, parks that are too large or not visible enough to public view, and blocks that are too long.

Many have disagreed with her on all of the specifics of these criticisms, but there is little doubt that cities make mistakes in land use allocation. Because cities don’t make entrepreneurial profits or losses on the land use allocation that they select, the process of making improvements is slowed and may even go the wrong way. The way to test a better allocation of land is by allowing the price system to function. Prices provide the information for the profit and loss feedback system to tell entrepreneurs whether or not they are doing a good job, and when a city owns land and determines its use, this feedback is not available.

When we see parks that go unused or public spaces that create opportunities for crime rather than add value, the absence of profit and loss is in part to blame. While a city can set prices for government-owned land, it cannot be an economic actor like any other because it acts outside market incentives. When a city sets prices for the land that is owns, this is an improvement over the zero-price alternative, but the market process cannot be introduced to improve land use for property that remains government-owned.