The housing crisis

For 21st century urbanists, the hardest thing to remember about cities in 1950 is how bad the housing stock was. Lowe hardly mentions it because it’s the one thing every reader knew: old housing was awful. One New Haven resident complains about rehabilitation because his cold-water flat costs only $50 a month (equivalent to about $500 in 2024). To find conditions remarkable, she has to go to the worst streets of a Black ghetto:

Mary White, her husband and seven children were shoe-horned into a two-bedroom alley house that had no heat, electricity or hot water. They shared a backyard privy and faucet with neighbors

p. 215 (third printing, a Feb. 1968 hardcover)

Or to Pittsburgh:

Street and office lights used to burn all day when rivers vapors rose and held the region’s soft coal smoke in suspension over the city, casting a midnight gloom of smog throughout the day. Smog would turn office workers’ collars gray by noon; coughing and colds were an unhealthy commonplace in Pittsburgh. Even in the suburbs, housewives had to wash curtains weekly to cleanse them of soot. Airline pilots had a particular dread of landing at the Pittsburgh field with its “ceiling of black ink.”

p. 112

To me, and other 21st century skeptics, she would surely say what she says of Pittsburgh: “One needed to know the city as it had been to fully appreciate the extent of the change.” The steelman (or better, steelcity) case for urban renewal might be that it only looks like the worst villain around because it obliterated greater monsters.

What is urban renewal?

This was urban renewal. The enactment of urban renewal [in 1954] as an expansion of Title I, coming so hard on the heels of the scarcely tried redevelopment program, caused even greater public confusion. Most people used the terms interchangeably, an error…

p. 34

What is urban renewal? It is a bundle of powers and funds that afford cities a uniquely versatile tool for bringing about many different kinds of planned changes and improvements in their blighted areas and for carrying out comprehensive development goals. While it is difficult enough to bring about these changes with renewal, such improvements would generally be impossible without it.

p. 560

Lowe opens her book with a narrow, technical understanding of the phrase “urban renewal”, and closes it with a capacious one. But the several case studies that compose most of the book’s considerable girth focus principally on the replacement of slum housing and the rebuilding of downtowns on modernist lines. Her final case, New Haven, is a single 150-page chapter that communicates the impossible weight of the task. Heroic mayor Richard C. Lee and his lieutenant Ed Logue threw everything at his city’s problems – a downtown highway, code enforcement, extensive residential rehabilitation, school investments, community programming. In Lowe’s judgment, New Haven is the true standout of the era. But she still worries that it’s unsustainable:

Will someone keep New Haven moving when Lee is no longer Mayor? Or will the city ride along on recent improvements until it sinks once more into decay…?

p. 546

Half a century on, Wikipedia has a short article about Mayor Lee. The pitiful section on his legacy notes that the downtown highway he built – the Oak Street Connector – is now named the Richard C. Lee Highway. But highways are a sidenote in Lowe’s narrative – there’s much more about the various approaches to replacing slum housing.

To eliminate this omnipresent evil

With the newly liberal Congress that was elected in 1936 and the Supreme Court’s broadened definition, in 1937, of the federal responsibility for the public welfare, the way appeared clear and the purpose justified for using federally collected income taxes to help financially disabled cities to eliminate this omnipresent evil.

p. 26

The new Congress responded to the consensus that cities needed “positive powers – especially eminent domain and public funds – to acquire and demolish slum buildings, as was being done in some European countries.” It passed the Housing Act of 1937, which established power and purse for demolishing slums and building public housing.

But this approach was too expensive. So Alvin Hansen and Guy Greer filled in the gap with the idea of “write-down” financing:

1. With federal funding, a city buys slum dwellings via eminent domain , relocates the residents, and clears the land.
2. The city offers the land for sale below market rate (the “write-down”)
3. Developers create new, better, less-dense housing on the site

The willful disregard of economic information inherent in this formula is stunning. Not only were the new buildings economically inferior to the old; they were economically inferior to vacant land at market rates. The urban economy was screaming its need for density, but planners infected with the Howard–Corbusier mindset wear deaf to its calls.

Making Title I Work

Hansen and Greer’s write-down became Title I of the Housing Act of 1949, although urban renewal work did not start in most cities until the Housing Act of 1954 made more funding available. One city – nay, one man – dominates the history of Title I.

[Robert] Moses created in New York the biggest Title I program in the country – one with more results by 1960 than all other cities combined.

p. 48

Moses already had experience with redevelopment; his 1949 Stuyvesant Town was a popular success (although “planners and architectural critics” condemned its high density) on a similar model.

But the greater reason New York got so much done so fast is that Moses rewrote the Hansen-Greer formula, daring Washington to withhold funding. The New York method was more efficient:

1. A developer tells Robert Moses which piece of land he wants.
2. Robert Moses buys it using eminent domain and sells it – uncleared and for much less – to the developer (the “write-down”).
3. The developer milks the slum for a while, relocates the residents (maybe), and builds new, less-dense housing.

In 1957, federal administrator Albert Cole threatened publicly “to cut New York off from all federal housing funds”; Moses called his bluff in days. (p 91).

Lowe’s 50-page chapter on Moses is of unique interest because it predates Robert Caro’s The Power Broker by six years. But her biography and evaluation of the man are largely the same. In light of 2024’s re-appreciation of Moses and present-day concerns with finding people who can Get Things Done, her chapter’s conclusion (headed Men to Run Programs) is prescient:

Can a city today attract the talent needed to meet the demands of the new programs? Mediocrity at the technical-managerial level and lack of effective leadership at the top are major urban problems of today.

p. 109

Gut the heart

What New Haven intended to do with federal aid under the Housing Act was to virtually gut the heart of its downtown – removing the crazy quilt of “taxpayers,” cobblers’ shops, gin mills and hundred-year-old half-empty lofts and unattractive buildings.

p. 432

Along with Philadelphia and Pittsburgh, Lowe praises New Haven for having the boldness to reimagine its central business district (“A DARING CONCEPT”). But the thirty-page tale is one of debilitatingly slow fits and starts: finances are promised and lost, offers are made and retracted. In the end, even upgrading a slummy center into high-end office and hotel space cannot pencil out:

That New Haven’s downtown redevelopment actually went through seems to be a commentary on Roger Stevens’ unusual character… [If] Stevens had been a conventional developer or an ordinary man, he would surely have walked away from the project long ago (as his close advisors had counseled). Even with redevelopment aid, the project was not a market place transaction and could not be done through conventional financing mechanisms…

Where special financial reserves or guarantees were available, things got built.

p. 463

The more hopeful signs

Among the many virtues of extemporaneous reading is the chance to view the past as future. Lowe could hardly have picked a worse time to offer predictions about the future of cities. Just two months after my volume was printed, Martin Luther King, Jr.’s assassination lit the powder keg that 1960s urbanists had only half-acknowledged.

But for our purposes, her timing is ideal. She tries to see a hopeful future, with urban renewal dogging the heels of the spreading slums and abating their evils with clean, public or affordable housing. But even in 1967, doubts have crept in. She worried about the lack of talent and commitment among mayors and staff. “Urban renewal”, tightly defined in the 1950s, has opened out to encompass almost any urban policy.

There are only inklings, glimmers of the post-1970 urban crisis. She writes about “juvenile delinquency”, not “crime.” Drugs barely appear; firearms not at all. She has no idea that landlords will soon set the match to their own buildings. In the strangest passage of the book, she sees the colors of the new and terrible dawn and praises it as hope:

Many landlords found it cheaper to vacate a building than to continue operating a slum… The boarded-up houses, and the growing vacancy rate in these neighborhoods (almost double [Philadelphia’s] average of 6 per cent for rental housing) were among the more hopeful signs in the blighted inner city. The impressive improvement in housing revealed by the 1960 census could be attributed in part to this “slum cleansing operation.” When the gray areas are cleared, as called for by the comprehensive plan, it is hoped that the costs, both in human and site acquisition terms, would be greatly reduced.

p. 360

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[In] Mumbai, there is a specific type of architect who has become the interpreter of regulations and there are those architects who are aestheticians working on building skins. As much as there is convenience in this split, it has taken away a big part of the agency of the architects in the city…

One of the ways to change this situation is to start looking at architecture also as urban design exercise. Through the discipline of Urban Design…there is great potential to initiate dialogues and processes for neighbourhood-scale changes in the city.

(de)Coding Mumbai, p. 272

Medico-administrative era

Following Michel Foucault, the authors describe the origins of planning in British Bombay, triggered by the outbreak of the Bubonic Plague, which spread from inland China through Hong Kong and to ports around the world.

The Indian subcontinent suffered an estimated 12 million deaths, most of them in Bombay Province… According to some accounts, close to 2,000 people died every week in the city for over a year and more than 8,50,000 inhabitants fled the city… It is under these dire conditions that the provincial state established the Bombay Improvement Trust in 1898.

(de)Coding Mumbai, p. 23

The Trust widened roads to bring in clean sea air (although Pasteur had established the germ theory of disease, old ideas lingered). It demolished slums, replacing them with multistory, modern housing blocks. And it used land readjustment (called Town Planning Schemes in India) to expand the city.

What Padora and Khemalapure add to this well-established history is how the granular text of the new regulatory documents dictated the form of now-historic neighborhoods.

Planning era

The authors skip ahead to the post-Independence era, which they call “urban sprawl.” For American usage, that’s the wrong phrase – the era was characterized by a legalistic approach to planning and the coexistence of both hostility to new migrants and a concern with equity and redistribution. The principle underlying those contradictory impulses was an overweening respect for planners and planning. Planners “knew” that cities should be moderately-sized just as they “knew” the necessities of life for the very poor.

To achieve both ends, planners discouraged high-rise growth in central Mumbai, with catastrophic consequences: incredibly high formal housing costs and about half the population living in unregulated slums.

One project the books covers is the World Bank’s “sites and services” neighborhood in Charkop, which Alain Bertaud helped design.

Market-oriented era

Since India’s turn toward market ideas in 1991, Mumbai regulations have begun to relax. But the relaxation is far from laissez-faire. Instead, the regulatory regime creates a high market value for floor space, which it then monetizes directly and indirectly.

By selling FSI, Mumbai’s regulators incentivize rehabilitation, slum replacement, preservation via transferable development rights (TDRs), private open space, and other priorities. The obvious tradeoff is that development is more expensive than it would be under a regime without FSI. But
Padora and Khemalapure are more interested in drawing our attention to another tradeoff: regulators lose their leverage to regulate the interface between private and public space. Of one project, they write:

The project is a clear example of how suburban areas have been utilized as pools to balance TDRs… The bye-laws and design of such projects however, make no attempt to rethink the high-speed interface between the buildings, between the neighboring plots and the adjacent highway.

(de)Coding Mumbai, p. 226

The high value also distorts construction toward uses that do not count against the Floor Space Index (FSI), such as structured parking. In summary, the authors condemn this Byzantine system:

Since 1991, FSI has become a form of currency that is used instead of monetary compensation by the State in Mumbai.

(de)Coding Mumbai, p. 249

New directions?

The authors spend just a few pages looking to the future – the first quote in this review is from that section. Theirs is more glimpse of the future than a vision. Clearly, they wish architects were doing something richer than regulatory interpretation and exterior decoration. The first step in that direction is to illuminate the current dispensation, and the authors have done so admirably.

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Continuing this series of book reviews on Jane Jacobs’ works, I now turn to Cities and the Wealth of Nations. But there is already a fantastic piece on the Market Urbanism website, by Matthew Robare, who reviews this book and outlines what Jacobs overlooks in her analysis. So, this piece takes a slightly different angle: inspired by (but not limited to) Jacobs’ ideas, it aims to highlight what mayors, governors and urban policymakers could do differently if they are serious about developing their cities into economic powerhouses. Here are some of the most important takeaways from this book and also how they can be expanded upon.

(1) Focus on cultivating import-replacement

The economies of cities do not grow out of nothing. They grow by adding productive new forms of work to old ones, by innovating, and by being cultivators of new ideas and techniques. This process of cataclysmic growth – that Jane Jacobs describes as ‘import-replacement – occurs when a city takes its existing imports and builds upon them, either improving its production through lowering costs, increasing quality, or innovating. The market for these additional goods can either be found within the city itself or serves to expand the city’s exports. These exports, in turn, bring in additional resources to either acquire additional imports or be reinvested into fuelling the processes that fuel import-replacement. Not for nothing does Jacobs describe import-replacement as a ‘cataclysmic’ process – these changes often happen over a very short period and can bring about a rapid influx of people, ideas and capital. We see this in New York City, which grew from half a million residents in 1850 to over 3.4 million at the dawn of the twentieth century. Detroit went from having 250,000 residents in 1900 to a peak of 1.8 million by 1950. Delhi went from a population of 1.4 million in 1950 to almost 33 million in its larger metropolitan area today. That import-replacement is such a simple idea also makes it one of the most crucial to understand for policymakers. At the end of the day, a city can provide everything it wants in terms of amenities, sprawling parks, leisure centres and cultural venues, but without that fundamental process of import-replacement taking place, an urban agglomeration will not grow and will be confined to decline. To quote Jacobs: ‘artificial symptoms of prosperity or a “good image” do not revitalize a city, but only explicit economic growth processes for which there are no substitutes.’ (The Economy of Cities, Pg 200).

So much for that idea; it is clear that import-replacement must be at the heart of any policy for urban development. How can policymakers leverage this idea when it seemingly depends so much on individual decisions made by companies and entrepreneurs? The first thing to address is what are the barriers that prevent economic import-replacement? Are land-use patterns overly strict and restrictive to new and innovative types of industry? Central to the idea of import-replacement is the idea that new forms of businesses, processes and industries will arise that cannot be foreseen in advance. It is therefore crucial that land-use regulation permits new forms of industries to emerge.

The process that Jacobs describes transcends individual policymakers, instead relying on decisions by financial institutions, entrepreneurs, and thrifty individuals. This should not lead to hopelessness. I would argue (and Jacobs, through her expansive uses of historical examples) that enterprise and trade come very naturally to human beings if the conditions are right. Whilst this does not guarantee that any city can become an economic powerhouse, since important factors including geography, human capital, and chance also play an important role, almost every region contains a dominant urban agglomeration. By minimising barriers to trade and commerce in these areas, ensuring regulation, taxes and land-use is conducive to growth rather than acting as a resistor, cities can begin to tap into the power of import-replacement and grow their economies and those of the regions surrounding them.

Finally, where I diverge from the libertarian-purist perspective is that I argue urban policymakers can play an active role in cultivating growth. For example, by creating forums for entrepreneurs to come together and exchange ideas, encouraging universities to collaborate with businesses so that jobs are created within the city (see HEC Paris’ incubator), and making sure the basic needs of the city (sanitation, safety, etc) are met, cities can help to kick-start the process of import-replacement.

One policy that seldom works, however, is offering large subsidies to companies to locate in a city – often in the form of tax breaks or land grants. There is significant literature outlining how this greatly distorts the allocation of resources on a national (and international) scale. Yet the idea is nonetheless tempting to policymakers if they think it’ll bring regional benefits. The research on this does not suggest this is the case – as highlighted in a recent essay published by the Center for American Progress. Jacobs provides a clear reason for why this is the case in both The Economy of Cities and Cities and the Wealth of Nations. Put simply, big businesses which are ‘transplanted’ into smaller cities do not bring about import-replacement because they are already tightly vertically integrated. Smaller businesses, however, are more likely to tap into an existing or nascent eco-system of other businesses – in a city or elsewhere – to produce its goods. This greatly increases the likelihood of innovation and new techniques being adopted as competitors strive to improve quality and lower prices. Money spent on providing large subsidies can therefore be put to much more effective use if it is instead returned to businesses as a tax cut or channelled into the other factors that encourage import-replacement.

(2) Look at what your city does well

It is not the case that cities can purchase development by simply luring in companies, through tax breaks or other means, to set up transplants in their regions. ‘Development cannot be given, it has to be done. It is a process, not a collection of capital goods,’ notes Jane Jacobs on page 119 of Cities and the Wealth of Nations. For urban policymakers, the lesson that can be drawn from this is that the focus should be placed on the existing things a city or metropolitan area does well. It would be nonsensical for a city like Fort Wayne, Indiana, to spend billions of dollars trying to become the next Silicon Valley. Agglomeration effects matter and remain a central part of how import-replacement happens. For more effective, for small and medium-sized, is to focus on what they already do well and aim to cultivate those industries. This is less difficult than it seems for again, individuals and businesses have a remarkable ability to innovate and lead the import-replacement process themselves if the conditions are right. For urban policymakers, the focus should therefore be on identifying bottlenecks in cooperation. Are land prices prohibitive to the creation of new industries and could zoning reform unlock additional growth? Is the city the kind of place that would attract potential talent, or is crime, housing availability and educational provision undermining its ability to do so? Again, whilst actively picking and choosing winners and losers seldom works, there is an active role that policymakers can play in helping to cultivate growth in existing sectors that are performing well. Cities could partner with chambers of commerce to ensure that businessmen are connected, and ideas spread faster. Collaboration with banks and financial institutions could provide seed money for new businesses to emerge. By first focusing on the basics, then looking at the particular areas of success and finding ways to encourage them further, a city can help kick-start the growth-replacement process.

(3) Beware of over-specialisation

Import-replacement depends on specialisation. Both Jacobs and later, Edward Glaeser (in Triumph of the City) highlight the importance of urban agglomerations which increase the spread of ideas and allow firms to produce new goods and ideas without having to start from scratch. Chris Miller’s Chip Wars provides a vivid description of how this process played out in Silicon Valley, noting how specialisation allows each company to focus on adding value at one specific part of the supply chain, to the point where countless companies now focus solely on chip design, others, like GlobalFoundries focus on manufacturing, yet others on marketing, transportation, the production of equipment. It is far easier to start a company in an environment where not every aspect of the supply chain needs to be replicated and companies instead tap into an existing eco-system. The odds of innovation grow significantly, as a result of lower barriers of entry.

Except over-specialisation is at cross-purposes with the long-term success of a city, if it means that it cannot recover or surmount shocks in global supply and demand. Take the classic example of Detroit, which specialised very heavily in automobile production over the first half of the twentieth century, this growth almost entirely led by private enterprise. When automation and increased foreign competition led to a decline in the Motor City’s primary industry, workers had few alternatives. Many just left, leading to a precipitous population decline from 1.8 million to just over 640,000 today.

I will again stress that a lot of the economic dynamics occurring within a city are not things that policymakers can directly control. Subsidies might work in the short term, but as noted above, their success is very limited in the long run and the money might instead have been returned to residents in the form of a tax cut. Furthermore, no single policy prescription will work for all cities, since each faces a unique set of problems and challenges and mayors must look closely at the problems confronting their particular city.

There are nevertheless some takeaways from Jacobs’ works that might apply here and that mayors and other urban leaders could take to their cities. First is that space and layout matter. Jacobs presents a view of cities that very heavily emphasises the importance of walkability and access. I would push back a little and say that perfect walkability is not always necessary. Yet enterprises and households should be in relative proximity to each other to foster greater exchange of ideas and collaboration. A fifteen-minute drive on the highway might not make a difference. A fifty-minute drive in chock-a-block traffic would. The other ingredients to fostering urban diversity (still allowing for specialisation but in various sectors) include mixed uses of land, sufficient density to provide businesses with customers, older buildings to allow for experimentation (new or experimental businesses often can’t afford new units where costs are very high), and smaller blocks to allow for more street frontage.

Jacobs’ analysis of the factors cultivating urban economic diversity is sound, but it requires further expansion if it is to apply to traditional industry and the new creative industries. In addition to these factors, cities and states should also ensure their processes allow for flexibility and collaboration with regard to permitting and other legislation; they should ensure their processes are clear and transparent, and they should keep costs at a minimum.

Simply wishing for prosperity won’t make it so. The reality is that urban success depends on governance, ideas, and some degree of luck. But another remarkable fact emerges from the literature of Jacobs’ and others I have buried myself in over the last few weeks: human beings have an incredible ability to collaborate and innovate if left to do so. It’s a hopeful takeaway, for it means that success doesn’t depend on policymakers’ abilities to play economic planners and run a city. Focus on the basics, eliminate barriers to growth, advocate for your city, and you may well turn the odds slightly in its favour.

The post Lessons from Cities and the Wealth of Nations: a manual for urban policymakers appeared first on Market Urbanism.

At the heart of Jane Jacobs’ The Economy of Cities is a simple idea: cities are the basic unit of economic growth. Our prosperity depends on the ability of cities to grow and renew themselves; neither nation nor civilisation can thrive without cities performing this vital function of growing our economies and cultivating new, and innovative, uses for capital and resources. It’s a strikingly simple message, yet it’s so easily and often forgotten and overlooked.

Everything we have, we owe to cities. Everything. Consider even the most basic goods: the food staples that sustain life on earth and which in the affluent society in which we now reside, abound to the point where obesity has become one of the leading causes of illness. Obesity sure is a very real problem and one we ought to work to resolve (probably through better education and cutting those intense sugar subsidies). Yet this fact alone is striking! For much of mankind’s collective history, the story looked very different: man (and it usually was a man) would spend twelve or maybe more hours roaming around in the wild to gather sufficient food to survive. Our lives looked no different to the other animals with which we share the earth. An extract from The Economy of Cities:

‘Wild animals are strictly limited in their resources by natural resources, including other animals on which they feed. But this is because any given species of animal, except man, uses directly only a few resources and uses them indefinitely.’

What changed? Anthropologists, economists, and historians will tell you it was the Agricultural Revolution, which occurred when man began to settle in small towns and cultivate the agricultural food staples that continue to make up the bulk of our diet: wheat, barley, rice, corn, and animal food products. But this merely raises another question: how did the Agricultural Revolution that took place ten millennia ago come into being? Jane Jacobs’ (very compellingly argued) answer is that we’ve got it all backwards: the city is what makes civilisation possible. Agriculture, and everything that proceeded from it, is merely an export of the city, just like the factories, automobiles, and microchips which first arise in cities and are then spun out into a region’s wider territory.

Here’s how it might have happened: at some point in the distant past, the world was parcelled up into territories controlled by various packs of hunter-gatherers. But hunter-gatherers need tools to hunt. Those tools, in turn, are produced by a couple of basic commodities: at first primitive stone tools, then increasingly complex spears made from obsidian and glass, and finally weapons made with copper and iron. As our tools became increasingly complex, their production necessitated resources obtained from particular locations – not available everywhere by obtainable through trade. Hence the rise of the world’s first cities: places where people would come together and barter for those primary sources of production, necessitating permanent civilisations. The surplus from trade, captured and enabled by the city, could then be allocated to new and innovative uses of labour.

Animals, for example, were held for the local trading population, at first for immediate consumption, but then it made sense, as the surplus increased, to breed them in new and innovative ways. Hence the rise of animal agriculture – first in cities, then as land became more valuable, spun off into the surrounding countryside. So too for the seeds which led to plant agriculture: initially for immediate consumption, their storage (and the surplus entailed) permitted experimentation with cross-pollination and paved the way for more advanced plant agriculture. Agriculture, Jacobs shows us, was perhaps the very first significant export spun off from cities!

Jacobs herself notes the idea is surprising, for it completely reverses the typical chain of cause-and-effect that we are so familiar with and that comes so intuitively. After all, in our everyday observations, it is rural areas which become developed into cities, hence why we might believe that first came agriculture. But this cannot be the case: further archaeological research has indeed confirmed Jacobs’ theories, showing that large-scale urban centres in Mesoamerica and Mesopotamia (see the example of Göbekli Tepe) preceded the agricultural revolution. Civilisation, made possible by the agricultural revolution, quite literally emerged with the advent of the world’s first cities.

The striking thing is that this is still the case today. Just like in the earliest cities, which permitted innovation when new work was added to old work and advancements in technique were made – quite literally creating new industries and products through the experimentation that surplus permits – cities continue to be the base of all human innovation and ingenuity. For it is in the city that ideas permeate most effectively, that humans collaborate and learn from one another, building on previous knowledge and success.

For new firms to start, they require a rich ecosystem of existing knowledge on which to base new ideas and innovation. They require capital to turn ideas into reality, that capital being just one of the many exports that cities provide. In turn, as innovations and products emerge in cities, these are added to a city’s exports, growing its markets for additional goods imported from elsewhere.

Every city is, in this way, deeply interconnected and reliant on the success of the cities that came before. What’s curious is that Jacobs doesn’t define the city in terms of scale; rather, to be considered a city (as opposed to a large town), an agglomeration must have the capacity for economic self-generation – in other words, it must be able to sustain itself through this innovative process of adding new work to old work, innovating at every increment.

There is no end to the potential growth that might emerge from cities. In Jacobs’ words: ‘once we stopped living like other animals, on what nature provided us ready-made, we began riding a tiger we do not dare dismount, but we also began opening up new resources – unlimited resources except as they may be limited by economic stagnation.’ The potential growth stemming from cities is precisely because they draw on more than the immediate resources provided in their vicinity. Rather, cities grow, replacing imports and imports, through human ingenuity, talent and the application of ideas to concrete problems.

It has often been proclaimed, particularly in the environmentalist movement, just like the Malthusians that came before, that the human race faces an impending destruction for there comes a point at which we simply run out of resources. That is not the case, when one understands the process that Jacobs is describing. Planet Earth contains almost the same resources that it did twelve millennia ago when absolute poverty was the rule everywhere. In bringing millions of people together in one place and setting in motion this process of constant economic renewal and improvement, wealth was created as ideas about how to reorganise those same resources spread so much faster, setting off a process of ‘cataclysmic reciprocal growth.’

It’s hard to let go of old ideas in favour of new, sounder ones, especially when they are so deeply entrenched. Yet despite there being evidence, quite literally all around us, that it is cities that create growth, policy remains firmly grounded in the old paradigm. Policies aimed at spreading or redistributing wealth across nations as a way of developing them achieve nothing of the sort. It might provide temporary relief (more likely the gains will be captured by some vested interest) but does little to kickstart the self-generating, reciprocating growth process that allows cities to grow. Nor can industrial policy, subsidies to lure big enterprises, or tariff barriers create the growth or desired effects. Big companies, Jacobs goes at length to explain, are highly efficient because they are very vertically integrated. Yet the real growth engine for cities is smaller companies, operating with some level of slack that permits them to expand into new markets and carry out the process of adding new work to old (or in other words, further specialisation).

Then there is the countryside and rural areas. The Economy of Cities is brilliant because Jacobs’ shows us that their development is entirely dependent on the development of cities, and not the other way around. Cities, and the activities that occur within, are what produce the growth that is then expanded out into the countryside as space becomes scarce and new innovative uses for capital and land are found in cities. The success of our cities is therefore not a zero-sum game, it is something of importance to every single one of us.

Politicians, city planners and those in the development space ought to pay close attention to these. Growth cannot be bought; the only way to achieve it is to focus on cultivating its underlying drivers.

The post Lessons from Jane Jacobs on The Economy of Cities appeared first on Market Urbanism.

Adam Louis Sebastian Lehodey, the author of this collection of essays, studies philosophy and economics on the dual degree between Columbia University and SciencesPo Paris. Having grown up between London and Paris, he is energised by the questions of urban economics, the role of the metropolis in the global economy, urban governance and cities as spontaneous order. He works as an Applied Research Intern at the Mercatus Center.

Since man is a political animal, and an intensely social existence is a necessary condition for his flourishing, then it follows that the city is the best form of spatial organisation. In the city arises a form of synergy, the whole being greater than the sum of its parts, for the remarkable thing about cities is that they tap into the brimming potential of every human being. In nowhere but the city can one find such a variety of human ingenuity, cooperation, culture and ideas. The challenge for cities is that they operate on their own logic. Cities are one of the best illustrations of spontaneous order. The city in history did not emerge as the result of a rational plan; rather, what the city represents is the physical manifestation of millions of individuals making decisions about where to locate their homes, carry out economic transactions, and form intricate social webs. This reality is difficult to reconcile with our modern preference for scientific positivism and rationalism. But for the Polis to flourish, it must be properly understood by the countless planners, reformers, politicians and the larger body of citizens inhabiting the space.

Enter Jane Jacobs. As the story of cities reached a point at which the assault on them seemed so great, so forceful and so fierce that it seemed there was no turning back, Jacobs, in her Magnum Opus ‘The Death and Life of Great American Cities,’ became one of their staunchest advocates, reminding us of their role in cultivating diversity and progress whilst also underscoring the logic on which they operate. It has been over half a century since Jacobs published this seminal work of literature. Its effects have certainly been felt, ushering in a shift in how planners, developers and policymakers alike approach urban planning, shifting their focus onto mixed-use developments, more walkable downtowns, and the cultivation of metropolitan diversity. Yet this book was never intended as an obscure manual for city planners and government mandarins. Rather it should be read as a robust defence of dense urban living aimed at underscoring its importance to overall human flourishing. This essay posits that the uses of cities go far beyond the economic dimension – they extend themselves into forging deep and meaningful human ties, stimulating intellectual and spiritual advancement, and playing an important role in what makes humans human. Revisiting The Death and Life of Great American Cities allows us to see how this continues to be true today and why the vitality and success of our cities are of importance to all who care about the success and flourishing of the human species.

Economic dimension of cities

Addressing the obvious first, very little of the material advancement that humanity has seen throughout its existence would be possible were it not for the economic diversity that cities help to cultivate. If this argument is made explicit at several points throughout the Death and Life of American Cities, it is implicit at every point throughout the book. In connecting millions of people in one place, the city acts as a giant labour market, allowing employers to find talent and workers to make a living. Cities are what translate abstract supply and demand graphs into tangible economic exchange, allowing buyers and sellers to convalesce in one place and permitting mutually beneficial exchange to take place. In a chapter entitled ‘The Need for Concentration,’ Jacobs highlights the role that high densities play in generating economic diversity, namely, that at low densities, businesses offering certain specialised goods could never afford to sustain themselves for there simply wouldn’t be enough demand. The calculation is reversed at higher densities. ‘By its nature,’ she writes, ‘the metropolis provides what otherwise could be given only by travelling; namely, the strange.’ Concentration goes further than providing businesses with consumers. Businesses do not exist in a vacuum, they exist and rely on an intricate network of support from suppliers, financial institutions, vendors and other interested stakeholders, all of which must be derived from somewhere. Connecting all of these people in one place greatly increases efficiencies and further allows for the quick transmission of ideas and innovation. This idea might further be connected with that of Joseph Heinrich’s in chapter 12 of his 2016 book, The Secret to Our Success. There exist many great minds whose discoveries have transformed the course of our civilisation (Edison, Kepler, and Einstein, to give a few examples). But progress and advancement do not depend on these great minds alone, what is needed is the broader diffusion and integration of these ideas into the society at large. Genius alone won’t suffice, as Heinrich’s anthropological examples on Tasmania demonstrate; that long-disconnected island, isolated from the progress and ideas of the broader society, regressed significantly during that time when it was disconnected. Cities, if permitted to do so, have the opposite effect, serving as both cultivators and connectors of new ideas that otherwise would never have been.

Context in which The Death and Life of Great American Cities Emerged

Jacobs goes to great lengths to show why (then) contemporary approaches to urban planning and policy were greatly undermining the role of cities in connecting and cultivating economic diversity. She opens her book with the line: ‘This book is an attack on current city planning and rebuilding.’ That planning and rebuilding to which she was referring in 1961, and to some extent still present to this day despite the influence her works have had, was based on the belief that cities, despite their economic advantages, were not desirable places to live and were instead hotbeds of vice and criminality. Spearheaded by British urban planner Ebenezer Howard, the Garden City proposed an alternative to dense urban growth, designating permitted land uses in specific areas, segregating residential, commercial and industrial uses, and most importantly suppressing densities so they could never rise above a certain point. A slightly amended version of these ideas came in the form of Le Corbusier’s Radiant City (look it up if you’re not already familiar – it’s striking!); modernism in physical form which quickly sprang from the academic to the physical realm with the construction of vast swathes of housing projects across the United States, Soviet Union and beyond. Adding to the malaise of the city was the City Beautiful movement, kickstarted by the Columbian Exposition of 1893 which began a movement of concentrating civic buildings all in one place. The proponents of these three types of new urbanism against which Jacobs takes aim were rarely ill-intentioned, she stresses throughout. However, their ideas were based on a fundamental misunderstanding of what led to successful economic diversity in cities.

For a city to succeed, grow and thrive, mixed-use of both commerce and people is needed so that an area can sustain itself uniformly throughout the day. For new ideas and businesses to emerge and take hold, the city must contain a variety of both new and old units; old units allowing economically risky ideas or with low overheads to exist. For neighbourhoods to improve, change must be gradual rather than cataclysmic, ensuring that communities and neighbourhoods have the time to form robustly. Density, more than anything, matters, but it is essential that this diversity exists in a way that the city can make use of. Density, unless accompanied by mixed-uses, short blocks which permit street life and sustain a variety of economic uses, means very little. From that effective density (that is, a density that is effective because it is combined with reasons for people to intermingle and interact with people outside of their usual social circles, if even lightly), stems all of the other benefits that cities confer: strong communities, safer streets as there will be many people to watch over them, new businesses which can tap into the city’s broader resources, and the opportunity for spontaneous and unplanned social interaction.

In response to the stultifying controls that have been imposed on our cities in the form of planning, land use, parking requirements, and density thresholds (among others) has emerged a vital movement of pro-housing advocates in the post-Jacobs era. The modern YIMBY, or Yes-In-My-Backyard, movement has rightly focussed on reducing controls and ensuring we build as much as possible, wherever possible. Condominiums, high-rises, sprawling suburban developments; new developments in any form are welcomed by YIMBYs as a means of reducing housing costs and enabling people to tap into the untapped potential that cities offer. And rightly so: pro-housing advocates often refer to the so-called ‘housing theory of everything,’ which links a lack of affordable housing to a plethora of social issues, including poverty, lack of access to education, and environmental degradation. There are strong reasons to be sympathetic to these arguments: increasing housing affordability benefits not just those who are already in cities, so too does it permit thousands more to tap into the places where they can be most productive, tap into, and create new opportunities. But Jane Jacobs offers something for us YIMBYs too, by showing us that our cities offer so much more than just economic benefits. But this is only so if urban development takes a particular form.

Cities as cultivators of diversity

‘A city’s greatest asset,’ Jacobs declares, is its ‘very wholeness in bringing together people with communities of interest.’ Cities play a central role in cultivating civic life, they allow individuals with similar interests to come in a way and interact spontaneously in a way that’s never possible at smaller densities. In suburbia, human interaction is governed by ‘togetherness,’ the requirement that much shall be shared,’ amongst residents ‘or else they must settle for lack of contact.’ Parents attend the same PTA meetings, soccer games, and birthday parties. The bar for friendship in suburbia is necessarily higher, for it entails a much greater level of commitment and intimacy. ‘Inevitably the outcome is one or the other; it has to be; and either has distressing results.’ Cities, and particularly lively sidewalks, permit another type of civic life to emerge: one where humans are loosely connected and can then choose to develop these relationships further if they so choose. Jacobs provides vivid examples from her street: the local grocers that one can ask for favours like holding keys, individuals who watch over the children of others and keep them out of trouble, ‘connectors’ who know many individuals loosely and, in connecting them, bring about the political fabric required for self-governance.

One critique levelled at Jacobs’ urban vision is that it is overly rose-tinted. This is not the case: in New York, in London, in Paris, there continue to exist pockets of urban life with a strong underlying social fabric, needed now more than ever in an age where people are increasingly inward-looking as a result of social media. Surrounding the Great Cities is another model: areas like the Clarendon neighbourhood in Virginia are a good illustration of how we can tap into the benefits of density and concentration whilst still allowing those in the suburbs to tap into these vibrant areas.

The city, notes Aristotle in Book 3 of Politics, ‘must be regarded not just for the sake of living together,’ but rather ‘for the sake of noble action.’ Jacobs is in many ways an intellectual heir of this thought: presenting why the spatial dimension matters in how we live, showing how concentration and lively mixed-use sidewalks cultivate further diversity, progress and strong civic life, then underscoring why not any form of planning will do: only that which permits for spontaneous use cases, that is not overly regimented, and most of all allow for cross-use and walkability, will suffice.

Jacobs and the defence of cities

The genius of Jane Jacobs is that her critique, in The Death and Life of Great American Cities, is not limited to that. This work of literature, and the richness in which her prose and descriptions come together to form an image of the city truly do make it a work of literature, fundamentally challenges the status quo and persuades us as to why urban life is so desirable. Americans have come to view the American Dream and suburban life with a white picket fence as synonymous. Jacobs urges us to look beyond that, to recognise that the city is not a place we should be resigned to living in because of the economic effects. Rather, The Death and Life of Great American Cities is a reminder of how the diversity of cities is just a reflection of the individuality and uniqueness inherent in every one of us.

The post The Death and Life of Great American Cities, Revisited appeared first on Market Urbanism.

Like other authors, Marohn and Herriges discuss the history of downzoning. For example, in Somerville, Mass., a middle-class suburb of Boston with 80,000 residents, only 22 houses conform to the city’s own zoning code. And in San Francisco, 54 percent of homes are in buildings that could not legally be built today. In Manhattan, 40 percent of buildings are nonconforming. Why? Because zoning has become steadily more restrictive over time, making new housing difficult to build.

Where development occurs, it is in a tiny fraction of the region’s neighborhoods- usually, either at the outermost fringe of suburbia or in a few dense urban neighborhoods. For example, in Hennepin County, Minnesota (Minneapolis and its inner suburbs) 75 percent of all housing units built between 2014 and 2019 were in 11 percent of the county’s neighborhoods. In Cuyahoga County, Ohio (Cleveland and its inner suburbs) 75 percent of housing units were built in under 5 percent of the county’s neighborhoods.

Marohn and Herriges also critique some anti-housing arguments. For example, one common argument is that only public housing is useful, because the very poor will never be served by the market. They correctly respond that even if there will always be some people in need of government assistance, adequate housing supply will reduce that number. They write that housing policy “will look very different in a situation where the market is failing to serve 5% of people with adequate housing versus a situation where the market is failing 20% or 30%. In the latter scenario, choices get harder, resources more strained, and decisions about funding priorities become more painful and zero-sum.” (p. 136) They further note that Vienna’s widely-praised program of extensive public housing is infeasible without tax increases; the program is funded through a local income tax, and cannot easily be copied in the U.S. because Vienna’s municipal government owns an ample amount of land.

Like Gray and Caplan, the authors are basically YIMBYs*- that is, they favor less zoning and more housing. But they are skeptical about the ability of the market as currently structured to provide a significant amount of housing, In particular, they quote one developer’s statement that “There are only so many towers and multifamily things we can build. There’s a limit to the workforce, permitting, the availability of cranes.” But I’m not sure why there should be a fixed supply of construction workers or cranes; presumably, manufacturers would make more cranes if demand was adequate, and employers could hire and train more construction workers.

So the authors favor a strategy of “incremental development”- that no neighborhood should experience radical change, but every neighborhood would allow modest change. For example, they write that “for a neighborhood of single-family homes, the next increment must include duplexes and backyard cottages.” (p. 157)

But this argument makes me wonder: if reliance on large-scale developers won’t produce enough housing units to keep costs down, why would reliance on homeowners’ willingness to build a duplex here and there?

The authors suggest that South Bend, Indiana, is an appropriate role model. In South Bend, government introduced pre-approved building templates to make small-scale development easier, and creates technical assistance for small-scale developers. But if I read Census data correctly, it seems like about 6 percent of South Bend’s housing has been added since 2010- not a terrible result, but not a significantly higher number than other Indiana cities like Bloomington, Fort Wayne and Evansville.

Marohn and Herriges have proposed a program of modest improvements- and this program might be the best option that is politically feasible in most of North America. But is this program strong enough to bring rents down? I doubt it.

*YIMBY is an acronym for “Yes In My Back Yard” and is often used to describe people who favor more housing.

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As a pro-housing person, I’m predisposed to find new reasons to love HIAHP (you can read my version of the “housing theory of everything” on Discourse). But I came away thinking that housing is very useful for preventing homelessness while not necessarily a solution to the penumbra of problems surrounding it: mental illness, drug abuse, public disorder, and so on.

Also read: Michael Lewyn’s earlier review in this space.

HIAHP’s strengths

Homelessness is a Housing Problem is structured around a series of graphs showing all the things that fail to explain regional variation in homelessness. These aren’t formal statistical tests, and of course it’s possible for relationships like these to reverse themselves in the presence of confounding factors, but the overall picture is nonetheless convincing: homelessness isn’t just an outgrowth of the broader social problems we associate with it.

The other great strength of HIAHP is its accessibility: aside from the second half of Chapter 1, which lays out their methodology, the authors keep everything at a ninth-grade reading level. This isn’t, and isn’t intended to be, a book for scholars, and you can give a copy to your aunt or your mayor and not worry that they’ll get bored or confused.

HIAHP’s weaknesses

Against this parade of failed explanations, the authors present a powerful-looking graph of a clear positive relationship between housing costs and the rate of homelessness.

Colburn and Aldern’s simple graphs are persuasive in the negative. But positive proof requires more than a positive correlation – indeed, more than statistics alone. And it certainly requires correctly-executed statistics. Look again at the chart: instead of giving each city and county one data point, each gets 13. They differ slightly (2007 rent versus 2007 PIT count, and so on), but only slightly – they are strongly autocorrelated. Statistically, one would need to cluster the standard errors. (I emailed Colburn to ask about this problem and asked for his data; he did not respond.)

So those skinny error bands in the plots? They’re wrong. (The slope and R squared may be fine, though.) The whole relationship is much less certain than the authors claim. It’s very easy to imagine confounding omitted variables that might explain away the correlation via some intermediate factor or third cause. I shouldn’t need to say this, but correlation isn’t causation.

My disappointments ran beyond the statistics, though. I had hoped to learn from HIAHP the personal, micro-level narratives that links high housing costs to homelessness. Even in cheap cities, low-end rent isn’t so low that people without a regular income can afford an apartment of their own.

Are marginally-housed people in Birmingham and Buffalo renting rooms? Staying for free with family members? As Alexander the Grate said, everyone has “some degree of shelter insecurity”; it’s not a binary condition. There’s a huge liminal range between “leaseholder” and “homeless”; there must be cross-sectional differences in that range that explain why Buffalo can house people who Boston can’t.

HIAHP could have been a persuasive, useful addition to the literature either as a solid statistical work or as a qualitative exploration of the mechanisms linking market prices to homelessness. It falls well short of both.

Solutions?

The authors toss out some favored ideas for addressing homelessness. But without a micro-level understanding of low-end housing in cheap cities, it’s hard to evaluate these ideas.

Nor do the authors subject their suggested solutions, like expanding the portion of the housing stock “decouple[d] from the market”, to even the simple correlation tests that they used in the diagnostic part of the book. It’s plausible, given their diagnosis, that non-market housing is a major part of the cure. But it’s not obvious, nor is it a novel idea, and testing the performance of that idea would seem in keeping with the book’s approach.

In fairness, a market-only approach is equally suspect. The authors claim that “housing doesn’t magically ‘filter’ or trickle down to low-income households” (p. 134). Aside from the “magically” part, this is exactly what happens in a well-functioning housing market! It would be interesting to look at the residences of marginally-housed people in low-homelessness cities: I’d wager that more of them live in structures that were originally built to serve the top 1/3 of the market than originally “de-commodified”. But that’s a guess – I don’t know. More and better research is apparently needed to take us beyond solutions to homelessness with the epistemic status of a blog post.

The post Book Review: HIAHP appeared first on Market Urbanism.

In particular, the book’s third section on reforms is outstanding. It starts with a slate of policy proposals typical to this kind of text, but quickly goes much farther afield. After suggested policy changes, we’re invited to consider a world without zoning via an in-depth look at Houston’s land use regime. Here we’re treated to both an explanation of how it works and the unique political history that left the city unsaddled with zoning. Nolan goes on to close his recommendations with a call to reimagine what a city planner could be in a post-zoning American city; a call that, as a former New York City planner, he is uniquely fit to make.

Aside from the content, this book deserves points for prose. Arbitrary Lines is blessedly readable. The writing flows and the varied anecdotes interspersed throughout the book make it feel less like a policy tract and more like a conversation with your favorite professor during office hours.

For those already initiated, buy the book and enjoy nodding your head and learning a couple new things. And for those trying to share the good news of land use reform, consider making Arbitrary Lines that one thing you get friends or family to read. It’s among the most accessible books on land use I’ve ever read, and it’s a great addition to the growing arcana of the YIMBY cannon.

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