Month June 2012

Economics, Zoning

Rent control by any other name

Earlier this week, David Alpert wrote a piece at Greater Greater Washington on the benefits of inclusionary zoning and why economists should support it. I would counter that IZ as designed in DC is not an efficient program for providing affordable housing, and to the extent that it does provide significant numbers of price-controlled housing units, it will necessarily have many of the negative attributes of rent control. IZ works by requiring developers to provide below-market cost units in addition to market rate housing, and providing them with “density bonuses” in exchange. The problem with this is that building more units in itself makes housing more affordable. Obviously I understand the many political obstacles to allowing more residential development, but I don’t think that introducing units that are permanently price-controlled is the appropriate price to pay for this political concession. As Walter Block writes at the Library of Economics and Liberty: Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that “a ceiling on rents reduces the quantity and quality of housing available.” Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement. The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners Milton Friedman and Friedrich Hayek on the “right” to their fellow Nobel laureate Gunnar Mydral, an important architect of the Swedish Labor Party’s welfare state, on the “left.” Myrdal stated, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.” Consumers and producers in the IZ market will face the same […]

Uncategorized

Before the landmarks…

The other day I was stumbling around Wikipedia when I found pictures of what was apparently the first iteration of New York’s Grand Central train station, called Grand Central Depot. The “depot” opened in 1871 and was built in the neo-Renaissance style that was popular back then (as opposed to the final, neoclassical incarnation), and stood for less than 30 years. It was partly torn down and reconstructed in 1899, and then totally demolished “in phases” between 1903 and 1913 to make way for today’s Grand Central Terminal. This got me thinking about the old Pennsylvania Station whose demolition was a catalyst for the modern preservationist movement. Like nearly every big old building in New York, it was of course not the first building to stand there – development in cities during the prewar era was as much about redevelopment as it was about building in greenfield sites. It was a given that building would come down and new ones would be built – a city that’s been disrupted in most American downtowns. (Midtown Manhattan is of course one of the few places in the U.S. where this still happens – the Drake Hotel was of course torn down a few years ago by Harry Macklowe, on the site of what is now 432 Park Ave., and the Hotel Pennsylvania across from Penn Station will likely be replaced with an office tower once the market comes back.) Anyway, I put out a call on Twitter for pre-Penn Station history, and lo and behond @enf alerted me to a panel at an exhibit at the Transit History Museum in Brooklyn, which I managed to find some pictures from on Flickr. Here’s a wide shot of the panel (though you can zoom in pretty close), and here’s some of the text that […]

Development, housing, Zoning

Look beyond Fourth Avenue in Brooklyn for solutions to a lack of retail

Robbie Whelan’s got a column in today’s Wall Street Journal on Brooklyn’s Fourth Avenue, which is something I’ve been thinking a lot about since I moved to Brooklyn earlier this year. If you don’t recall, last year the City Council passed a zoning amendment to require new residential developments on the transit-rich, pedestrian-unfriendly avenue in South Brooklyn to include a certain amount of ground-level retail, to appease the ghost of Jane Jacobs and to stop burning the souls of all who walk the avenue. Robbie’s column is outwardly critical of the city (he blames “bad decisions by Amanda Burden’s City Planning Department”), but on another level, he’s just cheering on what DCP already did (“the city finally got wise and passed another zoning change last year”). But walking down Fourth Avenue, and seeing all the vacant retail storefronts in apartment buildings sprinkled around the neighborhood from the last development cycle, it seems obvious that the real problem is a lack of demand, which Robbie derides as “the profit-above-all-else motive of some developers” (“some”…ha!). Namely: the neighborhoods around Fourth Avenue are too auto-bound and not dense enough to support the retail and pedestrian traffic that would make Fourth Avenue a vibrant place. (The lots bordering Fourth Avenue may one day grow dense enough to support retail without the help of their side streets. But for now, only mid-rise development is allowed, so I don’t see Fourth Avenue being self-sustaining any time soon.) Perhaps the biggest problem is the industrial zoning around the Gowanus Canal and Bay, a few avenues over from Fourth Avenue. Capital has replaced labor in U.S. non-service-sector jobs over the last century, and the only business that can take advantage of the zoning around Third Avenue are auto-oriented (manufacturers these days ship their goods by highways, not canals!). […]

Uncategorized

New York transit officials grudgingly consider using existing track more efficiently

Now that Chris Christie killed the ARC project, which would have built another rail tunnel between New Jersey and Manhattan, Transportation Nation is reporting that MTA boss Joe Lhota is asking the different New York area railroads to do what they were supposed to do half a century ago when they were nationalized: cooperate! What to do in the meantime? Lhota tossed out three ideas, each aimed at boosting capacity at Penn Station in Manhattan, the hemisphere’s busiest railroad station and a terminal for New Jersey Transit trains. He said the station’s 21 platforms should all be made to accommodate 10-car trains, which would mean lengthening some of them. He also said that the railroads using the station—Amtrak, New Jersey Transit and Long Island Rail Road—should do a better job of sharing platform and tunnel space. Each railroad currently controls a third of the platforms, which sometimes leads to one railroad having too many trains and not enough platforms at the same time another railroad has empty platforms. The railroads also vie with each other for access to tunnels during peak periods. Lhota said capacity would be boosted if dispatchers in the station’s control room could send any train to any platform, and through any tunnel, as they saw fit. Lhota’s third suggestion was the most ambitious. He said the three railroads—plus the MTA’s Metro-North line, which connects Manhattan to Connecticut and several downstate New York counties—should use each other’s tracks. In other words, trains should flow throughout the region in a way that sends them beyond their historic territory. For example, a train from Long Island could arrive in Penn Station and, instead of sitting idly until its scheduled return trip, move on to New Jersey. That way, trains would spend less time tying up platforms, boosting the station’s […]

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TRD: Bushwick is staying industrial – no residential rezoning for East Williamsburg!

The Real Deal says that Bushwick, a neighborhood on the L that’s seeing a lot of housing demand spill over from Williamsburg, is not getting a residential rezoning. TRD describes how the “sought-after northwestern area […] is zoned for manufacturing, so residential building is largely banned there,” but then buries the lede deep down: And while the city passed a high-profile rezoning for the Williamsburg and Greenpoint waterfront in 2005 — paving the way for high-density housing in formerly industrial sites — no such rezoning is on the horizon in Bushwick, the department of City Planning said. The North Brooklyn Industrial Business Zone, which encompasses a portion of Bushwick, was created in 2005 by Mayor Michael Bloomberg as “a sort of policy statement: ‘Hey, these are industrial and are currently used for manufacturing — and should stay that way,’?” explained Mitchell Korbey, head of the land-use department at law firm Herrick Feinstein. The Bloomberg administration has done a record number of rezonings, but sources said the mayor, along with Brooklyn borough president Marty Markowitz, wants to keep Bushwick’s zoning predominantly industrial to preserve the city’s manufacturing base. Dolgin, for example, said he recently sold a 46,000-square-foot parcel at McKibbon and Bogart streets for $4.37 million, and the site will be used as storage for scaffolds. In some southern portions of Bushwick, a mixed-use building can be redeveloped as residential, but a variance is required to do that in most of the popular East Williamsburg area, and they are rarely granted, Dolgin said. The article says that the SoHo loft law is occasionally being used to convert existing structures, and that hotels and hostels are being built since they’re allowed by zoning. Then again, Bloomberg’s rezoning days are over after the Midtown East upzoning, so his opinion on rezoning Bushwick isn’t […]

Culture & Books, parking, Transportation

The High Cost of Free Parking Chapters 1-4

Here’s the first installation of Market Urbanism Book Club, covering the first four chapters of Donald Shoup’s The High Cost of Free Parking. If you’ve read the book previously or are reading along, please share your thoughts and questions in the comments. Chapter 1: Shoup outlines the unusual view that we take toward parking. Rather than assuming that demand for parking, like any other good, is a function of its price, urban planners typically assume that parking is a zero-price good and require building owners to provide enough parking to meet demand given a zero price. Imagine that this was the way we treated other goods… This Friday afternoon I’m thinking of a municipality that requires bars to provide their customers with as much beer as they’d like at a zero monetary cost. Shoup points out that of course we pay for the cost of all this parking, only drivers do not pay this price in their role as drivers. We pay for it as a tax on housing, retail goods, and in the form of lower wages as workers. Those who pay the highest tax are of course non-drivers. Some drivers are subsidized under this system with the highest subsidy going to drivers who make frequent, short car trips. He explains that off-street parking requirements developed as the demand for zero-price curb parking outpaced supply. This is a classic case of the Tragedy of the Commons. Because no one had property rights of street parking, it was overused. Rather than charging for this scarce resource, or allowing building owners to provide their customers with parking at profit-maximizing prices, city governments turned to regulations. Chapter 2: In this chapter, Shoup really gets to the core of the problems that government employees face when they try to provide consumer goods. Some […]

Free-market impostors, housing, planning, Policy, Zoning

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] […]

Economics, housing, planning, Policy, Zoning

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:

Stephen Smith
June 14, 2012

Uncategorized

APA California hints (strongly) at opposition to parking minimum reform bill

Minimum parking requirement reform bills have been floating around the California legislature for a while – last year it was AB 710, and this year it’s AB 904, both authored by East Bay Asm. Nancy Skinner. This email blast to members from the American Planning Association’s California chapter doesn’t take an official position and does ask at the end for input, but their feelings on the bill are kind of hard to miss (all emphasis theirs, edited slightly for clarity): AB 904 [.pdf], sponsored by the Infill Builder Association and authored again by Assembly Member Skinner, is a gut and amend that is now similar to AB 710 (Skinner). This bill requires restrictive parking standards similar to those included in AB 710, which you’ll recall died on the Senate floor at the end of last year. AB 904, in a different form, already passed the Assembly, and is now awaiting hearing in the Senate. APA California is not opposed to the concept of lower parking requirements near transit when a community decides it is right for them – the issue is that a one-sized-fits-all statewide standard is not appropriate. AB 904, on and after January 1, 2014, would prohibit a city or county (including charter cities) from requiring minimum parking requirements in transit-intensive areas greater than the following: • One parking space per 1000 square feet for nonresidential projects (including commercial, industrial, institutional, or any other nonresidential projects regardless of type of use). • One parking space per unit for non-income-restricted residential projects. • 75/100ths parking spaces per unit for projects that include both income restricted and non-income restricted units. • 5/10ths parking spaces per unit for units that are deed restricted at least 55 years to rents or prices affordable to persons and families making less than 60% of area […]

Uncategorized

In Defense of Chicago

First of all, I should start out by saying that I’ve only ever been to Chicago once, and I really don’t remember anything but the inside of my aunt’s house. I remember asking them if there was good mass transit, and they said Metra is good, but the L, which is near them, is not something they’d ride. My aunt, who led the family, was a financial services executive in Chicago, but they moved to the Research Triangle in North Carolina when she went into tech/healthcare. I imagine just the people Aaron Renn has in mind when he wrote “The Second-Rate City?” for City Journal. That anecdote aside, I think Aaron Renn is being a little too hard on Chicago. I’m sure my view of the city unduly weights its land use and transportation policies, but I do think it’s got more potential than Aaron gives it credit for. A lot of his article is based on this grim demographic observation, which I admit, is hard to stomach: Begin with Chicago’s population decline during the 2000s, an exodus of more than 200,000 people that wiped out the previous decade’s gains. Of the 15 largest cities in the United States in 2010, Chicago was the only one that lost population; indeed, it suffered the second-highest total loss of any city, sandwiched between first-place Detroit and third-place, hurricane-wrecked New Orleans. While New York’s and L.A.’s populations clocked in at record highs in 2010, Chicago’s dropped to a level not seen since 1910. Chicago is also being “Europeanized,” with poorer minorities leaving the center of the city and forced to its inner suburbs: 175,000 of those 200,000 lost people were black. Poor minorities abandoning the center to wealthy whites, while it has a lot of unfortunate aspects, doesn’t seem to me to be an altogether bad […]

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