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Liberalizing Cities
From The Ground Up
Enormous viaducts like this are one reason for the project's ballooning cost estimates Well, the other shoe has finally dropped: the California High-Speed Rail Peer Review Group is recommending that the state legislature not authorize the issue of $2.7 billion in bonds to begin paying for the state’s planned $98.5 billion high-speed rail line….
London’s Shard tower, soon to be the tallest in Europe, is, financially speaking, a bit puzzling. Europe is in the midst of an economic crisis, and London’s Southwark, across from the skyscraper-crazed City of London, is gentrifying, but not the safest place for a massive real estate investment. The developers have yet to sign a major office tenant, and nobody is expecting the project to turn much of a profit. …
Cornell-Technion has released another “fly-over” video, this one focused on the interior. But it does shed a bit more light on what the development will look like from the ground, and it ain’t pretty – the campus will be laid out in a fairly Corbusian plan, replete with lots of concrete plazas and grassy knolls (especially near the campus’ northern gateway to the rest of the island), and no retail space in sight. The empty spaces in the video are packed with students milling around, admiring the beautiful grassy fields and sloping moss interiors. But anyone who’s ever been to one of New York‘s many towers-in-a-park high-rises or zoning code-enabled privately-owned public spaces knows better than to believe that what New Yorkers really want is a bunch of grass and concrete to hang out on….
This post originally appeared at Neighborhood Effects, a Mercatus Center blog where we write about the economics of state and local policy. Next week, New York Governor Cuomo is likely to sign a bill that will marginally increase competition in the NYC cab market. The new rule will allow passengers to hail some livery cars in outer boroughs and add 2,000 additional medallions for yellow cabs with wheelchair access. The auction of these medallions is projected to raise $1 billion. This figure might seem outlandish, but last month two medallions sold at auction for over $1 million. That’s right, it costs $1 million for the right to drive a cab in NYC, not accounting for any of the costs associated with owning and operating the vehicle. The price tag of these medallions that are sold to the highest bidder demonstrates that in a free market, many more drivers would enter the cab industry. Artificially constraining the supply hurts both consumers and those who are not able to drive a cab because they are unable to purchase a medallion. Unsurprisingly, the Metropolitan Taxicab Board of Trade remains strongly opposed to this bill. The increase in the supply of medallions will lower the value of the medallions that cab drivers and larger medallion companies already own. Their lobbying efforts reflect their desire to profit through the political system. While this increase in the number of medallions available for yellow cabs and allowing some livery cars to be hailed represents a small improvement for New Yorkers, the reform does not go nearly far enough. For real reform, Mayor Bloomberg should look to Indianapolis. Before Stephen Goldsmith was elected as the city’s mayor in 1991, the number of cabs permitted in Indianapolis was limited to 392. Goldsmith created a Regulatory Study Council whose first […]
The sky's the limit for Dumbo! Last night I wrote a blog post about tech development in New York City, arguing that before the city pours money into a science campus for Cornell on Roosevelt Island, its planners should make more room for entrepreneurs in existing tech hubs like Union Square and Dumbo. …
Stanford's (losing) vision for Roosevelt Island, with requisite acres of green Big news out of New York City: Stanford pulled out of Bloomberg’s applied sciences university “competition” after Cornell got an enormous donation, leaving the upstate university the front runner to build a new campus, likely on Roosevelt Island. This comes with up to $100 million in state subsidies, plus free land and invaluable planning acquiescence. …
"Made in USA"…and don't you forget it! United Streetcar, led by its former lobbyist, Chandra Brown, is ostensibly a manufacturer, though its greatest asset seems to be its ability to win government contractors….
1) Commenter Mike Chlanda: I’ve randomly picked you to receive my copy of The Heights. Please email me at [email protected] with your shipping information so that I can send it to you. Thanks all for your interest in the book. 2) Russ Roberts gave a fantastic and humbling talk at the Mercatus Center holiday dinner last night that I wish that I could link to here. It was broadly about the limitations of economics as an objective science. Economists have a strong tendency to see what they want to see in data. It seemed particularly relevant to yesterday’s post. I can look at the evidence and see that clearly cities are essential for productivity growth, while Randall O’Toole dismisses those studies as insignificant. Also given yesterday’s topic, Russ had a great quote that was something like, “there are many things that economics isn’t good for. It’s too bad that one of them is macroeconomics.”
It’s no surprise that a lot of politicians and policymakers believe that America’s biggest infrastructure problem is insufficient taxpayer funding. But never have I seen it expressed so condescendingly as in a Washington Post article published yesterday in the PostLocal section, not labeled as an opinion piece, titled: “Experts struggle to express direness of infrastructure problem to a wary public.” There’s no doubt that America’s infrastructure, and especially its transit, is indeed in dire straits….
I am no macroeconomist; however, I think there are some important dots to connect between cities and economic growth. The Gated City by Ryan Avent, (discussed more in depth here), explores this thesis and offers a nice overview of the research that links population density and productivity. He cites Ed Glaeser and others who see a strong correlation between the two. Glaeser finds that with a 50 percent increase in population density, productivity increases by 4 percent. Additionally, I find Geoffrey West’s work (not cited by Avent) particularly intriguing. West is a former physicist who has studied the correlation between city size and all sorts of variables from the number of gas stations to the number of bank deposits per year. He’s found that every time a city doubles in size, worker productivity increases by 15 percent. The distinction between West and many others who study this issue is that he focuses on a city’s total population rather than its population density. Increasing worker productivity is the holy grail of macroeconomics. As worker productivity grows, it raises our wages and standard of living. This is what lifts poor countries out of poverty and ensures that future generations will enjoy a higher standard of living than we do today. Some of the factors that economists widely agree contribute to higher growth rates include education, property rights, and rule of law. Perhaps urbanization should be added to the list too. I won’t weigh in here on whether the variable that influences productivity is population size or population denisty; maybe they both do. In the context of land use policy, I would argue that it doesn’t matter which variable we look at. By limiting development, land use restrictions typically lead cities to be both less dense and of smaller populations. This applies equally to traditional land use […]
