Market Urbanism Urbanism for Capitalists | Capitalism for Urbanists Fri, 08 Aug 2014 15:00:28 +0000 en-US hourly 1 How Land Prices Obviate the Need for Euclidean Zoning Fri, 08 Aug 2014 15:00:28 +0000 Yesterday, Reason TV released a video comparing Houston with more heavily regulated East Coast cities, explaining that Houston’s relatively lax land use regulations contribute to its housing costs that are much lower than in other large cities. While the video paints an exaggerated picture of Houston as a free market paradise in spite of its codified sprawl, Todd Krainin makes some great points about Houston’s land use tolerance. For example, the city’s tin houses that save on construction and energy costs would be illegal in many cities that have tighter restrictions on building codes.

In the video, the former mayor of Victoria, TX makes the great point that in spite of the absence of Euclidean Zoning in some Texas cities, residents don’t need to worry about heavy industry cropping up in their neighborhoods. “Economics dictates that you’re not going to put a rendering plant next to a residential subdivision,” he says. He’s referring to rent gradients that lead to land near amenities being priced at higher rates than land farther from amenities. Owners of low-value land uses don’t choose to pay high prices to be near these amenities. While there are occasionally legitimate nuisance cases in which housing and industrial uses impose externalities on each other because of their proximity, in a free market these cases would be very rare because it doesn’t make sense for industrial uses to take place on the land that people are willing to pay premium prices to live on.

While city planners make the case for Euclidean zoning by saying that they are protecting residents from living near industry, zoning often results in the exact opposite outcome. Valuable property in cities including New York and San Francisco that is zoned industrial gets surrounded by residential neighborhoods over time as the city grows. Planners’ inability to keep codes up to date with evolving cities means regulations require industrial uses adjacent to residential ones, mandating inefficient land use and creating industrial blight near homes. In Washington, DC, recent rezoning of industrial uses near Union Station and Navy Yard has created rapid fire gentrification. Without zoning, industrial uses would have gradually move from these valuable sites, allowing for housing and retail to enter these neighborhoods slowly allowing for filtering prices over time.

In Bushwick, warehouses abut apartment buildings.  Image via Real Estate Weekly.

In Bushwick, warehouses abut apartment buildings. Image via Real Estate Weekly.

In Los Angeles, the problem of cementing the location of industrial uses has reached an extreme. Torrance, CA, a city where the median home sells for over $600,000, is home to an oil refinery, located about two and a half miles from the coast. A few miles northwest in El Segundo, where the median home is worth $860,000, a Chevron refinery occupies 1,000 acres of beachfront property. This isn’t because these companies enjoys refining oil surrounded by residential neighborhoods or find it particularly profitable to do so, but rather because its unlikely that they could ever receive the necessary approvals to open a new refinery elsewhere.

In some cases, such as developing world mega cities, it’s more likely that industrial uses would locate adjacent to housing than it is in the United States because of different transportation systems. In these cases, people with progressive attitudes might argue that zoning would protect residents of cities like Karachi, and Lagos from living near polluting industry. But even in these cases, using zoning to prevent the market from allocating land use is likely to hurt cities’ most disadvantaged residents rather than making them better off.

True, developing world residents accept risks when they live near factories, including the small potential for a catastrophe such as a factory fire in a residential neighborhood. However everyone accepts risk in their daily lives in their efforts to make a living and pursue happiness. Those with low-incomes in the U.S. and even more so in the developing world accept greater risks than those with higher incomes because risk reduction is a normal good whose demand rises with income. Individuals must make risk-risk tradeoffs in their lives, including the decision to live near a factory in exchange for shortening a difficult and dangerous commutes or in turn for saving money on housing to have more resources for other essentials.

In the United States, legally separating industrial uses from residential land uses at time zero is unlikely to result in a significant change from a market outcome because owners of industrial property will want to locate on cheap land far from where people live. In those cases where industry and residents choose to locate next to each other, it’s worth considering that the people involved are making the best choices given their circumstances. Given that cities grow and evolve, it’s likely that industrial-zoned land will end up adjacent to higher value uses, leading regulations to achieve the opposite of their intent. In those rare cases when economics do not naturally separate residential from noxious uses, the court system is well-equipped to mediate cases as they arise.

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Glamour in streetscapes Thu, 24 Jul 2014 19:28:38 +0000 A while ago I attended an Urban Land Institute event on development trends in Fairfax’s Mosaic District. A presenter from the retail developer EDENS described their strategy of adding “sidewalk jewelry,” a design technique used to entice shoppers to travel down sidewalks between stores. Having never heard the term before, it nonetheless stuck with me as I thought about retail developments that manage to create relatively lively pedestrian environments from the top down.

At Mosaic District, this street jewelry takes the form of signage designed to engage pedestrians, fountains, and planters:

Mosaic 1


It’s certainly more aesthetically pleasing and engaging to pedestrians than the average strip center. While the typical strip mall has a parking lot for a set back, Mosaic District has a parking garage that allows the rest of the center to be more pedestrian-scaled. With the “sidewalk jewelry” framework in mind, it’s easy to see that many retail developers have embraced this trend toward focusing on the pedestrian experience once shoppers have left their cars at the center’s periphery. While Easton Town Center in Columbus has many of the same stores as any major mall, it’s outdoor shopping environment is distinctly different, attempting to emulate the “town center” in its name:

Easton town center

For shoppers who value retail ambience, these “lifestyle center” sidewalks provide a much nicer atmosphere relative to more dated strip center or shopping mall designs, but they can’t compare to environments where storefront decorations developed more organically. A recent trip to Quebec City reminded me of the sidewalk jewelry term, but there the visual treats that lure pedestrians down the sidewalk have much more texture than the shopping centers’ above because they are the result of an emergent order among the street’s businesses and residents rather than one developer’s vision:


This type of street meets social critic Virginia Postrel’s framework of glamour. In her book The Power of Glamour, she explains that glamour is something that transcends our everyday life and transports us to better, different circumstances. She explains that shapes that evoke mystery carry glamour because they create mystery at what lies beyond. The fortress walls surrounding the Quebec City add a sort of magic to the city’s charming streets:


Quebec City’s glamour makes it appealing to tourists, but cities that are home to more productive innovation have streets with even more glamour, such as this Tokyo scene where each sign invites the pedestrian to find out what’s inside the business:


As Postrel explains, this glamour “invites us into a world without giving us a completely clear picture.” While people may dismiss the importance of glamour in cities as a frivolous quality, Postrel explains the importance of glamour in our lives:

Glamour is all about hope and change. It lifts us out of everyday experience and makes our desires seem attainable. Depending on the audience, that feeling may provide momentary pleasure or life-altering inspiration.

[. . .]

Glamour can, of course, sell evening gowns, vacation packages, and luxury kitchens. But it can also promote moon shots and “green jobs,” urban renewal schemes and military action. (The “glamour of battle” long preceded the glamour of Hollywood.) Californians once found freeways glamorous; today they thrill to promises of high-speed rail. “Terror is glamour,” said Salman Rushdie in a 2006 interview, identifying the inspiration of jihadi terrorists. New Soviet Man was a glamorous concept. So is the American Dream.

Glamour, in short, is serious stuff. It can alter life plans, even change history. And as a broad psychological phenomenon, it holds intrinsic interest. While rarely addressed in C-SPAN discussions, glamour is the sort of topic to which such 18th-century titans as Adam Smith and David Hume often turned their attention. It spans culture and commerce, psychology and art.

Land use restrictions do a lot to eliminate glamour from urban development through setback requirements, parking requirements, and height limits. Rules of the game that favor large-scale development over the environment that’s possible with the chaos of many small developments prevent the elements of surprise that glamorous streets have. Today’s retail developers are attempting to add glamour back into their products with sidewalk jewelry, but no amount of attention to design on their part will match the level of intrigue of the streetscapes above. Viewed through Postrel’s lens, rules that remove glamour from cities aren’t just bad for the pedestrian experience, but they also dampen what can be an important source of inspiration in our lives. If glamour plays a role in driving us to action, it may be one factor that encourages people to pursue their work in the place where they will be most productive. Rules that eliminate glamour from a city’s physical environment can ultimately reduce its contribution to economic progress.


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Parking is not a public good Thu, 03 Jul 2014 21:07:10 +0000 Writers at Salon, Slate, and Time have criticized new San Francisco-based apps that allow users to purchase access to a parking spot as another driver is leaving it. The apps MonkeyParking, Sweetch, and ParkModo provide a platform for drivers to let others know when they’re leaving a spot, and reserve the spot until the another user bidding on the spot arrives to pull in. As of last week, the future of these apps is unknown since San Francisco issued a cease and desist order based on the city’s rule against auctioning or leasing public parking spots. All three writers express outrage that the apps’ creators and users are profiting off of government-owned parking spots. At Salon, Andrew Leonard writes:

Monkey Parking’s solution intended to generate profit off of a public good by rewarding those who are able to pay — and shutting out the less affluent. 

One problem with this line of reasoning is that parking is clearly not a public good. It is both perfectly rivalrous and easily excludable. Unlike a public good, the price system provides the right incentives for suppliers to provide the optimal amount of parking based on consumers’ willingness to pay. While Leonard uses the term public good, he may mean simply a good that the government provides, and he argues that entrepreneurs should not be permitted to profit from these public services. While this argument provokes a populist sense of unfairness, Monkey Parking should be evaluated against the current problem of under-priced curb parking rather than against the assumption that city governments are currently pricing curb pricing appropriately.

City governments systematically undercharge for street parking, especially in cities like San Francisco where land is very valuable. These apps are able to profit because the city charges prices for parking below the level that drivers are willing to pay. Without an app that lets drivers pay for the knowledge of parking spot availability, parking spots are allocated by drivers’ time spent driving around and looking for a spot.

Curbside parking spots, typically the most conveniently located and most accessible spots on a block, are often priced lower than nearby garage spots. Because these spots are desirable, they are often full. Drivers circle their destinations looking for available curb spots, paying for the cost of the spot with their time and wasted gas rather than in dollars as they likely would in a free market. Donald Shoup, the expert on all things parking, estimates that 30% of downtown urban traffic congestion is caused by drivers who are cruising for parking. In just one Los Angeles neighborhood, Shoup estimates that drivers waste 47,000 gallons of gas, or 730 tons of carbon annually just looking for parking spots. The cost of the cruising phenomenon in terms of drivers’ time and in greenhouse gases across cities and around the world is clearly immense.

Slate’s Will Oremus argues that allocating parking spaces based on drivers’ willingness to pay for them is regressive:

As if it weren’t enough that middle-class San Franciscans are getting squeezed out of their housing, now they get to worry about some tech tycoon outbidding them for their parking spot. These are public, metered parking spaces, mind you, paid for by taxpayers.

Keeping the price of parking below the market-clearing price is not clearly beneficial to low- or middle-income people as these authors assert. If a low-income person is running late for an important appointment or has a heavy load to carry to his destination, he will likely be thankful for the opportunity to pay a premium for a conveniently located, available spot. The app allows people to trade money for time and convenience, and people of all income levels may or may not want to make this tradeoff in a given situation. Under-priced curbside parking is a subsidy to all drivers, regardless of their income. In San Francisco, low-income residents are less likely to have access to cars than high-income residents, so providing under-priced parking likely subsidizes high-income residents more than low-income residents.

Rather than prohibiting these parking apps, San Francisco policymakers have the opportunity to make them irrelevant. Their program SFPark is already implementing reforms based on Shoup’s recommendations. 8,200 of the city’s curbside parking spots have sensors that indicate whether or not they are occupied. These sensors provide data on when parking spots are occupied, and the meters for these spots are set with the goal of maintaining 15% availability to eliminate cruising. The prices are capped at $6 per hour, so they may not reach levels high enough to maintain 15% availability, creating an opportunity for MonkeyParking to allocate spaces based on price.


Image via San Francisco Examiner

By expanding SFPark to more of the city’s curbside spots and allowing parking prices to go as high as necessary to maintain 15% availability, San Francisco policymakers would capture the parking apps’ potential revenues for the city. For those concerned that charging market-clearing prices for parking hurts low-income residents, this new revenue source could be used to provide a tax credit for low-income people. However, it’s unclear to me why the price of parking should be artificially low to benefit low-income people as opposed to all other goods. Allocating parking based on pricing rather than by queuing allows people to plan their travel based on the true cost of their trip. Setting parking prices at a market-clearing rate would create an incentive for people of all income levels to consider taking transit, biking, or walking to their destination, and would allow anyone to have the availability of conveniently located parking spots at their destination when the it’s worth the price to them.

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DC streetcar: Worse than nothing Thu, 26 Jun 2014 15:13:31 +0000 On Tuesday, DC’s city council passed a tax reform package that will cut funding for future streetcar construction. These cuts come as the H Street streetcar delays continue to mount, and much of the commentary supporting the streetcar has shifted from touting its transportation benefits to its economic development role. As Stephen has explained, the benefits of streetcar over bus depend heavily on streetcars having dedicated lanes, which most of DC’s streetcars wouldn’t have.

Earlier this spring, I was in a bike accident that cemented my opposition to DC’s streetcar. Because the streetcar tracks cover the right two-thirds of H Street’s right-hand lanes, bicyclists typically ride between the two tracks. This creates a situation in which the sudden need to swerve or a brief loss of concentration puts cyclists at a risk of catching their front tire in the track, causing an over-the-handlebars accident when the front wheel comes to a sudden stop. In Toronto, streetcar tracks are a factor in nearly one-third of serious bicycle accidents. While I can say I’ll now go to great lengths to avoid riding on H Street, DC’s lack of good east-west bike routes make it unrealistic to expect all cyclists to avoid the streetcar tracks. Avoiding tracks will be much more difficult for cyclists under DDOT’s plan to eventually construct 22 miles of tracks.

Aside from creating a hazard for cyclists, this streetcar will only provide effective transportation for people visiting H Street retail destinations from the adjacent residential neighborhoods. It does not connect residential neighborhoods to job centers. While some have argued that it’s designed to serve tourists rather than District residents, the streetcar line doesn’t pass by any sightseeing, I don’t think that H Street’s retail is a common destination for tourists. Passengers using the streetcar to travel east from Union Station have to navigate a large parking garage to board the streetcar in the middle of a pedestrian-hostile overpass.

Passengers coming from Union Station will board the streetcar on an overpass outside of a parking bride. Image via Fulertography.

Passengers coming from Union Station will board the streetcar on an overpass next to a parking garage. Image via Fullertography.

Its poorly planned route will, however, cause delays for bus riders and drivers as the streetcar comes to a stop behind cars turning right, cars that don’t park close enough to the curb, or inevitable breakdowns. The H Street corridor has the one of the city’s busiest bus routes with an average of over 15,000 riders each weekday. Unlike the streetcar, the X1, X2, and X9 buses actually connect residential neighborhood’s to job centers and they serve passengers who live farther east in Anacostia. The streetcar will reduce the effectiveness of these valuable routes by adding to delays and reducing frequency as a result.

While streetcar construction has coincided with rapid-fire gentrification on the H Street corridor, those who attribute these changes to the streetcar’s presence discount other policies and trends that happened simultaneously. In 2006, then mayor Fenty implemented the Great Streets Initiative, a grant program that provides up to $85,000 to small businesses businesses renovating space on corridors designated for the program. H Street was the first corridor designated as part of the Great Streets Initiative and the only corridor eligible for small business grants until 2013 when the program was expanded to include several additional corridors. explains:

DMPED [Office of the Deputy Mayor for Planning and Economic Development]  received an initial capital authorization of $16.6 million to provide development assistance, multiple property owner grants, technical assistance, loans and credit enhancements to projects like those happening on H Street. DC Council also authorized DMPED to issue up to $95 million in tax increment finance (“TIF”) notes or bonds to support retail projects within six retail priority areas along the initial GSI corridors. Up to $25 million out of the $95 million was authorized on H Street NE.

Staff at DMPED were not able to provide data on grant recipients before 2012, but for 2012 to the present, they provided data for each grant issued. Since 2012, H Street businesses have received nearly $2 million in grants for facade improvements and renovations. This is about a third of all of the grant money that the program has awarded in that time period. It’s clear that between 2006 and 2012 H Street businesses received millions of economic development spending, including a $5 million subsidy for Giant supermarket. These grants factored into dozens of entrepreneurs’ decisions to open businesses on the H Street corridor rather than another neighborhood in the city.

Furthermore, the pattern of redevelopment in the Atlas District suggests that these grants may have played a more important role than the streetcar. Typically, neighborhoods experience residential gentrification first, and the commercial gentrification bringing new shops and restaurants follows. As developers sometimes say, “retail follows rooftops.” However, the Atlas District experienced the reverse order. The bars and restaurants on H Street didn’t spring up to serve a new affluent neighborhood population or people moving to live near the streetcar line; rather a dedicated shuttle bus from Chinatown brought bar patrons from other neighborhoods in the city out to H Street for the first years that new bars were opened their doors on the corridor. In the 20002 zip code, home values held fairly steady from 2009 to 2012, indicating that demand for residential property didn’t surge until well after the commercial corridor began to gentrify. Home values in this zip code closely follow the city’s trend from 2005 to the present, whereas other zip codes, like 20009, show home price spikes that can more likely be attributed to a change in the neighborhood’s desirability, rather than the city’s general growth.

Of course, H Street’s gentrification is far from an objective policy success. The Great Streets Initiative grants that encouraged building renovations were tailored to benefit new businesses coming to the neighborhood, rather than existing businesses that served long-time residents. But even given the questionable policy goal of gentrification, it’s unclear that the streetcar can take credit for economic development. The streetcar will make commuting more difficult for X bus riders, and if tourists want to take the streetcar, they’ll have a difficult time reaching its western terminus from Union Station. Still not carrying passengers five years after construction began, the streetcar is a very expensive bike trap.

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How Affordable Housing Policies Backfire Thu, 29 May 2014 18:31:12 +0000 Affordable housing policies have a long history of hurting the very people they are said to help. Past decades’ practices of building Corbusian public housing that concentrates low-income people in environments that support crime or pursuing “slum clearance” to eliminate housing deemed to be substandard have largely been abandoned by housing affordability advocates for the obvious harm that they cause stated beneficiaries. While rent control remains an important feature of the housing market in New York and San Francisco, even Bill de Blasio’s deputy mayor acknowledges the negative consequences of strong rent control policies. In the U.S. and abroad, politicians and pundits are beginning to vocalize the fact that maintaining and improving housing affordability requires housing supply to increase in response to demand increases.

While support for older housing affordability policies has dissipated, the same isn’t true of inclusionary zoning.  From New York to California, housing affordability advocates tout IZ as a cornerstone of successful  housing policy. IZ has emerged as the affordable housing policy of choice because it has the benefit of supporting socioeconomic diversity, and its costs are opaque and dispersed over many people. However, IZ has several key downsides including these hidden costs and a failure to meaningfully address housing affordability for a significant number of people. Shaila Dewan of the New York Times captures the strangeness of IZ’s popularity:

New York needs more than 300,000 units by 2030. By contrast, inclusionary zoning, a celebrated policy solution that requires developers to set aside units for working and low-income families, has created a measly 2,800 affordable apartments in New York since 2005.

DC’s City Center includes 92 affordable units. Image via Foster and Partners.

Montgomery County, a Maryland suburb of DC,  has perhaps the most well-established IZ policy in the country. After 30 years, the program has produced about 13,000 units. Montgomery County is home to over one million people, 20 percent of whom have a household income of less than $43,000 annually. While this is an extraordinarily high income distribution relative to the rest of the country, this makes the county’s median apartment rental of nearly $2,300 out of reach for many more people than even an aggressive IZ policy can serve.

While Montgomery County’s IZ housing does not reach a large percent of its population, it has provided many more units than other cities’ programs have. Washington, DC’s IZ law was passed in 2006, requiring developers to set aside 8-10% of units as affordable in all new projects with more than 10 units. As of the most recent 2012 report, DC’s IZ program has yet to reach a single beneficiary. The IZ units that have made it to market are sitting empty. This is in part because IZ units, priced to be affordable to those making between 50% and 80% of the Area Median Income, are not the most cost effective choice for many people in this income range, potential beneficiaries of owner-occupied IZ units may not be able to qualify for a mortgage. IZ units tend to be one- or two-bedroom apartments. Low- and moderate-income DC residents may be able to find housing that is much more affordable than what IZ provides by living in a larger apartment with a roommate(s), in a group house, or with family. By attaching these affordable units to new, often luxury buildings, IZ siphons affordable housing resources to the type of housing where it will buy the least.

Evidence on the benefits that mixed-income housing provides for low-income people is mixed, but it’s hard to deny that inclusionary zoning beneficiaries win a lottery. They live in new construction in desirable neighborhoods, housing that would cost several times as much at the market rate. However, IZ’s effects are not limited to beneficiaries, and its costs are not fully borne by developers. Because developers will lose money on the IZ units they build, this cost has to be made up in the market rate units in order for the project to go forward. This adds to construction costs and also incentivizes luxury units that can better absorb the cost of the IZ units relative to more affordable construction. While providing affordable housing to a few lucky low-income people, IZ also makes housing less affordable for everyone who doesn’t receive the benefit by reducing housing supply and skewing the market toward luxury housing that can subsidize the affordable units.

IZ appears free to everyone except developers because it’s not paid for out of city budgets. But ultimately housing consumers share in the cost of IZ units through a hidden tax. By making new construction more expensive, IZ also reduces the rate at which the prices of older or less desirable housing filters down to the point that it becomes affordable to low- and middle-income residents. Putting affordable housing in new construction ensures that it will benefit fewer people than the same amount of resources otherwise could. IZ supporters emphasize the importance of neighborhoods that are socioeconomically diverse but ignore the opportunity cost. Low-income people may be well-served by putting resources toward living in a diverse neighborhood, but this competes against many other places their resources could go, including investing in a business, pursuing education, or prioritizing nutritious food.

As economist Ben Powell explains, IZ can be designed not to have an effect on market-rate housing prices if developers are allowed to voluntarily trade the provision of IZ units for density bonuses. In that case the bonuses must be high enough to offset the cost of the below-cost units. However, as Stephen has pointed out, IZ creates an affordable housing lobby that opposes upzoning without affordability requirements. Eliminating IZ would put all housing affordability advocates on the same team. The same amount of resources currently providing for IZ units could be levied as a transparent tax and transferred to low-income people as cash rather than as luxury housing. This would also allow for resources to be distributed based on need, rather than giving a few households a jackpot.

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Join us in Brooklyn for Jane’s Walk 2014 Thu, 01 May 2014 20:03:12 +0000 In addition to Sandy’s traditional walks in Brooklyn Heights, I will be hosting a walk through Downtown Brooklyn preceding Sandy’s Sunday walk.

Here’s a link to my walk, although they mistakenly listed it for Saturday morning instead of Sunday morning.  Hopefully, they can fix this, because I can’t do Saturday morning!! After my Sunday walk, and a lunch break, I’ll be joining Sandy Ikeda’s annual walk through Brooklyn Heights at noon.  Market Urbanists often gather for a drink after Sandy’s walk.  Sandy will also be giving a Saturday walk at 5pm.

See you Sunday morning at 9am in the Metrotech Commons – please do not come Saturday.  I’m a very tall guy, and I’ll wear a Brooklyn Basketball hat.

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Market Urbanist Meetup [Manhattan Edition] March 22, 2014 Wed, 12 Mar 2014 23:50:35 +0000

Meet us at Herald Square at 3pm by the Statue

Market Urbanists will be gathering again in New York City for an informal meet up.  Last year, we explored the fascinating ethnic neighborhoods of Williamsburg, Brooklyn.  This year, we’ll meet in Midtown Manhattan, where some ethnic enclaves are nestled amongst towers and bustling streets.

Come join a wide cross-section of urbanists in attendance:  architects, journalists, economists, real estate developers, planners, and students.  Anthony Ling of Rendering Freedom set up a Facebook event for the meetup.  We’ll meet at 3pm in Herald Square (right in front of the clock tower on W 35th St.)  Please sign up on Facebook, and tell your friends.  (Anthony also set up a Market Urbanism Facebook group to help us connect to fellow Market Urbanists)

See you then!
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Urbanism without government Fri, 07 Mar 2014 18:19:52 +0000 Asking, “But who will build the roads?” is a cliched response to proposals for a more libertarian political system. However, it leads to the interesting historical question of “Who has built the roads in anarchic societies?” Colonial America provides a few examples that answer this question. Perhaps the best known example of anarchism in American history was in Rhode Island, or “Rogue’s Island,” founded by Baptists fleeing Massachusetts. The stateless Baptists founded the cities of Portsmouth and Warwick.

Unlike the Baptists, William Penn didn’t intend to create an anarchic colony, but Pennsylvania was, in fact, without a government from 1684 to 1691 as evidenced by Penn’s failure to successfully levy any taxes during that time. It’s difficult to know much about street building from this time period in part because of how much time has passed and in part because, as Murray Rothbard writes, “The lack of recordkeeping in stateless societies — since only government officials seem to have the time, energy, and resources to devote to such activities — produce a tendency toward a governmental bias in the working methods of historians.” However, we do know that Philadelphia’s neighborhoods near the Delaware River were growing during this time.

One of the country’s oldest continually occupied streets is Philadelphia’s Elfreth’s Alley. It was dedicated in 1702, shortly after this period of complete anarchy and served  as a route to connect local merchants’ property with the already thriving Second Street. As the society dedicated to the alley’s preservation writes:

Elfreth’s Alley — popularly known as “Our nation’s oldest residential street” – dates back to the first days of the eighteenth century. Twenty years after William Penn founded Pennsylvania and established Philadelphia as its capital, the town had grown into a thriving, prosperous mercantile center on the banks of the Delaware River.

Philadelphians had abandoned Penn’s plan for a “greene countrie towne” and instead created a cityscape similar to what they remembered in England. Wharves stretched out into the river, welcoming ships from around the world. Shops, taverns, and homes crowded the area along the river. Philadelphians made and sold items essential to life in the New World and to the trade that was a part of their daily lives.

Two of these colonial craftsmen, blacksmiths John Gilbert and Arthur Wells, owned the land where Elfreth’s Alley now sits. In 1702, each man gave up a portion of his land to create an alleyway along their property line that connected their smithies near the river with Second Street, one block away. By that date, Second was a major north-south road, connecting Philadelphia with towns north and west of the city and the frontier beyond.

Photo by C. Ridgeway

Photo by C. Ridgeway

Gilbert and Wells donated their land both to benefit their businesses and to improve the city’s transportation network in keeping with the Quaker tradition of voluntarism. Their actions demonstrate the power of cooperation for mutual gain, but it’s also notable that streets built with donated land are likely to be narrow, as Elfreth’s Alley is. As the article explains that William Penn envisioned Pennsylvania as a “countrie towne,” but without the ability to raise any taxes needed to enforce his vision, he couldn’t prevent Pennsylvania residents from developing the sort of dense and mixed-use development that supported their growing industries in Philadelphia.

Victorian England provides another example of rapid urban growth under very limited government. Decades after the construction of Elfreth’s Alley, urban development absent any city planning, government infrastructure, or building codes swept across London and other English cities. Neighborhoods including the West End and Nottingham were developed during this period of hands-off government policy, relying on the private sector for providing all infrastructure, from streets to streetlights to drainage.

In both cases of laissez- faire urban development, we see very narrow streets, as landowners are making the trade between providing easements for accessibility and developing land for profit. Unlike colonial Philadelphia’s period of total anarchy, London had a system of Private Acts, which required developers to seek permission from Parliament to implement any significant land use changes. After development was in place, some neighborhoods used covenants to enforce upkeep of common goods such as lighting and even to enforce design standards for builders. In his chapter in The Voluntary CityStephen Davies explains that landowners did not place covenants on all land and that the stringency of covenants varied widely. Because covenants tended to increase both the quality and price of housing, this variation allowed builders to serve both low- and middle-income residents, depending on where they built:

Developers were able to tailor the extent of their providing “public goods” via covenant to the nature and scope of local demand, as well as account for other factors such as land and building costs. This is in marked contrast to the rigidity and fixity of state attempts to supply these goods through public planning, zoning laws, and the like. The flexibility also extended to the enforcement of covenants. Landlords and developers would often not enforce the building clause in a lease when demand for land was slack, as long as the rent was paid.

While colonial Philadelphia and Victorian London saw road building under different legal institutions, both cases demonstrate that urban infrastructure can be provided without government. Perhaps the free market would never create the interstate highway system, but it’s proven itself capable of facilitating the creation of charming, functional streets that endure centuries.





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