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Month June 2008

California’s Water Resources vs Development

There are some good articles out there this morning, I want to share them with you… Rationalitate – California developments halted over water While the knee-jerk libertarian reaction might be disgust, I think the markets are probably ruined by the government, and current pricing isn’t what it would be in a market setting. UCLA professor Edward Leamer corroborates this, saying “[w]ater has been seriously under-priced in California.” So, the plan would have an effect similar to a liberalization: increased barriers on sprawling development. But obviously it’s only a nudge in the right direction, and is a woefully inadequate mechanism compared to outright liberalization of water resources. Is it possible to liberalize the water market, which would be the ideal solution?

NYC Crane Inspector Corruption

Associated Press – Senior NYC crane inspector accused of corruption: A senior city buildings official took bribes in exchange for falsely reporting that cranes had been inspected and that crane operators had been certified, but his actions did not appear to be connected to two recent crane collapses that killed nine people, authorities said Friday. James Delayo, an assistant chief inspector with the Department of Buildings’ cranes and derricks division, accepted thousands of dollars in bribes from a crane company, Department of Investigation Commissioner Rose Gill Hearn said in a statement. As Manual Lora at the LRC blog put it: So will the Department of Buildings suffer a market loss? Perhaps its stock will go down? Maybe they will take a hit in subscribers? Will its certification suffer? Will insurance companies still use their services? Oh wait. This is the state we’re talking about. Nothing to see here…move along… I guess I couldn’t put it any better than Manual….. photo by flickr user Alexandry Augustin

Free Market Impostors

I subscribe to the CATO Institute’s Daily Dispatch email. I enjoy ready the daily briefings of current events from a free-market perspective. But, once in a while, my capitalist stomach turns when they mention transit, usually accompanied by a quote from Randal O’Toole. Usually he bashes some transit plan, and gives some statistics about the inferiority of transit. Here’s a quote form the most recent Dispatch: Cato senior fellow Randal O’Toole writes: “A mile of rail transit line typically costs more to build than a four- to eight-lane freeway and typically carries fewer than half as many people as a single freeway lane mile. Federal funding for rail transit comes out of gasoline taxes and other highway user fees, and in most cases those funds would be more cost effective if spent on other transportation facilities.” Does this sound particularly “free market” to you? He’s just saying one socialist system is better than the other. On top of that he consistently presents only half the facts. You don’t even have to dig into his sources of data to know he is pulling a trick on the reader. Can you detect the deceptions? Yep, he discusses construction costs and completely neglects land costs, then focuses on cost/mile (as opposed to the more relevant cost/trip), while falsely inferring that the costs of automobile use is fully paid by fees and gas tax. Out in the country, land may be cheap and costs can be neglected. But, in urban areas where transit becomes more competitive, land is significantly more expensive. If one neglects land costs, one could justify tearing down several 60 story, $1000/sf office buildings Midtown Manhattan to build a 10 lane highway instead of an underground subway. I have a hard time respecting anyone who willingly neglects real costs (not just […]

Landlord Finally Free to Live in His Own Home

After battling in court since 2003, this family is finally able to turn their 60 room apartment building into one gigantic home for themselves. Of course, the beneficiaries of the rent-controlled apartments don’t believe the owner’s family should have the right to live in their own building. New York Post – VILLAGE TENANTS ‘HOUSE BROKEN’ The Court of Appeals found that Alistair and Catherine Economakis can go ahead with eviction proceedings against their low-income tenants at 47 E. 3rd St., as long as they plan to use their apartments for themselves. “We’re all working people, your typical, moderate-income working people. For them to want to kick us out so they can have a luxury mansion – it’s ethically and morally unconscionable. I don’t know what other word to use,” said David Pultz, 56, who’s lived in the building for the past 30 years. Pultz said he pays $625 a month for his one-bedroom apartment, and is concerned that if he gets booted, he’ll have to leave the city. (that’s about 1/4 -1/3 the market rate for that neighborhood) “At a time of a really grave housing shortage, it’s a matter of serious concern that an owner can be permitted to obtain 15 apartments for his own use,” he said, adding that in the rest of the state, owners can’t claim more than two apartments for themselves. As I described in Rent Control Part 3, rent control creates this type of class tensions between the property owners and the “entitled” class tenants. It seems completely silly that the landlord has to go to such extremes to get out of the burdens of rent control, but can you blame him? Compared to buying a new home, it probably cost him next to nothing in lost revenue to evict the tenants. Here is […]

Somin: Causes of the Defeat of Prop 98

Ilya Somin at Volokh – Causes of the Defeat of Proposition 98 There were two major causes of Prop 98’s defeat. One was the sponsors’ mistake in combining the popular cause of restricting eminent domain with a far less popular phaseout of rent control. The second and more unusual cause of 98’s defeat was the presence of Proposition 99 on the ballot. If you are interested in this, please check out Ilya Somin’s extensive writings on Proposition 98 and 99 at The Volokh Conspiracy.

“Cockamamie” Neighborhood Zones

Thanks to loyal reader, DBM for the tip on the photo link. David Weigel – Highway to the Neighborhood Zones refers to DCist – Police to Seal Off D.C. Neighborhoods The Examiner has the scoop on a controversial new program announced today that would create so-called “Neighborhood Safety Zones” which would serve to partially seal off certain parts of the city. D.C. Police would set-up checkpoints in targeted areas, demand to see ID and refuse admittance to people who don’t live there, work there or have a “legitimate reason” to be there. Shelley Broderick, president of the D.C.-area American Civil Liberties Union and the dean of the University of the District of Columbia’s law school, said the plan was “cockamamie.” “I think they tried this in Russia and it failed,” she said. Good luck opening a business and bringing jobs to those areas if customers have to pass through a checkpoint every time they enter the zone. I can’t see things getting any better in these neighborhood zones. Almost sounds like an exclusive luxury community. If they want their neighborhood sealed off, they could buy the streets from the district, build a wall, and hire their own private security. But, I assume it’s not a luxury community and they can’t afford their security.

Somin: Prop 99 Worse Than Nothing

Ilya Somin at Volokh: Why California’s Proposition 99 is a Lot Worse than Nothing Yesterday’s California returns show that Proposition 98 – the referendum initiative that would have imposed real restrictions on eminent domain and also phased out rent control – has been overwhelmingly defeated by a 61% to 39% margin. The rival Proposition 99 – an initiative sponsored by local governments and other pro-condemnation interests that only pretends to protect property rights – passed easily by 62 to 38.

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.

Roads: US vs Europe

Pick Your Road: The U.S. vs. Europe, by Bryan Caplan In the U.S., we have low gas taxes, low car taxes, few tolls, strict zoning that leads developers to provide lots of free parking, low speed limits, lots of traffic enforcement, and lots of congestion. In Europe (France and Germany specifically), they have high gas taxes, high car taxes, lots of tolls, almost no free parking, high speed limits (often none at all), little traffic enforcement, and very little congestion. I’ve never driven in Europe, but I can’t imagine enduring city driving in the European cities I’ve been to. Those drivers are nuts! But, I’d venture to say that costs of driving in Europe are closer to reflecting the true costs, as opposed to the US’ tax, build with Pork, then neglect highway systems to spend on other pet projects system. The US socializes and subsidizes auto-transportation, while Europe socializes and penalizes. I imagine the European systems is closer to resembling a free-market transportation system than the US. But, we’ll probably never know for sure…

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