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Randal: “Well, I’ve seen streets of row houses here [in DC] where every other house has been replaced by a six-story building – a three-story row house replaced by a six-story building.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.”
I think it’s interesting that O’Toole often writes about the importance of looking at revealed preferences, which he defines as migration data, for looking at where people want to live. But in the panel he focused entirely on survey data that says people prefer single-family homes to apartments, rather than looking at the revealed preferences demonstrated in price differences.
I had the same reaction, Emily. He talked about surveys and ignored when Ryan or Matt brought up prices. So I was sympathetic (and rather tickled) when Yglesias said it sounds like O’Toole is coming from a mirror universe.
It seems funny to hear him talk about density restrictions at all, and even more so density restrictions is suburbia. Normally he ignores all the government interventions that encourages low density living, and claims that since only low density gets built it is a revealed preference.
O’ Toole is correct that restrictions on density in suburbia does increase demand for density in the city, and vice versa.
O’toole seems to have his own bias to sub-urban living. People prefer more space to less space but they also prefer more money to less money. Since the costs of roads and parking are subsidized it is really hard to know what real preferences would be.
I think that, in the absence of surveys or models, if people were given a choice to live any place they choose, our metropolitan areas in the future would look … exactly the way they do now, only more so. 🙂
There are a lot of factors beyond calculated rationality that influences where we choose to live — that is to say, if we are at a station in life where we have the luxury of choice. It involves people being similar/different to how we look or think, as well as going against social conditioning. Remember, Americans are still conditioned to hate cities — ruralism and small towns are considered proper and upright — and very few areas went through the “urbanizing phase.” Suburbanization after World War II stifled the U.S.’s chance, which is why many cities fell into disrepair and disrepute.
The urbanizing phase reflects a maturing of the city community. Initially, all cities grow because of an influx of outside settlers, particularly from rural or isolated areas. When a large number stay, and don’t leave for greener pastures or when in-migration slows, this is when the urbanizing phase kicks in. People start to make place in the city, and develop public and private institutions and social ties.
It’s funny how Randal proposes deregulation in one area, but not the other. You know, I think there’s one bias that really defines him concerning land use. It is not conservatism or libertarianism. It is that he simply doesn’t like cities. If you read between the lines of “The Vanishing Automobile”, he is always complaining of the “traffic” and “congestion” of places like downtown Portland, and sneers at “planners” who want to increase density there. But when it comes to subsidizing sprawl, he makes nothing of it. So why, again, does he speak at dinners for the Cato Institute?