LI Dems to councilman: oppose density so we can get reelected

Earlier today I was reading this article about “cupcake moms” at the local PTA mobilizing online against TOD in Huntington Station, a hamlet in Long Island, and while it looked like your average suburban NIMBY story, this part of the Long Island Press story jumped out at me:

[Supervisor] Petrone had reportedly wanted this revitalization project for the former urban renewal area as his legacy to the town, but he won’t get it now. Instead he was reportedly blindsided by Cuthbertson’s switch last Thursday.

Sources told the Press that Cuthbertson withdrew his support because Huntington Democratic Party insiders wanted to take the housing issue off the table so Republicans couldn’t use it against the Democratic incumbents in the elections next year. Councilwoman Susan Berland, who had straddled the fence for months, finally came out against the AvalonBay proposal this summer. She wanted less density.

I guess we can count this as a point in favor of Matt Yglesias’ suggestion to isolate local elections from party politics by making the races non-partisan.

Another part of the story that I found interesting was all the people hearkening back to their childhoods and their parents’ motivations for moving out of NYC to Long Island and using these as excuses not to let developers build on this site. This is pretty ironic, considering that the development was to be built on a plot of land that was once occupied by housing that was razed in the 1950s in an urban renewal scheme.

I’m a few months late to all this, but it was apparently an important battle in the broader war over land use in Long Island – so much so that there was a post mortem held by a Long Island smart growth group that Newsday covered here and here. The articles are, unfortunately, well gated, but if there are any NYC-area Optimum Online or Newsday subscribers out there, please e-mail me (smithsj[at]gmail[dot]com), because I’d love to learn more about this.

Anybody know of any other local land use decisions that were influenced by party politics?

Edit: Not sure how I forgot to include this since it was the whole reason I chose to post it, but the affordable housing is mandated by local inclusionary zoning – no developer would voluntarily seek out below-market rents. So essentially the developer was forced to include “affordable” units, which then became the very reason that the community rejected the proposal.

Even Midtown Manhattan not immune to anti-density NIMBYism

by Stephen Smith

In general, I think of Manhattan below Central Park as perhaps the freest place in America in terms of land use restrictions. There are no minimum parking regulations, zoning variances are relatively easy to get, and FAR restrictions are relatively generous. Historical preservation designations sometimes limit redevelopment, but other than that, developers have a relatively free hand to…develop.

That is, unless you’re talking about building a tall skyscraper within 17 blocks of the Empire State Building:

The owners of the Empire State Building, Anthony E. and Peter L. Malkin, even want a 17-block no-go zone surrounding their 1,250-foot tall tower. This would prevent Vornado Realty Trust, which wants to erect the new building on Seventh Avenue, or any other developer, from putting up a similarly oversize building in the zone.

The City Planning Commission has already approved Vornado’s plan for a tower, called 15 Penn Plaza, opposite Pennsylvania Station. It would be 56 percent larger than what would ordinarily be allowed, in keeping with the city’s desire to promote high-density development close to transit hubs. But Community Board 5, whose district includes the area, did not approve. A committee at the board said the developer had not provided a rationale for such a large zoning bonus, especially since it did not have a tenant and might not build for years.

While we at Market Urbanism are generally not fans of tying density bonuses to private improvement of public infrastructure, we should note that part of the quid-pro-quo for the government allowing the building is that the developer make improvements to Penn Station “worth more than $100 million,” which would be lost if the project is not approved.

(HT: Infrastructurist)

Edit: I may have overstated the freeness of Manhattan’s land use situation – see the comments section for a more nuanced and enlightened discussion of the barriers to development in America’s densest neighborhoods.

Edit II: Reason has prevailed, and the project was approved.

Taxing Land Speculation

Bill Hudnut at the Urban Land Institute wrote a post that attracted some attention at Austin Contrarian and Overhead Wire. Hudnut discusses a different approach to taxing land:

How about restructuring the property tax across America to install a two-tiered system? More tax on those horizontal pieces of empty land and asphalt, less on the buildings. That is, reduce the tax rate on homes and other improvements, and substantially increase the rate on the site value. I think such a system would induce more compact development and more infill work.

It sure would induce more development.

Higher taxes on the land, lower taxes on the building, discourages a land holder from leaving his land fallow and speculating on its increased value, and conversely, encourages improvements on the land and redevelopment. The monograph used Sydney Australia as a case study, but its general point, that a site value tax system puts “pressure on owners to sell their property for redevelopment if they cannot or will not redevelop it themselves.”

Note that ULI is an organization primarily of real estate developers, investors, and related professions. (I am a member.) So, I can see why developers would favor a mechanism that would force more land into development.

Overall, this type of scheme will help drive development in the short run, but be harmful in the long-run.  By encouraging development in the present by discouraging land speculation, we can expect a few consequences:

  • Speculators play an important role in the land market, even if we don’t like the surface parking lots they often operate on their land.  Speculators essentially hold the land until development is optimal for the site, and all sites cannot be optimally built at once. Discouraging speculation drives the land into the hands of developers at cheaper prices than current market prices.
  • At the same time in reaction to the new tax regime, all the new developers will compete for users of the space they are building on the vacant land. This either means they’ll build smaller in anticipation of the glut of new development, or vacancy rates will be much higher.
  • The new supply of space will likely serve to lower rents and condo prices, but this will only be temporary as available development sites quickly disappear.
  • Had speculators been forced to build on their lots, less dense, and less optimal buildings would be in their place, and a future developer faces the opportunity cost of demolishing that building. This would be similar to developing in New York, where vacant parcels are very rare, compared with developing in Chicago where developable parcels are relatively plentiful.  There is a huge affordability gap between New York and Chicago, which can be partially attributed the the availability of development sites.
  • It will harm the diversity of building age that Jane Jacobs claims as a key ingredient that makes for great cities. The stock of buildings will be disproportionately represented by buildings built shortly after the tax scheme is enacted. As new development occurs, affluent people will be attracted to the developing areas. As these buildings depreciate, the more affluent will relocate. Without enough diversity, over a long period of time a neighborhood will be predominantly lower-class residents.
  • This under-developed scenario will breed NIMBYism over the years, as the new development will be of lower density than under current taxes.  Residents will likely be resistant to future higher density development of sites to meet market demand.  However, new development would necessarily involve demolition of existing lower-density buildings, which is costly from an opportunity cost point of view, as well as community relations.

I do favor some regional, state, or other tax based upon acreage. (if offsetting income tax or other productivity-stifling taxes)  However, I would implement the tax to discourage sprawl, not to discourage speculation.  Thus, I would tax each acre equally, whether developed or vacant.  Encouraging development of vacant land may only serve to encourage lower density development as a “tax payer”, as opposed to a more optimal use of the land. As long as density isn’t overly restricted, speculation can allow for higher density, and more optimal land use in the long run.

By burdening speculators, we should expect speculation to shift to under-optimal “development” like this:

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The Story of I’On: Struggles of a New Urbanist Project

43 John Galt Way

43 John Galt Way

27 Mises Street

27 Mises Street

I recently googled upon a post at a blog called “Rub-a-Dub” that mentioned a land development project in Mount Pleasant, SC called I’On

I imagine the developers of the I’On “Traditional Neighborhood Development” (TND) community are sympathetic with Market Urbanism, as they named streets after John Galt (of Ayn Rand’s Atlas Shrugged), free-market economists Ludwig Von Mises and Thomas Sowell, as well as urbanist writer Jane Jacobs. (ironically, Jane Jacobs Street doesn’t have sidewalks yet according to google street views)


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Who says New Urbanists and free markets can’t mix?  (well, I’m sure we all can name at least one such person…)

What I found interesting was the story of the development shared in the comments of the post by Vince Graham, Founder and President of the development company.  The story really conveyes the struggles developers go through to get projects through the approval process; especially when the standard 20th century, auto-centric layout is being challenged by innovative development solutions.

The reason why there is only single family homes and a limited amount of commercial space in the neighborhood is due to unfortunate compromises necessary to get the neighborhood approved through the arduous political process. Here is a summary:

A Summary of the Political Background and Permitting History for I’On.

    Background:

The traditional walking neighborhood of I’On is located on a 243-acre infill site in Mt. Pleasant, SC located 5 miles from Charleston’s historic district and 3 miles from the Old Village of Mt. Pleasant. The site is surrounded by conventional subdivision development of the 1950’s, 60’s, 70’s, and 80’s. Approximately 60% of I’On’s acreage was originally comprised of former agricultural fields, 30% was 30-40 year old hard wood growth, and 10% took the form of three man made lakes. The design workshop for I’On took place in May of 1995. I’On received approval in March of 1997, and ground was broken on infrastructure in June of 1997, and on the first house in March of 1998. As of January 1, 2003, approximately 300 homes were occupied in I’On, with another 60 homes or so under construction. 19,000 s.f. of commercial space is complete and occupied with another 8,000 s.f. under construction. Two civic buildings have also been completed.

Mt. Pleasant is a bedroom community of Charleston. It has a population of approximately 50,000 people spread over 26,000 acres (roughly the size of Hilton Head Island or Nantucket Island). In 1992, well in advance of the initial design workshop for I’On, the Town Council of Mt. Pleasant unanimously adopted a town-wide Master Plan incorporating Traditional Neighborhood Design (TND) principles. This plan, known as the Redmon-Johnson Master Plan, praised the Old Village of Mt. Pleasant with its mix of civic, commercial, and residential uses as the development model to emulate. It even recognized the site upon which I’On was to be built as an ideal location for a TND. In addition, the Town had adopted and unanimously approved a Strategic Plan in 1994, which also encouraged future development to take the form of compact, traditional neighborhood like the Old Village of Mt. Pleasant. Unfortunately, the Town’s zoning had never been modified to make it consistent with the Master Plan or the Strategic Plan. The underlying zoning for the site was “R-1” specifying 10,000 s.f. minimum lot sizes with accompanying requirements of conventional development (minimum lot widths, setbacks, etc). Thus, to develop the property as a TND required a zoning change to “Planned Development”.

The Founders retained Dover Kohl and DPZ as land planners for the neighborhood. The Founders led the combined firms on a tour of the best models of urbanism in the region including Savannah and Charleston, as well as the historic areas of lesser known coastal towns like Beaufort, Rockville, and the Old Village of Mt. Pleasant. In addition, the group toured Newpoint, a three-year-old TND the Founders were currently building in Beaufort.

Over the next seven days, the group worked to develop a design code and plan comprising 800 single-family lots, 440 multi-family units, 90,000 s.f. of commercial space, and a number of civic sites. Andres Duany presented the plan to a standing room only crowd at the Mt. Pleasant Town Council chambers in mid-May of 1995.

The Founders spent the next few months working with members of DPZ and Dover Kohl to fine tune the plan and code to ready them for rezoning application submission. The rezoning application was submitted in August, 1995. After several public meetings, it received a 7-2 recommendation for approval by the Mt. Pleasant Planning Board. Prior to being reviewed by Mt. Pleasant’s Town Council, compromises were made to the rezoning application reducing single-family lots to 730, and multi-family units to 120. These 850 units worked out to a density of 3.5 units/acre. 3.5 units/acre met the Town’s definition of “low density” [Note: this definition has since been revised downward to 2.8 units/acre.]. Despite more citizens speaking in favor of the project than in opposition at the Mt. Pleasant Town Council meeting held in December of 1995, the application was rejected by a 5-4 vote.

Among other concerns, several residents from the adjacent subdivisions of Hobcaw Point, Molasses Creek, and Heron Pointe feared that the smaller lots would depress their property values, the proposed roundabout would be a “circle of death”, some of the planned streets would be too narrow for fire equipment to use, the parks and apartments would attract “undesirables”, and traffic from I’On would overwhelm Mathis Ferry Road.

After much debate, the Founders elected to continue with option payments to purchase the property. They worked to decipher what kind of plan would be supported by those council members who voted against the application. They also worked with planners to make further compromises to the plan such as removing the multi-family component, reducing the number of proposed thoroughfare types from 11 to 4, reducing commercial from 90,000 s.f. to 30,000 s.f., eliminating a vehicular connection to the adjacent neighborhood, and reducing the total unit count to 759. The Founders had deep regrets about making these compromises as they felt the neighborhood would be less diverse and less affordable, thus reducing the overall quality of I’On. However, political circumstances made these compromises necessary to get anything approved.

Note: 759 units on 243 acres works out to a density of 3.1 units per acre. For comparison, the Old Village of Mt. Pleasant has 3.7 units per acre, Charleston south of Broad Street has 5.2 units per acre, and a conventional R-1 subdivision in Mt. Pleasant has about 2.7 units per acre.

The compromises alleviated the concerns of a large portion of the opposition. However, there was still a core group of four or five individuals lead by Vince Adams who were determined to defeat the development proposal. Opponents argued that the neighborhood plan would generate too much traffic on Mathis Ferry Road. They refused to believe a traffic impact study prepared for the project, which found that because of the off-sight improvements being made by the developer (which included a new connector road between Mathis Ferry Road and U.S. 17) the traffic impact from new homes in I’On would be less than it would be from a conventional subdivision development where no connector road was required. This study also found that the level of service (a qualitative measure of traffic flow conditions) on Mathis Ferry Road would not change once the development was fully built out. Nor would opponents believe the Town of Mt. Pleasant’s own traffic engineering consultant who reviewed the study and concurred with its findings.

The opponents’ claimed the I’On Founders were being deceptive, and the maximum number of units that could be built on the property using R-1 guidelines was between 450 and 500 units. Their basis for this claim was a land plan that had been prepared for the property in the early 1990s, which opponents would cite in public meetings and letters to the Planning Board and Town Council. This plan, which showed 450 units, had been commissioned by Bob Miller, a developer with strong political connections, who had been building conventional subdivisions in the Town for many years. Miller had worked on this plan with Dick Jones, a former Mayor of the Town.

This new plan and rezoning application was submitted in December, 1996. After the requisite public hearing, it received a 7-1 recommendation for approval by the Mt. Pleasant Planning Board in January, 1997, followed by a 7-2 first reading approval by Town Council in February of 1997. The plan and rezoning application received 6-3 final approval by Town Council in March of 1997 (one council member who had supported the rezoning in February, switched his vote after intense lobbying by rezoning opponents). As with the 1995 application, the majority of citizens who came to speak at public hearings voiced support for the plan for I’On.

Infrastructure construction began in the summer of 1997 (two years after the initial design workshop took place) and ground was broken on the first house in March of 1998. Homes in the neighborhood have ranged in price from $160,000 to $1,700,000, and lots range in size from 1/20th to one half of an acre. It is worth noting that some of the more expensive homes sold in the neighborhood are located on some of the smallest lots. Quantity is not quality, and thus, does not necessarily translate into a higher price.

During the time the Planned Development ordinance received first reading approval in February of 1997 and infrastructure ground breaking in the summer of that year, the opponents of the project gathered a petition of 3,500 registered voters, which they presented to Town Council requesting that governing body overturn the approved ordinance, or otherwise, hold a referendum enabling the citizenry to vote on the zoning. The Founders challenged this action, and a Circuit Court Judge placed a Temporary Restraining Order (TRO) on the Town prohibiting them from acting on this petition. This TRO was subsequently lifted, and while the Town Council voted 6-3 against overturning the rezoning, they did schedule a Town-wide referendum be held in October of 1997.

The Founders continued their legal challenge, while preparing a campaign to win support for I’On at the polls in October of 1997. Site work construction continued unabated throughout despite the opponents’ legal attempts to stop it. One week prior to the scheduled referendum, Circuit Court Judge Markley Dennis ruled that a municipality could not hold a referendum on zoning issues. The Town was satisfied with the decision, but the opponents were not and intervened to appeal this decision. The appeal was heard by the South Carolina State Supreme Court in December of 1999. In January of 2000 the Supreme Court ruled unanimously to affirm the lower court decision.

The principal opponents of I’On targeted the incumbent supporters for defeat. In subsequent elections, five of the six council members who had voted to support the rezoning of I’On were defeated at the polls, and the other member of Council who had voted to support the rezoning, elected not to run. Despite all its aesthetic, economic, environmental and social successes, I’On was effectively used as a galvanizing issue for the anti-growth forces of the Town to defeat incumbents.

Since its approval, I’On has received numerous local, state and national awards for environmental sensitivity, sustainability, and design, including a Stewardship Award from the South Carolina Department of Natural Resources, and the National Association of Home Builders “Best Smart Growth Community” in the country in 2002. It has also received national and international recognition from media outlets ranging from CNN to National Geographic magazine. The neighborhood has played host to college groups, city councils and planning staffs from other municipalities in the Carolinas, and developers from as far away as Europe, Japan, and Australia. They come to learn more about smart growth principles in action.

The political fervor has died down over the years as I’On’s residential property values have consistently outperformed the market and are easily the highest of any new community in Mt. Pleasant. However, from time to time a new controversy will arise. A 2001 proposal to connect with the new subdivision of Braemore to the southwest was fought by Council. Another 2001 proposal to allow up to 80 of the 762 approved homes to take the form of “Rainbow Row” styled townhouses was voted down by Town Council 9-0. In January of 2002 the Town chose to fight a Montesorri School’s decision to locate on one of the sites designated for civic use in I’On, by arguing that a school is not a civic use. A circuit court judge ruled that the Town cannot exclude a school from its definition of civic use, but despite this, the Town asked its city attorney to appeal this decision to the S.C. Court of Appeals in April of 2002. In October of 2003 the Court of Appeals handed down a unanimous decision affirming the lower court’s decision, which opens the door for a school to be built in the neighborhood.

    A few observations.

As discussed, the neighborhood is located in close proximity to two historic districts that are, if price is any measure, the most sought after places to live in the area; through its Master Plan and Strategic Plan the Town had adopted a clear vision for the kind of development they wanted; we had two of the best, if not the best, planning teams in the country creating the initial plan; no less than four environmentally oriented groups endorsed the plan along with a substantial number of community leaders; and the developer had a track record of successful TND development within a 90-minute drive of the subject property.

It is important to recognize that our society has politicized property rights and democratized land use to the point that most re-zonings now involve a political campaign. Even with great built examples such as the historic area of Charleston and the Old Village of Mt. Pleasant, one should not make the naïve mistake of assuming that citizens or their elected leaders will understand the concept after hearing a lecture or reading a few articles on Traditional Neighborhood Development. Some may take years to understand the concept, while others may never understand it. And there are some who feel that accepting the design principles of TND involves an admission that what has been built over the last 50 years was a mistake. They may be unable or unwilling to make such an admission. Also, one should not assume that if a politician or appointed board member likes a project or thinks it is “the right thing to do” they will necessarily support it in a public forum. Few are those who possess the political will or guts to stand up to an angry room full of NIMBYs, or a well-connected citizen.

It is extraordinarily difficult to win such a political campaign in most areas of the country for several reasons: (1) Prior to World War II people were excited about growth. Their expectations were that what was built would be beautiful and contribute to their quality of life. However, the overall quality of the built environment of the last 50 years has been poor. This makes people distrustful of anything new, and gives rise to a legitimate belief that anything new will, by association with most of what has been built over the last 50 years, will necessarily be bad; (2) the private/exclusive mindset embodied in the suburban mentality (which has spread to many urban areas) leads people to believe that any more development will degrade their privacy and exclusivity; and (3) it is in the best short-term economic interests of existing property owners because limiting supply of new homes, puts upward pressure on existing home prices.

There are many bright spots in the I’On story that those involved in campaigning for, building, and living in the neighborhood can view with pride. As mentioned, the neighborhood continues to grow in aesthetic, economic, and social value. It attracts people from around the world interested in smart growth principles, and demonstrates that it is still possible to build in a beautiful manner.

The present Town Council of Mt. Pleasant attempts to address growth by widening roads, and mandating lower densities and segregated land uses. This has the effect of spreading new growth out to the fringes of Town, requiring longer travel times, mandating the need for a car to meet daily needs, and thus exacerbating the problem of traffic congestion. There are however, many municipalities taking aggressive measures to address the problems of sprawl. For example, the Founders have been welcomed by other municipalities and their citizens in South Carolina and North Carolina to participate in building new neighborhoods. With I’On and other examples of mixed-use development now taking shape across the country, the future looks bright for an expanded availability of housing choice.

Vince Graham
The I’On Company
vince@iongroup.com

Euclid’s Legacy

While well intentioned, like many progressive interventions of the eary 1900s, zoning has contributed to sprawl (which has begun to be demonized by progressives over the recent decades) and served to inhibit the vitality and diversity of urban neighborhoods. The triumph of the core philosophy behind Euclid vs. Ambler later enabled destructive urban renewal projects using eminent domain to displace entire neighborhoods, the emergence of unfriendly NIMBY activism, and more recently helped give legitimacy to the decision in the highly controversial Kelo v. New London Supreme Court Case.

Steve at Urban Review STL, a Saint Louis-based urbanism blog, wrote a great summary of Euclidean Zoning in the US.

The solution to these urban ills was zoning. Cities would create “land use” maps segregating industrial, office, retail, and housing. Early efforts were often used to keep industry from spoiling more pleasant areas of town. In Ohio the Village of Euclid, a Cleveland suburb, enacted zoning in 1921 to keep Cleveland’s industry out of its jurisdiction.

A property owner viewed the restriction on the future use of their land as a “taking” by the government and filed suit. The case, Village of Euclid, Ohio v Ambler Realty, went all they way to the U.S. Supreme Court. A lower court had ruled the zoning law to be in conflict with the Ohio & U.S. Constitutions. The Supreme Court, however, disagreed and reversed the lower court’s ruling. Their November 22, 1926 ruling declared use zoning as legal. Since then it has been known as “Euclidean zoning.”

In the 82 years since the Supreme Court validated the zoning ordinance for the Village of Euclid, Ohio we’ve managed to take a simple concept — keeping out heavy industry — to a point beyond reasonable. Cities and their suburbs now over regulate uses on land. Residential areas, for example, are broken down by single-family, two-family, multi-family. Even within Single-family you have different sections requiring different minimum lot sizes.

“Exclusionary zoning” is the term used when zoning is such that it excludes that which might be perceived as undesirable. For example, if a municipality has al their residential zoning so that lots sizes must be at least 3 acres in size. Minimum house size is another way to keep out more affordable housing options. Similarly, maximum sizes for apartments means those will end up being kid-free zones. It is one thing for a developer to set project specific standards but another for government to mandate it.

Houston is famous for its lack of Euclidean zoning. It does, however, have regulations such as 5,000 sq. ft. minimum lot size for a single family house. In Houston, according to Wikipedia, “Apartment buildings currently must have 1.33 parking spaces per bedroom, and 1.25 for each efficiency.” These sorts of rules produce the same results – sprawl and auto dependency.

Here’s a link to the source (Planetizen: Zoning Without Zoning) of that Wikipedia quote.

Dealing With NIMBYs

NIMBYism is the biggest obstacle to the evolution of vibrant urban communities, but the incentives for some to use public forums to impose restrictions on neighboring properties are great. Local politicians often bow to the most vocal residents, often with minority opinions, to avoid making waves, but their impositions are at the expense of the overall community (and the environment).

In a recent ULI post and on his own blog, Rob Goodspeed discussed NIMBYism:

NIMBY (Not In My Back Yard) activism is as bad as ever and getting worse, according to startling new statistics from a consulting company that specializes in overcoming opposition to development.

The third-annual Saint Index, a gauge of public opinion on urban development, found one-quarter of Americans say they or a family member have actively opposed a development project. That means Americans are twice as likely to oppose development than support it. Among the findings, 78 percent of Americans think there should be no new development in their community, 44 percent oppose new apartments or condominiums (up from 34 percent in 2006), and 69 percent say their local government is doing a fair to poor job on planning and zoning.

In his blog Rob discusses varying definitions of NIMBYism:

The key to understanding NIMBYism comes from political science, not the technicalities of zoning. NIMBYism occurs when a politically unrepresentative minority exacts unreasonable costs on the larger community, up to and including blocking otherwise supported developments. This definition comes from a provocative article by Morriss P. Fiorina titled “Extreme Voices: A Dark Side of Civic Engagement” that appears in this text.

Rob discusses strategies and solutions for dealing with activists. I tend to agree that as much as we would like to just ignore them, they don’t just go away. The best strategy is to be transparent and educate the community about the benefits. A vocal minority will have a more difficult time making waves when well-informed neighbors are brought into the discussion along with them.

The bottom line here is that people serious about changing the status quo in American cities must have a robust understanding and strategy for handling NIMBYism. Thanks to rapid changes in the mechanics of planning — the goals of written plans and character of the zoning — higher density, pedestrian and transit-oriented neighborhoods are increasingly legal again. What remains is the public engagement strategy to minimize the size and ranks of the vocal minority and convince American communities they’re the right form of development for our communities.

Urban[ism] Legend: Greedy Developers

This post is part of an ongoing series featured on Market Urbanism called Urbanism Legends. The Urbanism Legends series is intended to expose many of the myths about development and Urban Economics. (it’s a play on the term: “Urban Legends” in case you didn’t catch that)

We’ve all heard it said by some NIMBY activist: “This developer doesn’t care about the people of the neighborhood, he just wants to maximize his own profit.” Are developers the devil?

No doubt, developers usually are self interested, and seek profit. However, just like in any business, profit seekers must try to satisfy the desires of its customers better than its competitors. The successful developer must direct capital towards creating value in the real estate market for potential customers. So, perhaps it seems particularly greedy that a developer who is creating value in a community, cares less about the current inhabitants than newcomers.

But, as Henry Hazlitt wrote in the classic, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics:

the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

here’s a link to the quote in an online version of the book

Most Urbanism Legends, like most economic myths, rely on looking at policies from the perspective of one group without looking at the effects on other groups and society as a whole. This Urbanism Legend is no different. Looking deeper at the issue, the developer represents the needs of the community in a less visible, yet equally important way. However, it is the needs of those who desire to be in the community who the developer is most interested in advancing, obviously because those people are the only ones from whom the developer expects to earn profit. Thus, through his self interest, the developer is an advocate for those who intend to move to the neighborhood where he is developing.

In nearly all cases, the developer represents “The Forgotten Man”, or the less visible members of a community effected by zoning policies. If a developer is prevented from developing as many units as the market dictates, we do not see the individuals who have to look elsewhere for housing or pay more for housing in their desired location. Yet, we plainly see the existing neighbors who complain that a developer is neglecting their needs. NIMBY activism is a perfect example of lobbying for popular policies that benefit some seen person or persons, at the expense of the unseen persons.

Looked at from the perspective of “seen and unseen” the developer is the voice of the unseen future members of the community, while it is the existing neighbors who make themselves readily visible. The NIMBY seeks to abuse public policy to enhance his own property values at the expense of potential newcomers. (for more on “the seen and unseen”, check out Bastiat’s must-read 1848 essay, That Which Is Seen and That Which Is Not Seen also online here)

According to The American Heritage Dictionary of The English Language, greed is “An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth”

By this definition, who is greedy? The developer who seeks to earn a profit by satisfying the needs of its customers who are willing to pay market prices for the developer’s product? Or is it the NIMBY, who seeks to halt the progress of people who desire to live in his community, in order to improve his own property value?


To receive future Urbanism Legends posts, subscribe to the Market Urbanism feed by email or RSS reader here. If you come across an interesting Urbanism Legend, let me know by email or in the comments and I’ll make a post debunking the myth. Of course, I’ll give you credit for the tip and any contributions to the post you make…

Carroll Gardens, Choose Only One: Setback or Height Restriction?

NY Times – Carroll Gardens: The Big Front Yards That Rob the Streets

Although the yards serve as leafy margins to the streets, creating ample open space between the rows of brownstones arrayed on either side, they also put those streets into the “wide” category for zoning purposes. This means developers can build structures on those streets that are taller than would otherwise be allowed.

In recent months, some local residents, with one eye on all the construction, have been objecting to this rule.

Carroll Gardens, Brooklyn NIMBYs will do anything to stop development in their neighborhood. The buildings are set back so far from the street with gardens, yet they don’t want to allow taller buildings in their neighborhood, claiming the streets cant handle it. In my opinion, either allow taller buildings or end the setback requirements. Otherwise, your NIMBY selfishness is just too much.