Randal O’Toole: “If you didn’t have those suburban restrictions, you wouldn’t have that pressure for density in DC”

Earlier today I posted the video of the Cato discussion on housing with Randal O’Toole, Ryan Avent, Adam Gordon, and Matt Yglesias, but I wanted to transcribe one segment towards the end. (Like I said, it’s hard to skip to the end of the streaming video because you can’t scroll beyond what’s already been downloaded.).

For the last question, someone from the audience says he’s a fan of Randal’s who lives in DC, and asks Randal, and the rest of the panelists, what they about the recent calls to lift the city’s height limit in response to development pressures.

Randal responds first:

Well this is where I think the policy questions [and the difference between Randal and the other panelists] come in on density. I think we ‘ve got Maryland, which has all these restrictions on supposedly protecting agricultural land, we have Loudoun County and other counties in Virginia that have zoned most of their land for 20-acre large lot sizes, those have restricted the ability of people to live in single-family, to build new single-family homes in the Washington, DC, metropolitan area. And so it’s created a pressure for more density in Washington, DC, but if you didn’t have those suburban restrictions, you wouldn’t have that pressure for density in Washington, DC. So I’d say, let’s get rid of the suburban restrictions, and then see if there really is a demand for high-density high-rise in Washington. If there really was a demand, there’s a lot of three-story buildings that could be redeveloped to be six and seven stories if you wanted to.

Matt: “You’re not allowed to!”

Ryan: “You should try to do that – if you can make it happen, then that would be a great profit opportunity.”

Randal: “Well, I’ve seen streets of row houses here [in DC] where every other house has been replaced by a six-story building – a three-story row house replaced by a six-story building. So obviously you can do it in some places.”

Matt: “Which street was that on?”

Randal: “I think it was on Wisconsin.”

Ryan, sarcastically: “Oh yeah, there’s no NIMBYism on Wisconsin Avenue.”

Randal: “I actually took a picture of it – I’ll show it to you afterwards…”

Ryan: “I think the argument that it is restrictions on the fringe of the metro area that are driving demand in the core simply doesn’t hold water when you actually look at the premiums you can pay in different places. I mean, if that were true, then we would expect prices in a place like Prince William County to be extremely high above construction cost – more about construction cost than we see in the center, and that’s not in fact what we observe.”

Market urbanism vs. market suburbanism smackdown at Cato: “The Death and Life of Affordable Housing”

The debate you’ve been waiting for! Randal O’Toole, Matt Yglesias, Ryan Avent, and Adam Gordon participated yesterday in a discussion at the Cato Institute moderated by Diana Lind from Next American City/Forefront. (How had this never happened before??)

Randal O’Toole did not disappoint, arriving in top form in his shoestring necktie and armed with a surprisingly interesting Powerpoint, but I think New Jersey-based attorney Adam Gordon stole the show with his discussion of inclusionary zoning and the Mt. Laurel doctrine (probably because he was on the only one on stage who hasn’t already spewed hundreds of thousands of words on the subject).

You can download the 90-minute discussion as an MP3 from Cato (much easier to scroll through), or watch the video streaming:

Randal O’Toole’s responds on “per passenger miles”

I’ve had my disagreements with Randal O’Toole, a libertarian defender of suburban sprawl, but to his credit, he’s done the most convincing accounting of subsidies (well, accounting costs, at least) that I’ve seen yet. And though he normally concentrates on federal costs, his write-up of an American Bus Association report includes this paragraph about mass transit:

What about state and local subsidies? A first approximation of such subsidies can be found by subtracting expenses from revenues in National Transportation Statistics. The results suggest that total subsidies to air travel are tiny, subsidies to highways are large (but tiny per passenger mile), and subsidies to transit are in between (but much larger per passenger mile). National Transportation Statistics doesn’t have state and local subsidies to Amtrak or intercity buses, but I suspect the former are much larger than the latter.

All of this is probably true, but I’ve criticized the use of “per passenger miles” in the past (as had Michael Lewyn, unbeknownst to me at the time) on the basis that trips in areas served by mass transit can be shorter than trips made with in the suburbs and the exurbs with a car. I emailed Randal O’Toole and asked him what he thought of this argument, and as always, he was kind enough to send me his response:

You make a valid point. But it is most valid in regions where transit is concentrated in dense areas and jobs are concentrated in those dense areas. In post-automobile regions, such as San Jose, Phoenix, and Houston, neither of those conditions apply. The same is true in pre-auto regions that have undergone massive decentralization, such as Cleveland and St. Louis. Even in Chicago and San Francisco, jobs have decentralized to the point where dense downtowns hold only a small share of the region’s jobs.

Wendell Cox has some great maps somewhere on one of his web sites, or at least in his slide shows, showing the portion of urban areas such as Portland that can be reached from a random starting point within so many minutes by transit and by auto. Unless the starting point is downtown, transit reaches only a tiny fraction of the area reached by autos.

In sum, outside of Manhattan, I suspect your point is valid only for people starting downtown — that is, at the hub of our hub-and-spoke transit systems. I am sure a detailed analysis could be done to prove whether or not this is true.

First of all, I’m not sure Wendell’s point is all that relevant here – the question is whether miles (in other words, the “tiny fraction of the area reached by autos” that he mentions) is even a useful measurement when comparing transit-oriented cities and car-oriented sprawl. But the point in his first paragraph is undoubtedly true: most regions do not have very many jobs downtown, and transit works most effectively when everyone commutes downtown, within neighborhood, or somewhere in between the two. But is the paucity of jobs in cities’ dense urban cores a natural free market outcome, or is it the result of anti-density limits like zoning and parking minimums?

Furthermore, are transit lines not located in dense places (like most new lines out west) because there is no demand for density, or is it because they’re “zoned out” – that is, infill development is essentially no longer allowed? I know that every neighborhood near a transit line I’ve ever lived in has been completely built up to the zoning envelope. And the fact that most transit authorities allocate prime TOD property – the parcels directly adjacent to the station – to parking lots, completely ruling out any development whatsoever, can’t help matters. The problem of land socialistically allocated to parking near stations is most acute out west, where all new stations are surrounded by a sea of parking, but it also happens with commuter rail lines in the Northeast.

Is O’Toole right that California is too dense to matter?

Remember my response yesterday to Randal O’Toole’s Cato article on parking, when I said that I could easily write a three-part series? Not a joke! (Though I might spare you and leave the trilogy unfinished. Maybe.)

Today, I’d like to take on O’Toole’s comments on California, which he argues is too dense and hostile to automobiles to say anything about the real America:

While New York City is very dense, its suburbs are not, so it is not the densest, or even the second or third densest, urban area in America. Instead, that title goes to Los Angeles, followed by San Francisco-Oakland and San Jose—the locations of most of Dr. Shoup’s other examples. Thanks to urban-growth boundaries that are now mandatory for California cities, whatever happens there is hardly representative of much of the rest of America.

He also said something similar in a comment he left on a Market Urbanism post last August about an empirical paper that found that a large portion of the parking in Los Angeles County (population: 10 million) was built because of minimum parking regulations:

I’ve said it before, but Los Angeles is hardly typical of the rest of the U.S. It is the densest urban area in the country (and not just the city is dense). Beyond that, my more important point is that developers build parking lots everywhere, not just where there are parking minimums.

Average density: a misleading measure of walkability

Average density: a misleading measure of walkability

My problem here is that O’Toole is using the literal definition of “density” – that is, average density. But this is just a shorthand for what really matters when you decide whether you need a car or not (and developers decide how much parking they need to build to maximize profits): walkability and access to mass transit. We often use “density” as shorthand for auto-orientedness, but it only really serves as a good metric over very small spaces. When you start looking at metro areas, though, its utility declines.

Paul Mees and Jarrett Walker have written about this to death, and it can get a little tricky to think about, but I think the best way to grasp it is with an example. Say you have two metro areas with the same population and same area, but with one where everyone’s concentrated in one city with only few people scattered around the suburbs, and another where everyone’s the same distance from each other. They’ll both have the same average density (population divided by area), but clearly one will be walkable and one will not be. Obviously this is a stylized example, but similar dynamics inevitably play out in the real world. California’s suburbs may be dense, but they’re still built in a very suburban style and are thus largely unwalkable. Much of this effect is achieved through separation of uses and the road network: Even if you live at Manhattan densities, you’re going to need 100% parking if the road network is all cul-de-sacs and limited-access highways with low connectivity and mixed uses are not allowed.

All of this is to say, Los Angeles’ high average density seems like a flimsy reason to disregard one of the few (two, by my count – the other looks at Queens) empirical studies on the effects of parking minimums. And while it’s true that California has urban growth boundaries that make it relatively unusual among American cities, it’s also true that the same anti-growth environmental forces also put in place some pretty anti-growth policies in the already built-up areas, so it’s not at all clear that the net effect is to make the place less car-oriented. I’ve never spent any appreciable time in the state, so maybe I’ve just been deceived by Hollywood and everyone I know and everything I’ve ever read, but I’d bet that it is indeed at least of average auto-orientedness for American metropolitan areas. If density in Los Angeles County is hobbled by parking minimums, then I see no reason to think that the same wouldn’t apply for similar parking minimums in metro areas throughout the rest of America.

Links

1. Maps of sprawl and gentrification in Detroit, St. Louis, Chicago, and Boston. At first the picture looks bleak for cities, but Jesus – even downtown Detroit is growing! (More here.)

2. A real, live Texan (just kidding – he lives in Austin) replies to O’Toole on parking.

3. Why aren’t (more) urbanists cheering on Jerry Brown’s attempt to kill sprawl-inducing California redevelopment agencies? (Streetsblog SF/LA, I’m looking at you!)

4. NY lawsuit alleges that LEED standards are meaningless, and Charlie at Old Urbanist takes the opportunity to review the case against America’s most popular “greenness” metric.

5. This is awesome: The DC Office of Zoning makes the code and all the overlays accessible on Google Maps. Is there any other city with anything like it?

A far-too-long rebuttal of Randal O’Toole on parking

Houston <3 parking minimums

Houston <3 parking minimums

Donald Shoup and Randal O’Toole – they just can’t get enough of each other! Donald Shoup, you may recall, is the granddaddy of free market parking policy, and Randal O’Toole is the self-styled Antiplanner. Though they both claim to be libertarians, they seem to have some pretty fundamental disagreements, which we heterodox libertarians at Market Urbanism can relate to. Shoup has made a career out of pointing out the sprawl-enhancing effects of minimum parking regulations and under-priced on-street parking, whereas O’Toole’s made his on the idea that sprawl is the free market equilibrium and that smart growth, not anti-density NIMBYism, isthe greatest threat to free markets in land.

They’ve sparred before in a roundabout way, with Randal O’Toole replying to Tyler Cowen’s very Shoupian NYT column and then Shoup posting a three-part rebuttal to that (which I wasn’t totally onboard with, surprisingly), but I think this Cato Unbound issue is the first time they’re being published head-on. It’ll also also include friend and former Market Urbanism contributer Sandy Ikeda, whose opinion I’m excited to read, along with Clifford Winston of Brookings. Shoup’s contribution was good, though probably familiar to Market Urbanism readers. But it’s O’Toole’s that I want to talk about.

There’s a lot about what he wrote that I take issue with, but to keep this post to a manageable length (I could easily make my reply to O’Toole a three-part series), I’ll stick to this paragraph. O’Toole is arguing that in most of America, parking minimums don’t contribute to sprawl since developers would build that much parking anyway:

To find out what cities would be like without minimum-parking requirements, we must turn to Texas, where counties aren’t even allowed to zone, much less impose minimum-parking requirements. This means developers are free to build for the market, not for urban planners. While cities are allowed to zone, for the most part they maintain minimal restrictions so as not to lose potential tax-paying developments to areas outside their jurisdiction. The result, as anyone who as toured Dallas, Houston, or San Antonio knows, is large amounts of low-density development supported by plenty of off-street parking, all without minimum-parking requirements (at least outside of city limits).

The first sentence is misleading, at best. His wiggle-room comes from that easily-missed parenthetical reference at the end of the paragraph, where he admits that his analysis only applies “outside of city limits” – but even then, he’s still wrong. Eliza Harris at My [Urban] Generation does the heavy lifting and looks into a random sample of Texas counties cities (see edit at bottom) and finds that all of the ones she looks at have parking minimums:

Review of every tenth TX ordinance on municode.com starting with Addison, TX. Bonus cities: Houston, Alamo Heights, and Balch Springs. No code reviewed lacked off-street parking requirements. Full zoning code for Henrietta TX could not be found however code refers to “parking consistent with and adequate for the use proposed” under regulation of alleys.

Which brings me to O’Tooles caveat – “at least outside of city limits.” But as Eliza also mentions, dense development – the kind that would benefit from not having to adhere to parking minimums – must occur in already built-up places, so the fact that it’s allowed (which it’s at least sometimes actually not) in places that aren’t built-up is really not very helpful or relevant. O’Toole is basically saying that you can go ahead and build parking-less new developments – as long as it’s in a place that not even the most wide-eyed first-year planning student would think to build. Without actually delving into the codes myself, Michael Lewyn’s study of land use regulation in Houston (academic version here, shorter article here) gives some examples of parking minimums that seem just as high as, if not higher than, the average American zoning code.

Beyond parking, I also take issue with O’Toole’s assertion that Texas cities’ land use restrictions are “minimal.” Houston is the city that’s usually cited as the most unregulated, and as far as I can tell, the story of “unzoned Houston” started with Bernard Siegan’s Land Use Without Zoning published in 1972. Analyses published more recently, though, conclude that despite rejection of the formal “zoning” label, land use in Houston is indeed very much regulated. In addition to the numerous land use restrictions that Lewyn cites in his study, a 2010 law review article (.pdf) presents a few vignettes describing land use mechanisms in Houston, including “voluntary” deed restrictions that can be renewed with far less than 100% agreement from all affected landowners, and subdivisions in which 51% of your neighbors can prohibit you from splitting your land. And then there was the Ashby Highrise controversy, where an arbitrary traffic study eventually led to victory for the NIMBYs, and sent a clear message to developers that, to misquote O’Toole, they are not free to build for the market if the market wants density.

But of all my objections to that one paragraph, I’d have to say that this sentence is the one that bothers me the most:

While cities are allowed to zone, for the most part they maintain minimal restrictions so as not to lose potential tax-paying developments to areas outside their jurisdiction.

Sound familiar? It’s the essential justification for zoning. I don’t buy it, and I didn’t think Randal did either. But I guess Texans are just so laissez-faire that even their socialism is efficient.

Edit: It looks like I made a mistake in saying that Eliza a bunch of randomly selected Texas counties and found that they all had parking minimums – they were in fact cities, which O’Toole admits have minimums. However, she did look at two counties, and both of those also had parking minimums, under the subdivision codes. As O’Toole points out, they don’t have “zoning,” but the subdivision regulations seem to be the functional equivalent.

Edit II: Turns out Hidalgo County, a poor (but growing) county in the Rio Grande Valley on the Mexican border, also has minimum parking requirements. Yet another strike against O’Toole. I tried to look up the regulations for the other Rio Grande Valley counties – all of which are very poor, and presumably have relatively low car ownership rates – but it doesn’t look like any of them have the information online.

Livechat invitation and more thinktank responses

As promised, I want to reprint the responses I got from Wendell Cox and Randal O’Toole, but first I wanted to invite everyone to a livechat that’s being organized by Tim Lee. Tim used to write for Cato, but now he’s pursuing a PhD at MIT and doing freelance writing on tech policy. He organizes these livechats occasionally and has been kind enough to ask me to be his guest, so if you want to participate (or just watch), go to Tim’s website on Wednesday between 9:30 and 10:30 pm EST, and click on “General Chat” on the bar in the lower right-hand corner. The audience should be relatively small, so if you have something you want to ask or discuss or debate, there’s a good chance that we’ll get to it.

So anyway, Marc Scribner has posted his response to my response to his response to my response (sorry, couldn’t help myself) to Seattle’s recent land use liberalization.

Wendell Cox’s response was similar to Marc’s, so my disagreements are similar, but Randal O’Toole took a different approach, and one that I pretty much completely agree with:

I have no significant problem with liberalizing parking codes. My one caveat is that planners need to remember why those parking minima were there in the first place. In some cases, they were put in because some guru somewhere said that was the way to do it. But in other cases, there was a genuine concern about the need for off-street parking in order to prevent congestion around on-street parking.

In this case, I agree with Don Shoup that the remedy is for the city to charge market rates for on-street parking. Sometimes, of course, the market rate is zero. But other times parking should be metered to insure that everyone who really wants to park (as indicated by their willingness to pay) has parking.

In short, liberalizing parking codes should be combined with marketizing on-street (and any public off-street) parking. At the same time, cities should beware of using parking charges as a way to punitively oppress auto drivers, which would be tempting in places that have a strong anti-auto political lobby. But that would work itself out in the long run because places that are too anti-auto will lose businesses to nearby communities that are more auto friendly.

My only quibble would be with the punitive oppression part – unlike Shoup, I think that until we privatize on-street parking and sell off the land (with complete development rights) to the highest bidder, then the city’s should try to recoup as much of the opportunity cost of the space as possible by jacking rates until they actually start to take in less revenue (at which point I agree that the rates are oppressive). In other words, they should never set the price at zero unless not a single person would park there otherwise. But beyond that, I’m pleasantly surprised to find myself in complete agreement with Randal.

And so, with Wendell Cox’s response, I hereby conclude the first (and hopefully not last) market urbanist vs. market suburbanist blogospheric debate:

Thank you for the opportunity to comment. I generally favor liberalization of land use regulations. I am pleased that apparently they are not setting maximum parking regulations. The bigger problem in the Seattle area is the growth management policies that have established the urban growth boundary. This is where the liberalization really needs to happen. During the housing bubble, the Median Multiple (median house price divided by median gross household income) rose to about double what it had been at the beginning of the bubble, and double the historic norm. Increases of this magnitude occurred only in places like Seattle, where excessively restrictive land use regulations forced the price of land for residential development to unprecedented heights. Prices remain at least 1.5 times norm.

In the longer run, this bodes poorly for the Seattle area, where people will have less discretionary income as a result. This will be a particular problem if the economy fails to grow strongly and unemployment is not materially reduced. In this environment, the last thing government policy should do is raise the price of anything.

The mirage of revealed preferences

I often hear from libertarian-inclined defenders of the suburban status quo that the fact that American is so overwhelmingly suburban is proof that it’s what Americans want. Economists call this “revealed preference,” but it could also be understood as voting with your feet and wallet. People have made the decision to live in the suburbs, so there must be something they like about it. Randal O’Toole of Cato and Wendell Cox of Demographia have both made versions of this argument, as has Jesse Walker back when he was at CEI. Though some liberals take issue with the idea that markets reflect preferences better than democracy, for the most part people understand that there’s wisdom in consumer choices.

There is, however, one catch to using revealed preferences: the market has to actually be a market. That is, it has to be free of regulation and subsidies that push consumers too much one way or the other. So, for example, you cannot use consumers’ “revealed” preference for high-fructose corn syrup to argue that Americans prefer it over sugar, because the government massively subsidizes corn and imposes tariffs and quotas on sugar.

Now of course, America has a mixed economy, with an arcane structure of rules and regulations undergirding a capitalist system, so no sector is going to be entirely free of interference.  Although people like O’Toole are adamant in their stated opposition to parking minimums and mandatory low density zoning, they believe that density-forbidding regulations are mostly benign and unnecessary, since most Americans wouldn’t really want to live more densely than they do now.  By this logic, even if restrictions on density were loosened, developers wouldn’t change their ways and America’s deeply suburban land use and transportation patterns would endure.

At the end of the day, whether not we can use “revealed preference” becomes an empirical question: do developers want to build more densely than current regulations allow?  Land use is an enormously complicated and hyperlocal subject, with good data only beginning to emerge, but from what I’ve seen, the answer is an emphatic yes.  Everyone can probably agree that there is a huge amount of pent up demand for density in desirable East Coast urban cores, with high-end markets in illegal land uses.  But empirical proof is more compelling, and in that vein, I think this paper on parking minimums in Los Angeles County is the best evidence we have so far that land use codes induce sprawl beyond the market equilibrium.

Of course, that one paper is not the be all, end all of land use research.  But regardless of which way the evidence goes, I at least recognize that divining Americans’ desired land use patterns is more complicated than looking at the status quo – simply saying “Houston” and waving your hands is not enough.  Too many libertarian defenders of suburbia accept the status as a preference revealed by market competition and refuse to accept debate on this point, and from shaky premises can only come shaky conclusions.