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On Interfluidity, Steve Randy Waldman posted some criticisms of the market urbanist position. The post was interesting, though I took issue with a few specific points. The following are my responses. Regulatory Authority as a Property Right The customary property rights surrounding homeownership in many cities and suburbs include much more than the use of a square of earth and whatever is built on it. Existing homeowners bought into particular neighborhoods in large part because of their “character”, which includes nice-sounding things like walkability or “charm”, as well as not-so-nice-sounding things like access to exclusionary education. I don’t buy the idea that local control of zoning is a customary property right. A property right implies someone owns something in a definitive way and can make decisions as to the disposition of said something within whatever bounds are prescribed by law. Land use regulations don’t work that way. The relative influence over land use between two homeowners comes down to arbitrary factors like who’s more charismatic in the homeowner’s association or who shows up most frequently at planning meetings. However, if we were to make authority over land use more like a property right, I might actually like that. Ideas like Tax Increment Local Transfers, state taxes on the municipal use of zoning authority, and municipal corporations with residual claimants move us to a world where authority over land use actually looks like something that can be bought, sold, and taxed. I’m partial to the idea of deregulation, but if reform means creating a market in which we can pay off NIMBYs, I can get behind that too. The Normative Case Against Deregulation “Zoning reform” is an anodyne way to describe an expropriation of those customary rights. It amounts to diminishing residents’ ability to preserve or control the evolution of their neighborhoods, in […]
Earlier this week I attended an Urban Land Institute event about DC’s new development, The Yards on the Anacostia waterfront. This is a 42-acre area which was formerly a manufacturing center for the Navy. In 2003, Forest City Washington purchased the site from the General Services Administration for residential, retail, and office redevelopment. Generally I don’t have strong architectural preferences, but some of the former factories that now have glass curtain walls are looking very cool. During the presentation, I was reminded of Ronald Coase’s 1937 paper, “The Nature of the Firm.” This paper is about knowledge problems, within and outside of the firm. He explains that firms exist, rather than each worker serving as his own contractor, because firms reduce the transaction costs of contracting for individual projects. However, firms face knowledge problems similar to those that government bureaucracies face: In economic theory we find that the allocation of factors of production between different uses is determined by the price mechanism. The price of factor A becomes higher in X than in Y. As a result, A moves from Y to X until the difference between the prices in X and Y, except if so far as it compensates for other differential advantages, disappears. Yet in the real world, we find that there are many areas where this does not apply. If a workman moves from department Y to department X, he does not go because of a change in relative prices, but because he is ordered to do so. Those who object to economic planning on the grounds that the problem is solved by price movements can be answered by pointing out that there is planning within our economic system which is quite different from the individual planning mentioned above and which is akin to what is normally called economic planning. In the case of The Yard, this […]
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!). […]