Market Urbanism http://marketurbanism.com Liberalizing cities | From the bottom up Wed, 25 Apr 2018 15:29:52 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.5 https://i2.wp.com/marketurbanism.com/wp-content/uploads/2017/05/cropped-Market-Urbanism-icon.png?fit=32%2C32 Market Urbanism http://marketurbanism.com 32 32 3505127 Up close and personal http://marketurbanism.com/2018/04/19/up-close-and-personal/ http://marketurbanism.com/2018/04/19/up-close-and-personal/#respond Thu, 19 Apr 2018 13:27:42 +0000 http://marketurbanism.com/?p=9913 One of the popular sports broadcasts I used to watch as a kid promised interviews with athletes that would bring them to you “up close and personal.” As I was once waiting in line to order coffee at one of my favorite local coffeehouses there were several people ahead of me. I followed the “barista” […]

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One of the popular sports broadcasts I used to watch as a kid promised interviews with athletes that would bring them to you “up close and personal.” As I was once waiting in line to order coffee at one of my favorite local coffeehouses there were several people ahead of me. I followed the “barista” taking orders, with his dark-framed glasses, reddish beard, and slightly hurried manner. From a distance, in those few minutes I formed an expectation about his personality: Blasé and probably a bit curt; someone who really doesn’t want to be here. But when I came face-to-face with him and placed my order, I could feel his liveliness, warmth, and friendliness. My expectations needed revising.

It’s the same with cities.

From a distance, from an airplane or a photograph, we notice macro features and sweeping patterns that might form our first impressions. Noticing the layout of streets or the pattern of buildings from the air we might say something like “Oh, what an impressive skyline!” or “This place is a dump!”

For instance, New York, London, Paris have distinct skylines. Approaching these cities from the air is thrilling as we spot the Empire State Building dominating Midtown Manhattan, Big Ben and Parliament along the Thames, or the Eiffel Tower standing counterpoint to la Defense. Tokyo’s on the other hand is a different story, but that difference is informative.

Tokyo’s skyline is, at least to me, terribly underwhelming. Heavily bombed and burned during World War II and subject to devastating earthquakes throughout its history, Tokyo has few tall buildings compared to other major cities. Even as you drive in closer along the highway from Narita Airport the architecture for the most part remains boxy and drab. When you actually enter the central city, with the Sumida River winding below, you begin catch glimpses of Tokyo’s vitality if you look between the buildings. But it’s only when you actually walk the streets and public spaces—of Ginza, Shinjuku, and Nagano for example—do you finally experience the real Tokyo; feel what Ken-ichi Sasaki calls the urban “tactility” beneath your feet and through your skin.

But it’s not just Tokyo. I think that that’s also the same way you really get to know London or Paris or any other great city: “Up close and personal.”

Kevin Lynch explained that people form mental images of a city that overlap enough to help its inhabitants coordinate their activities. A tourist in New York City navitgating with a two-dimensional map with street and place names might tell her friend: “I’ll meet you at the southeast corner of 5th Avenue and 8th Street at 1PM.” But in Tokyo relatively few streets have names so finding an address is very different than in New York; while in downtown London, because winding streets change names seemingly every block, locals often measure distances by walking time or by landmarks.

As you spend time in a city and get a feeling for its environs, its inhabitants and their ways, how you navigate changes. Your map becomes a mental one, more detailed in some ways less in others. Experience doesn’t make the map less abstract, but abstract along different dimensions. A New Yorker then might tell her friend: “Let’s meet at the arch at lunch time.” Translation: “Let’s meet under the arch in Washington Square Park in Greenwich Village around 1pm.” The image of a city follows our subjective experience of how we actually use public space. Over time people somehow form a mutual image of parts of the city similar enough to be used to coordinate their plans with one another.

One of the common mistakes urban planners make is to assume the process works the opposite way, that you can impose a deliberately constructed pattern onto a cityscape and expect people to adjust their behavior to it in just the way you want them to. Sometimes that works but it doesn’t always work that way, especially with big plans involving large numbers of people, no matter how beautiful or efficient the design may be. To quote Jane Jacobs: “A city cannot be a work of art.”

 

[In this space I’ll be posting quotes, ideas, and excerpts relating to a book I’m writing (thus far untitled), which I might describe as “What I have learned from the economic and social theory of Jane Jacobs.”  My hope is to get thoughtful, informed feedback that will be useful in shaping the book.]

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Montaigne on Spontaneous Social Order http://marketurbanism.com/2018/04/16/montaigne-spontaneous-social-order/ http://marketurbanism.com/2018/04/16/montaigne-spontaneous-social-order/#respond Mon, 16 Apr 2018 16:02:31 +0000 http://marketurbanism.com/?p=9899 “In fine, I see from our example that human society holds and is knit together at any cost whatever. Whatever position you set men in, they pile up and arrange themselves by moving and crowding together just as ill-matched objects, put in a bag without order, find of themselves a way to unite and fall […]

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“In fine, I see from our example that human society holds and is knit together at any cost whatever. Whatever position you set men in, they pile up and arrange themselves by moving and crowding together just as ill-matched objects, put in a bag without order, find of themselves a way to unite and fall into place together, often better than they could have been arranged by art.”

Michel de Montaigne

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What About Vancouver? http://marketurbanism.com/2018/04/11/what-about-vancouver/ http://marketurbanism.com/2018/04/11/what-about-vancouver/#respond Wed, 11 Apr 2018 18:19:12 +0000 http://marketurbanism.com/?p=9845 Market urbanists such as myself tend to believe that if a place suffers from absurdly high housing prices, there is probably not enough new housing being built to accommodate rising demand. A recent paper argues that inadequate supply is not a significant part of the problem in high-cost Vancouver, primarily because the number of housing […]

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Market urbanists such as myself tend to believe that if a place suffers from absurdly high housing prices, there is probably not enough new housing being built to accommodate rising demand.

A recent paper argues that inadequate supply is not a significant part of the problem in high-cost Vancouver, primarily because the number of housing units has kept up with the number of people (p. 11)   It seems to me, however, that this theory overlooks people priced out of Vancouver, thus understating demand.

To put the matter in hypothetical form: suppose that in 1991, Nimbytown had 20,000 people and 10,000 housing units.  In 2011, Nimbytown had 30,000 people and 15,000 housing units; however, 30,000 more people are priced out of Nimbytown.    Obviously, it would be silly to say that housing is keeping up with demand.

Vancouver is, to be fair, adding housing supply- but at about the same pace it did 20 years ago.  From 1991-95, Metro Vancouver added about 18,000 housing starts per year, ranging from just over 14,000 in 1991 to just over 21,000 in 1993.    Housing starts then nosedived, not reaching the 20,000 level until 2007.  Between 2007 and 2011, the region averaged about 16,000 housing starts per year, slightly fewer than in the 1990s. In a region with a stagnant population, this would be a strong performance.  But from 1991 to 2011, the number of Vancouver households grew by over 40 percent, from just over 600,000 to almost 900,000.  So should a region with 900,000 households have the same number of housing starts as one with 600,000?  I don’t think so.

The paper blames Chinese investors for Vancouver’s high housing prices- and logically, any increase in demand should, other things being equal, increase housing costs.  But the author of the paper has written elsewhere:

There is very little good, government-collected data on the question of foreign ownership. No one disagrees on this point. This is to the discredit of federal and provincial authorities, who for years resisted gathering rigorous data, even though Mark Carney, then governor of the Bank of Canada, warned quite clearly in 2011 that the Vancouver real estate market was being affected by money from East Asia.  The fact that five or six years could pass without any effort to collect data is stunning and can’t help but stimulate a tinge of conspiratorial thinking. 

But there seems to me to be a contradiction between arguing that (1) Vancouver is expensive because it is being overwhelmed by a tidal wave of foreign demand and (2) there really isn’t enough data to determine whether there’s a tidal wave of foreign demand.   So we really don’t know very much about the demand-side element of housing costs in Vancouver.

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Are Houston’s Deed Restrictions “Basically Zoning”? http://marketurbanism.com/2018/04/11/houstons-deed-restrictions-basically-zoning/ http://marketurbanism.com/2018/04/11/houstons-deed-restrictions-basically-zoning/#respond Wed, 11 Apr 2018 14:00:39 +0000 http://marketurbanism.com/?p=9791 Houston doesn’t have zoning. As I have written about previously here on the blog, this doesn’t mean nearly as much as you would think. Sure, Houston’s municipal government doesn’t segregate uses or expressly regulate densities. But as my Market Urbanism colleague Michael Lewyn has documented, city officials do regulate lot sizes, setbacks, and parking requirements. […]

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Houston Neighborhood

Houston doesn’t have zoning. As I have written about previously here on the blog, this doesn’t mean nearly as much as you would think. Sure, Houston’s municipal government doesn’t segregate uses or expressly regulate densities. But as my Market Urbanism colleague Michael Lewyn has documented, city officials do regulate lot sizes, setbacks, and parking requirements. They also enforce private deed restrictions, which blanket many of the city’s residential neighborhoods.

A deed restriction is a legal agreement among neighbors about how they can and cannot use their property. In most cities, deed restrictions are purely private and often fairly marginal, adding rules on top of zoning that property owners must follow. But in Houston, deed restrictions do most of the heavy lifting typically covered by zoning, including delineating permissible uses and design standards. Whenever I point out that Houston has relatively light land-use regulations (and is enjoying the benefits), folks often respond that the city’s deed restrictions are basically zoning. This couldn’t be further from the truth.

Before I turn to the essential differences, it’s worth first observing how Houston’s deed restrictions are like any other city’s zoning. First, like zoning, Houston’s deed restrictions are almost universally designed to prop up the values of single-family houses. Despite the weak evidence for a use segregation-property values connection, this justification for zoning goes back to the program’s roots in the 1920s. Many of Houston’s nicest residential neighborhoods, like River Oaks and Tanglewood, follow this line of thinking, enforcing tight deed restrictions on residents that come out looking a lot like zoned neighborhoods in nearby municipalities like Bellaire and Jersey Village.

Second, both zoning and Houston’s deed restrictions are enforced by government officials at taxpayer expense. In most other cities, deed restrictions are overseen and enforced by a private group like a homeowners association, funding enforcement through required HOA fees. But in the aftermath of the failed 1962 referendum to adopt zoning, the Texas state legislature gave Houston the right to publicly enforce deed restrictions. This means that Houston taxpayers pick up the tab to enforce private rules regarding everything from land use to lot sizes. In 2003, these rules were expanded to allow the city to enforce restrictions related to minor issues like landscaping and architecture. In practice, this looks a lot like zoning.

Beyond these superficial similarities, deed restrictions are different from zoning in at least three crucial ways. First, deed restrictions don’t apply to the whole city. Writing in 1972, in his fantastic survey of Houston’s land-use regulations, Bernard Siegan estimates that no more than 25 percent of the city is covered by deed restrictions. Teddy Kapur, writing 30 years later, suggests a similar percentage. We have no real way of checking these estimates, since deed restrictions aren’t compiled in any kind of publicly available GIS format, but this generally comports with other estimates floating around. This is compared to zoning, which regulates 100 percent of urban land, regardless of the needs or preferences of local land users.

Where deed restrictions exist at all, they almost exclusively apply to single-family residential neighborhoods. Industrial areas and townhouses are only occasionally subject to deed restrictions, and commercial corridors and multifamily neighborhoods are almost never subject to them. Vacant land and agricultural land is also almost never subject to deed restrictions, meaning that unlike in zoned cities, this land is free to develop into the use and form most in demand at that particular time and place. In most zoned cities, acres of vacant land sit under-utilized because it’s zoned for uneconomical uses. This difference is important, since it means that policymakers don’t have to make (almost certainly wrong) guesses about the optimal use and density for all lots across all of time. All of this taken together means that nearly of three quarters of the Houston urban landscape isn’t subject to anything remotely resembling zoning and is free to change and adapt over time.

Second, deed restrictions are designed and initially implemented by people with the information and incentives to get the regulations right. Land-use regulation is, at its heart, a knowledge problem: how do we regulate, to what extent, and where? Unlike the zoning commissions or planners typically tasked with drafting zoning ordinances, the residential developers who normally develop deed restrictions have a clear, immediate signal about the desirability of their deed restrictions and a strong incentive to get them right through rising and falling property values.[1] Developers crafting deed restrictions under competitive conditions will regulate up to the point of maximizing property values and no more. To quote Siegan:

The landowner who engages, in effect, in exclusionary land use practices by restricting ‘excessive’ amounts of land risks suffering the economic sanctions of the private market, a hazard never confronted by local legislators. (79)

That is to say, implement too little private regulation, and your houses sell for less since prospective homebuyers aren’t confident that they will enjoy the amenities (e.g. purely residential community character) that they prefer. Implement too much private regulation, on the other hand, and your houses sell for less since prospective homebuyers will be forced to overproduce certain public goods (e.g. landscaping, design standards), or won’t be able to use their property as they might like (e.g. as home-based businesses). Thus, the market disciplines deed restrictions in a way that zoning is almost never disciplined, since shopping among neighborhoods is much easier than shopping among entire municipalities.

These market pressures lead to at least two interesting outcomes that distinguish deed restrictions from zoning: First, certain exclusionary regulations that are the norm in zoned cities—e.g. one acre minimum lot sizes—are relatively unheard of in Houston, since they would make it next to impossible for residential developers to outbid other land users. Second, even among single-family residential neighborhoods, the form and strictness of deed restrictions may vary by income and other factors, reflecting the obvious fact that different groups of people may have different preferences regarding how strictly—and in what way—their neighborhood should be regulated. This leads to an incredible amount of diversity among Houston’s deed restricted neighborhoods, a far cry from the standard “R-1” zoning district.

Third and finally, deed restrictions can and do adapt to changing market conditions over time. Your typical zoning ordinance is well over 40 years old. True, zoning can change through mechanisms like rezonings or variances, but these are ad hoc and frequently arbitrary, and rarely change the regulation for an entire area of town—let alone single-family residential neighborhoods. Full zoning rewrites are cumbersome and contentious. They are infrequent, and even when they occur, policymakers are loathe fundamentally change any particular neighborhood’s rules for fear of agitating vocal proponents of the status quo, irrationally afraid that any official zoning change would destroy the value of their homes. A planning professor of mine once joked, “Two things will survive the apocalypse: cockroaches and single-family zoning.”

Compare that to Houston’s deed restrictions, which nearly always incorporate expiration dates, after which the restrictions must be approved by a majority of residents every 10 or so years depending on the deed’s terms. At these intervals, residents can and occasionally do let the restrictions expire, allowing single-family neighborhoods to incorporate townhomes, apartments, and small businesses. As Kapur notes, however, residents often use these intervals as an opportunity to reconfigure the deed to reflect changing market conditions. Particularly in older neighborhoods within the 610 loop, where the original terms of the deed restrictions are often long-expired, residents are made to regularly come together to debate and discuss how they think their community should be regulated as part of the re-approval process, meeting as equals with relatively little top-down control of process.[2] This leads to the de facto upzoning of high-demand Houston single-family residential neighborhoods with surprisingly frequency, an unthinkable outcome in most zoned cities.

Outside of these regular official intervals, deed restrictions also regularly unofficially wither away, either as infractions build up unaddressed or residents forget to re-approve the deeds. This withering away of yesteryear’s regulations can and often does happen in Houston, allowing formerly single-family residential neighborhoods to gradually transform into mixed-use urban neighborhoods. Again, this is almost unimaginable in any zoned city, where regulations older than you or I are still on the books and fully enforced, regardless of how much the neighborhood in question has changed.

Make no mistake: public enforcement acts as an artificial subsidy for deed restrictions in Houston, almost certainly producing deeds that are more extensive and longer lasting than they might otherwise be under market conditions. Yet even allowing for this minor asterisk, it’s clear that Houston’s system of quasi-private land regulation is very different—and in certain key respects much better—than zoning.

Siegan concludes his discussion of this topic by perceptively noting that zoning implicitly tries to answer two very difficult questions:

  1. What is the extent of protection to which property owners are entitled?
  2. What powers should existing residents have to exclude other people and things from the municipality?[3]

Zoning addresses these questions using an opaque political process in which certain privileged special interests—namely homeowners—may impose their particular preferences across all time. Houston’s deed restrictions, on the other hand, are constantly rediscovering the answers to these questions. It all comes back to consumer preferences: if consumers desire things like large lots and ample off-street parking and are willing to pay more for the extra land, developers will respond by bidding up the land and implementing tight deed restrictions. If they either don’t want these restrictions, or aren’t willing to pay more for them, developers might still build the houses but with deed restrictions that allow for smaller lots, higher lot coverage, or certain complimentary commercial uses.

In this way, the process of identifying the optimal mix of land-use regulation is a dynamic discovery process, subject to ongoing changes in local conditions. As the costs of zoning stasis in cities like San Francisco become clearer, the value of understanding Houston’s uniquely dynamic system of deed restrictions only rises.

For future content and discussion, follow me on Twitter at @mnolangray.

[1] This should not be misinterpreted as an anti-planning (or anti-planner) screed. As I have written here on the blog, planners are very good at many things and deserve more respect in these spheres. That said, nobody—however smart and well-meaning—has the necessary knowledge to plan things like future land uses and densities for an entire city.

[2] This puts much of what we might otherwise call the “deliberative” or “participatory” planning in other cities to shame.

[3] These questions are posed on page 84. For Siegan’s full discussion of this issue, I strongly urge you to read Chapter 3 of “Land Use Without Zoning.”

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Cities are not man-made things http://marketurbanism.com/2018/04/10/cities-not-man-made-things/ http://marketurbanism.com/2018/04/10/cities-not-man-made-things/#respond Tue, 10 Apr 2018 16:36:16 +0000 http://marketurbanism.com/?p=9778 [In this space I’ll be posting quotes, ideas, and excerpts relating to a book I’m writing (thus far untitled), which I might describe as “What I have learned from the economic and social theory of Jane Jacobs.”  My hope is to get thoughtful, informed feedback that will be useful in shaping the book.] Architects and planners refer […]

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[In this space I’ll be posting quotes, ideas, and excerpts relating to a book I’m writing (thus far untitled), which I might describe as “What I have learned from the economic and social theory of Jane Jacobs.”  My hope is to get thoughtful, informed feedback that will be useful in shaping the book.]

Architects and planners refer to something called the “built environment” by which they usually mean things such as city streets and pathways and the grids made up by them, buildings of various kinds, plazas, the infrastructure of water and energy inflow and outflow, parks and recreation areas, unbuilt open spaces. Although parts of each of these urban elements were consciously constructed, usually by a team of individuals, the way that they fit together, except in the case of mega- and giga-projects, are not the result of a deliberate plan. Buildings in a particular location, for example, – offices, schools, residences, retail, malls, entertainment, places of worship, research facilities – are of different vintages, constructed by different people for different purposes at different times with different techniques, historical contexts, and sensibilities. But the way they all more-or-less complement one another, their “fit,” is an emergent, unplanned phenomenon.

I will refer to these elements collectively as the “built framework,” where the word “built” should not in all cases imply deliberate design.

What goes on within the built framework can also be planned or unplanned

There are, of course, the activities for which a particular element is intended (most recently, that is, because spaces can have multiple uses over time). A gas station, what we might call a “specialized space,” is primarily for pumping gas, not for seeing a football game, which you do at a stadium. But there are other activities that take place in or are facilitated by a given element, especially those that are “general spaces” such as sidewalks, that are not only unplanned but have significant regional consequences over time. They meet, plan, perform, work, play, and so forth on sidewalks and plazas in ways that no one could have foreseen.

However, even within a more specialized space, such as a corporate office, value-creating-but-unplanned discoveries (innovations or “intrapreneurship”) can take place. And certain specialized spaces, such as coffee houses or bookstores or concerts, are well-known for the serendipitous encounters and subsequent connections they enable.

  Private Space Public Space
Planned Order LIVING ROOM STREET PARADE
Unplanned Order FAMILIAL RELATIONS MARKETS & CITIES

Local economies are the context in which market processes largely take place. Cyber-commerce would seem to be an exception to this, but….

Our first step is to examine the microfoundations of cities. We examine, that is, how cities work from the point of view of individual actors at street-level.

The city is a relevant unit of economic analysis

Once we’ve grasped the nature and significance of cities and their local networks and processes that hold them together and keep them dynamically stable over time, we can examine the impact that the use of political means has on them.

The underlying assumption of Jacobs’s economic framework is that, like individual action, firms, and households in standard economics, the city (as she defines it) is a natural unit of economic analysis. That is, like individual action or a business or household, cities emerge spontaneously wherever economic development takes place, without the necessity of an exogenous act of creation, such as a city charter. And like a business firm, which standard economics has long regarded as a useful unit of analysis, cities need not always exist where there are people. Current estimates of the age of Homo sapiens range in the neighborhood of 300,000 to 350,000, but it’s only in the last 10,000 years that large settlements or proto-cities took root and human civilization began. (We examine some of this history in Chapter 2.) Today it is widely accepted that cities are a main driver of economic development and cultural innovation, a theme that we will explore in Chapter 5.

In contrast, nation-states are largely artificial creations with borders that are rigidly maintained except under exceptional circumstances. “The nation-state, which seems so powerful and fundamental today, is a late and transitory successor to the enduring city” (Vance 1990: 23). Cities tend to endure far longer than the states that encompass them. Cities are the locus of peaceful social change, cultural creativity, and economic revolution. States are the locus of social stasis, cultural reaction, and economic protectionism but the venue for war and violent political revolution. Note that I am not saying that nations-states as such cannot be units of analysis for economic theory and policy or for disciplines outside of economics. But they are essentially units of political analysis or political economy, not of purely economic analysis. Economists study them because (1) political boundaries create constraints on economic processes that have interesting consequences (e.g., international trade, exchange-rate movements) and (2) those with political interests (e.g., public choosers) want to know the national implications of various economic events or public policies. But cities that have spontaneously emerged over time are different. Like pure markets, a city is a “natural” unit of analysis. Indeed, I will argue that it may be useful to see the study of markets as essentially the study of cities.[1]

For instance, most of the concepts of (micro)economics pertain primarily to large settlements and cities. Take the following for example:

  1. competitive markets & impersonal exchange
  2. price system
  3. entrepreneurship & innovation
  4. extensive division of labor & division of knowledge
  5. weak ties & social capital
  6. externalities & public goods
  7. regional comparative advantage and efficiency

I hope the chapters that follow will clarify the close connection between these concepts cities. Like politics, economics is local.

What I hope you will take away from this book

To look and think about cities in a new way. To appreciate the nature and significance of cities in economic development and social and cultural change. To better see the limits of deliberate design, both private and governmental.

Again, the overall goal of my book is two-fold: 1) to educate a general audience about the nature and significance of the market process and how that relates to urban processes and 2) to inform professionals interested in market-process economics (and more specifically Austrian economics) and in urbanism (more specifically admirers of Jane Jacobs) how each can learn about economic and urban institutions and processes from the perspective of the other. I am aiming this book primarily at urbanists and afficianados of Jane Jacobs and secondarily at devotees of Austrian economics. My hope is that in doing so I can reach a wider, mainstream audience – there being far more admirers of Jacobs – while also enriching the analysis of Austrian economics.

Jane Jacobs didn’t call herself an Austrian economist, but she was one; she didn’t call herself a libertarian, and she wasn’t. She is I believe an excellent example of a liberal (in the American sense) whose policy prescriptions were however constrained by her grasp of economics. Her ideas complement an Austrian economist’s understanding of social processes but also can help the layman appreciate that “ought” presupposes “can.”

[1] I developed this argument in Ikeda (2007). https://link.springer.com/article/10.1007/s11138-007-0024-2

 

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Why another book about cities? http://marketurbanism.com/2018/04/06/another-book-cities/ http://marketurbanism.com/2018/04/06/another-book-cities/#respond Fri, 06 Apr 2018 15:11:19 +0000 http://marketurbanism.com/?p=9772 The starting point for Jacobs’s analysis and the focus of much of her thought is the city, its nature and significance. There are plenty of books out there that in some way celebrate cities.  Many describe cities as engines of economic development, wellsprings of art and culture, and incubators of ideas religious, social, and scientific. […]

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city books

The starting point for Jacobs’s analysis and the focus of much of her thought is the city, its nature and significance. There are plenty of books out there that in some way celebrate cities.  Many describe cities as engines of economic development, wellsprings of art and culture, and incubators of ideas religious, social, and scientific.  But few go very far in explaining why and how all that usually happens in a city.  Fewer still view the urban processes as expressions of “emergence,” or what some social theorists describe using the related term “spontaneous order.”  That is the perspective of this book and its main contribution: To look closely at what makes a city a spontaneous order and an engine of innovation, and to trace the analytical and policy consequences of viewing it this way.

Jane Jacobs is one of those exceptions, indeed an outstanding one.  In fact, she is probably the first to carefully examine, not only the nature and significance of cities, but to distill realistic principles that govern urban systems and to analyze the mechanisms of economic change that follow from those principles. Her analysis of the relation between the design of public space and social interaction offer insights that complement, and often exceed, those of Max Weber, Henri Pirenne, Georg Simmel (pdf), Kevin Lynch, and others. Her work also has deep connections with modern social theorists such as F.A. Hayek, Elinor Ostrom, Mark Granovetter, and Geoffrey West.

But she was not the first to develop conceptual tools congenial to understanding urban processes as emergent, spontaneous orders.  In fact they have largely been available for decades in the field of economics, although few professional economists, including urban economists, have fully appreciated the urban origins of many of their standard concepts and tools of analysis. Indeed, there is a tradition in economics and social theory that takes a Jacobsian view of the world in this sense.  It is a tradition that follows from the work of Adam Smith, Carl Menger, Ludwig von Mises, Friedrich Hayek, and Israel Kirzner, which I will refer to as the “market-process tradition.” Like Jacobs, this heterodox tradition sees social processes as the emergent, largely unplanned and self-regulating outcome of people who know a great deal about their local environment but very little about the larger system in which they are embedded, but with the right “rules of the game” can achieve a high degree of social order over time.  Like Jacobs it is concerned with how ordinary people may be able to use their own resources and resourcefulness to solve the problems they encounter in their daily lives, and how social institutions such as markets and market prices help them to do so through voluntary, often collective, action without resort to conscious central planning. Like Jacobs the market-process tradition finds little use for the concept of economic efficiency and static equilibrium and instead places greater importance on how individual incentives, entrepreneurial discovery, and innovation drive social processes and how specific social institutions interact with these forces over time.

But there are also important differences.

Whereas property rights and economic freedom are front and center to market-process economics, they are largely implicit, although no less essential, in Jacobs’s analysis. And whereas the market-process tradition has always emphasized the role of institutions in economic processes, it has only recently, like Jacobs, made the concepts of social capital, social networks, and trust a part of solving the central problem of economics: How countless strangers, operating under scarcity, human and natural diversity, and limited knowledge manage to achieve the level of social cooperation they do in market economies. Neither has the market-process approach gone into detail on the mechanisms of entrepreneurial discovery: The meaning and role of human and natural diversity in entrepreneurial development, the essential role of physical proximity, personal contact, and the design of spaces to a flourishing economic system. Finally, she and market-process economics see successful orders as those that not only solve problems, but more fundamentally those that discover, and even create, the very problems to be solved, and in so doing drive economic development and social change.

The trick to integrating these two perspectives to the benefit of each is to see that the market process and the urban process are the same phenomenon: A city is a market and a market is essentially a city.  That is what I try to do in this book.

With two outstanding exceptions, mainstream economists have mostly ignored Jacobs’s theoretical work.  One of those exceptions is Nobel-winning economist Robert Lucas, who devotes the last part of a lengthy article (pdf) on economic development that is otherwise bristling with equations to discussing (in words) insights that Jacobs has that might advance the topic.  The other is Harvard economist Edward Glaeser, who has written extensively on Jacobsian themes.  My theoretical framework, while not mainstream, and for precisely that reason, comes far closer to Jacobs’s theoretical framework – as distinct from the empirical questions she raises for Glaeser and Lucas.

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Intro to Culture of Congestion http://marketurbanism.com/2018/04/04/intro-culture-of-congestion/ http://marketurbanism.com/2018/04/04/intro-culture-of-congestion/#respond Thu, 05 Apr 2018 03:01:17 +0000 http://marketurbanism.com/?p=9748 Welcome to the first post in Culture of Congestion! I’ll be posting quotes, ideas, and short essays relating to a book I’m writing, which I might describe as “What I have learned from the economic and social theory of Jane Jacobs.”  My hope is to get thoughtful, informed feedback that will be useful in shaping the book.  […]

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Jane Jacobs

Welcome to the first post in Culture of Congestion! I’ll be posting quotes, ideas, and short essays relating to a book I’m writing, which I might describe as “What I have learned from the economic and social theory of Jane Jacobs.”  My hope is to get thoughtful, informed feedback that will be useful in shaping the book.  – Sandy Ikeda


When I asked Jane Jacobs what she believed her main intellectual contribution was, she answered without hesitation, “Economic theory!”  It’s been my experience that most of those who admire Jacobs for her trenchant writings and fierce activism against heavy handed urban planning and top-down urban design find it surprising that she thought of herself at heart as an economist.  But a glance at the titles of her books makes this rather obvious: The Economy of CitiesCities and the Wealth of Nations, and The Nature of Economies. And in her most famous book, The Death and Life of Great American Cities, she explains in intricate detail a la modern social theory what social institutions and norms enable people to discover and pursue their plans at street level, and how doing so allows the city in which they are embedded to flourish in unpredictable ways.  She understood how creative innovation – in commerce, science and technology, and culture – is central to that flourishing.  She explained, in a way that rivals or surpasses most economic theorists, how and under what conditions innovation takes place and how that tends to undermine attempts at central planning at the local level.

One of my motivations for writing this book is to make Jane Jacobs, economist, better known especially to those who already rightly admire her for the other contributions she has made as a public intellectual, and to trace her criticisms of urban planning and design and of various public and private policies, which have gained supporters across the ideological spectrum, back to a coherent social and economic framework.  My second aim then is to highlight and develop Jacobs’s socio-economic framework and to show how most (though not all of) those criticisms flow from that framework.  In short, this book is about what I have learned from Jane Jacobs about social and economic theory.

 

 

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what about singles? http://marketurbanism.com/2018/04/03/what-about-singles/ http://marketurbanism.com/2018/04/03/what-about-singles/#respond Wed, 04 Apr 2018 03:39:27 +0000 http://marketurbanism.com/?p=9745 Both smart growth supporters and sprawl apologists focus on the needs of families with children: sprawl defenders argue that only suburbia can accommodate the desires of parents, while some smart growth types argue that cities should require lots of two- and three-bedroom units downtown because families need a lot of space. But a current exhibit […]

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urban single

Both smart growth supporters and sprawl apologists focus on the needs of families with children: sprawl defenders argue that only suburbia can accommodate the desires of parents, while some smart growth types argue that cities should require lots of two- and three-bedroom units downtown because families need a lot of space.

But a current exhibit at the National Building Museum in Washington suggests that this focus is a bit misguided.  The exhibit points out that nearly 30 percent of U.S. households are singles living alone.  Judging from all the planning-media blather about families, one might think that the housing market is focused on their needs, and that 30 percent or even more of the housing stock consisted of single-sized units.

But the exhibit points out that in fact, less than 1 percent of housing units are studios, and about 12 percent are one-bedrooms.  So family-oriented units are in fact overrepresented in the housing stock.

Larger units may  not dominate downtown, but they start to dominate pretty close to downtown.  For example, when I looked at zillow.com I discovered that downtown Pittsburgh is dominated by one-bedroom units, but in zip code 15203 just south of downtown, 3/4 of housing units available for rent or sale have two or more bedrooms, including 80 out of 115 rental apartment listings.    In zip code 15202 just northeast of downtown, 34 of 60 rental apartment listings, and 71 percent of all rental listings have two or more bedrooms.

Of course, Pittsburgh is a pretty family-oriented city.  But even in Washington’s 20036 zip code (a wealthy downtown neighborhood) 1/3 of all listings are for two or more bedrooms.  And if you go just two subway stops north to Cleveland Park (zip code 20008) 108 out of 174 listings have two or more bedrooms.

What about more suburbanized, car-dominated cities?  In Houston’s downtown 77002 zip code, the majority of units are two or more bedrooms.  And in Montrose, a nice intown area a few miles from downtown, 82 percent of listings (276 out of 336) fit this mold.

So except for the closest-in parts of the most transit-heavy cities, the overwhelming majority of listings are designed for one person living alone.  Why is this?  One possible reason is that zoning locks up most of every city for single-family housing.  Another reason might be that most older housing was built when there were fewer single people, and it may take the market a long way to catch up with changing demand.

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