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Episode 03: Sanford Ikeda on Jane Jacobs

Jane Jacobs

  My guest this week is Sanford Ikeda, a professor of economics at SUNY Purchase and a visiting scholar at New York University. He has written extensively on urban economics, policy, and planning. Professor Ikeda introduced me to urban economics and urban planning when he gave a presentation on Jane Jacobs at a FEE summer seminar that I attended back in 2012. Here are a few of the topics we discussed in the episode: If you haven’t already, I highly suggest reading Jane Jacobs. The natural place to start is The Death and Life of Great American Cities. Her other books, including The Economy of Cities and Systems of Survival, explore topics ranging from economics to political philosophy. Professor Ikeda has written extensively on Jane Jacobs. You can read a nice overview here. If you would like to read more, click here for a paper he wrote on F.A. Hayek, Jane Jacobs, and the importance of local knowledge in cities. He is also a regular contributor to Freeman and Market Urbanism. We also discussed William H. Whyte’s famous documentary on public space, The Social Life of Small Urban Spaces. It’s well worth checking out. Help spread the word! If you are enjoying the podcast, please subscribe and rate us on your favorite podcasting platform. Find us on iTunes, PlayerFM, Pocket Casts, Stitcher, and Soundcloud. Our theme music is “Origami” by Graham Bole, hosted on the Free Music Archive.

Visions of Progress: Henry George vs. Jane Jacobs

  Henry George and Jane Jacobs each have an enthusiastic following today, including, I’m sure, some readers of The Freeman. For those who might not know, Henry George is the late-19th-century American intellectual best known for his proposal of a “single tax” from which he believed the government could finance all its projects. He advocated eliminating all taxes except that on the rent of the unimproved portion of land. He viewed that rent as unjust and solely the result of general economic progress unrelated to the actions of landowners. Jane Jacobs, writing about one hundred years later, is an American intellectual best known for her harsh and incisive criticism of the heavy-handed urban planning of her day. She advised ambitious urban planners to first understand the microfoundations of urban processes — street life, social networks, entrepreneurship — before trying to impose their visions of an ideal city. Much has been written, pro and con, on George’s single tax and also on Jacobs’s battles with planners the likes of Robert Moses, and if you’re interested in those issues you can start with the links provided in this article. Here I would like to contrast their views on the nature of economic progress and the significance of cities in that progress. Some interesting parallels There are some interesting parallels between George and Jacobs. Both were public intellectuals who rebelled against mainstream economic thinking — for George it was classical economics, for Jacobs neoclassical economics. Both had a firm grasp of how markets work, were critical of crony capitalism, and concerned with the problems of “the common man.” And both established their reputations outside of academia. George was a strong advocate for free trade and an opponent of protectionism. He also understood Adam Smith’s explanation of the invisible hand. As George writes in […]

100 Years After Zoning In New York City, Government Dominates Land Use

This month marks the 100th anniversary of two pieces of legislation that revolutionized the way we live. On July 11, 1916, President Woodrow Wilson signed the first Federal Aid Road Bill. And on July 25, 1916–exactly 100 years ago today–New York City passed the country’s first comprehensive zoning ordinance. Prior to 1916, transportation infrastructure was primarily a local and/or private responsibility. For example, cities leased their rights-of-way to trolley companies, which operated transit lines. Railroad companies provided travel service between cities. The 1916 Federal Road Bill was the first step in nationalizing transportation infrastructure funding, with the state highway departments formed to manage federal appropriations for roads. These two pieces of legislation produced radical change, as government favoritism of automotive infrastructure crowded out other transportation modes and undermined innovation. In the century prior to 1916, entrepreneurs invented steam ferries, trains, bicycles, trolleys, and automobiles. Such advances ceased after 1916. Yes, today’s cars are more comfortable and powerful, but they have the same steering wheel, four tires, and internal combustion engine as the Model-T Henry Ford was building 100 years ago. As for roads, the main difference is they are bigger. Unable to compete with government favored automobiles, Charleston’s last private ferry operator closed shop in 1930. Its trolley lines, which carried 20 million passengers/year (compared with CARTA’s 5 million/year) stopped running in 1937. Zoning is segregation – not only of land uses deemed incompatible, but of people deemed “undesirable.” Progressives behind New York City’s 1916 zoning ordinance regarded immigrants moving into northern cities from Europe and the South as “undesirable.” In 1921, then U.S. Secretary of Commerce Herbert Hoover tapped Edward Bassett, the leading advocate of New York City’s 1916 zoning, to create a model zoning ordinance. Engineer Morris Knowles also served on this committee. In its 1926 landmark decision in Euclid v. […]

Y-Combinator, Tech, and “New Cities”

Monday, Y-Combinator, an early-stage technology startup incubator, announced it will “study building new, better cities.” Some existing cities will get bigger and there’s important work being done by smart people to improve them. We also think it’s possible to do amazing things given a blank slate. Our goal is to design the best possible city given the constraints of existing laws. They are embarking on an undertaking of noble intentions, and I will explain why the technology sector needs to be at the forefront of thinking about cities.  However, in the pursuit of designing “new” cities from a “blank slate” they have begun their quest with one fatally flawed premise, that wise technocrats can master-build entirely new cities catering to the infinitely diverse set of needs and desires of yet-to-be-identified citizens.   Any visions of city-building must first humbly acknowledge that cities are an “emergent” phenomena.   According to wikipedia, “emergence is a process whereby larger entities, patterns, and regularities arise through interactions among smaller or simpler entities that themselves do not exhibit such properties.”   What makes cities vibrant are the “spontaneous order” which emerges among city dwellers as they pursue their individual desires. Cities are like the internet – networks, patterns, and interactions emerge not through design but from spontaneous order.  Like no entity could conceivably understand or control the internet, no entity has the knowledge to anticipate the desires of millions of individual agents, and design a city accordingly.  This is called the “knowledge problem.” According to economist Friedrich Hayek: If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the […]

Exclusionary Zoning and “Inclusionary Zoning” Don’t Mix

Inclusionary Zoning is an Oxymoron The term “Inclusionary Zoning” gives a nod to the fact that zoning is inherently exclusionary, but pretends to be somehow different.  Given that, by definition, zoning is exclusionary, Inclusionary Zoning completely within the exclusionary paradigm is synonymous with Inclusionary Exclusion. What is Inclusionary Zoning? “Inclusionary Zoning” is a policy requiring a certain percentage of units in new developments to be affordable to certain income groups.  Sometimes, this includes a slight loosening of restrictions on the overall scale of the development, but rarely enough loosening to overcome the burden of subsidizing units. Many cities, particularly the most expensive ones, have adopted Inclusionary Zoning as a strategy intended to improve housing affordability.  Often, demand for below-market units are so high, one must literally win a lottery to obtain a developer-subsidized unit. Economics of Exclusion We must first acknowledge the purpose of zoning is to EXCLUDE certain people and/or businesses from an area.  Zoning does this by limiting how buildings are used within a district, as well as limiting the scale of buildings .  These restriction cap the supply of built real estate space in an area.  As we know from microeconomics, when rising demand runs into this artificially created upward limit on supply, prices rise to make up the difference. As every district in a region competes to be more exclusive than its neighbors through the abuse of zoning, regional prices rise in the aggregate. Since the invention of the automobile, and subsequent government overspending on highways, sprawl has served as the relief valve. We’ve built out instead of up for the last several decades and this sprawl has relieved some of the pressure major metropolitan areas would have otherwise felt. In fact, it’s worked so well–and led to the abuse of zoning rules for such a long time–that exclusionary zoning has become the accepted paradigm. Zoning is the default flavor of […]

Urban Renewal in Philadelphia

The Philadelphia Housing Authority will seize  nearly 1,300 properties for a major urban renewal project in the city’s Sharswood neighborhood. The plan includes the demolition of two of the neighborhood’s three high-rise public housing buildings — the Blumberg towers — that will be replaced with a large mixed-income development. The new buildings will increase the neighborhood population tenfold with the majority of the new units to be affordable housing. The majority of the 1,300 lots slated for eminent domain are currently vacant. At a City Council hearing on Tuesday, Philadelphia Housing Authority CEO Kelvin Jeremiah testified that the redevelopment plan furthers the agency’s efforts to replace high-rise housing projects with lower-density units. However, PHA’s plan misses the forest for the trees. The benefits of demolishing the two towers are immediately undone by creating an entire neighborhood of public housing, effectively increasing the concentration of poverty in Sharswood. Adam Lang has lived in Sharswood for 10 years, and he posted about the plan in the Market Urbanism Facebook group. Adam has raised concerns that the PHA does not have an accurate number of how many of the 1,300 properties in the redevelopment territory are currently occupied. Adam’s primary residence is not under threat of eminent domain, however he owns four lots that are. He uses two lots adjacent to his home as his yard. The other two are a shell and a vacant lot. He purchased them, ironically, from the city with the plan to turn them into rentals. Adam’s concern about the inaccuracy of PHA’s vacancy statistics stem from the method that PHA employees used to create their estimate: driving by homes to see if they look occupied or not. Adam’s own property was on the list of vacants, and he said that he’s aware of other properties in the neighborhood […]

The benefits of the market in both infrastructure and urbanism

Alain Bertaud, a senior research scholar at the Urbanization Project, has had a long career in urban planning, and many of his writings have a market urbanist flavor. He is currently working a book called Order Without Design, and last year he published an excerpt from that book called “The Formation of Urban Spatial Structures: Market vs. Design.” In the article he offers a compelling case for letting the market determine building sizes and uses, but he argues that infrastructure provision must be left to the state. I agreed wholeheartedly with the first portion of his paper, but find that his arguments for the market in land use contradict his arguments for the state in infrastructure. Bertaud eloquently explains the knowledge problem facing urban planners who seek to regulate efficient land use patterns. Because economic growth is such a complex process that’s dynamic over time, he explains that top-down design will fail to keep up with changing land use needs to the detriment of economic growth. He cites Hartford, Connecticut as an example. The city developed a large insurance industry, but as it became profitable for American insurance companies to outsource clerical work abroad, fewer Connecticut residents find employment in the industry. However, in a futile effort to maintain jobs, urban planners have refused to update land use regulations to permit new employment opportunities. Rather than succeeding in keeping historical sources of employment in place, urban planners have prevented economic diversity that can hedge against a downturn in a specific industry. Bertaud describes price mechanism that allows the market to identify land’s highest value use: Markets …  recycle obsolete land use quasi-automatically through rising and falling prices. This constant land recycling is usually very positive for the longterm welfare of the urban population. In the short term, changes in  land use and in the spatial concentration of employment are disorienting and alarming for workers and […]

Planned Manufacturing Districts: Planning the Life Out of Districts

They are called different things in different cities, but they are similar in form and intent among the cities where they are found.  For simplicity’s sake, a Planned Manufacturing District (PMD), as they are called in Chicago, is an area of land, defined by zoning, that prohibits residential development and other specific uses with the intent of fostering manufacturing and blue-collar employment. Proponent of PMDs purport to be champions of the middle-class or blue-collar workers, but fail to consider the unintended consequences of prohibiting alternative uses on that land.  At best, PMDs have little effect on changing land-use patterns where industrial is already the highest-and-best-use.  At worst, they have the long-run potential to distort the land use market, drive up the costs of housing, and prevent vibrant neighborhoods from emerging. A Race to The Bottom Before getting into it further, it is important to examine the economic decisions industrial firms make in comparison to other uses.  Earlier in the industrial revolution, industry was heavily reliant on access to resources.  Manufacturing and related firms were very sensitive to location.  The firms desired locations with easy access to ports, waterways, and later railways to transport raw materials coming in, and products going out. However, the advent of the Interstate Highway System and ubiquitously socialized transportation network have made logistical costs negligible compared to other costs.  Where firms once competed for locations with access to logistical hubs and outbid other uses for land near waterways in cities, they now seek locations with the cheapest land where they can have a large, single-floor facility under one roof.  This means sizable subsidies must be combined with the artificially cheap land to attract and retain industrial employers on constrained urban sites. Additionally, today’s economy has become much more talent-based rather than resource based, and patterns have shifted accordingly.  In contrast to industrial, residential and office uses are […]

Glamour in streetscapes

A while ago I attended an Urban Land Institute event on development trends in Fairfax’s Mosaic District. A presenter from the retail developer EDENS described their strategy of adding “sidewalk jewelry,” a design technique used to entice shoppers to travel down sidewalks between stores. Having never heard the term before, it nonetheless stuck with me as I thought about retail developments that manage to create relatively lively pedestrian environments from the top down. At Mosaic District, this street jewelry takes the form of signage designed to engage pedestrians, fountains, and planters: It’s certainly more aesthetically pleasing and engaging to pedestrians than the average strip center. While the typical strip mall has a parking lot for a set back, Mosaic District has a parking garage that allows the rest of the center to be more pedestrian-scaled. With the “sidewalk jewelry” framework in mind, it’s easy to see that many retail developers have embraced this trend toward focusing on the pedestrian experience once shoppers have left their cars at the center’s periphery. While Easton Town Center in Columbus has many of the same stores as any major mall, it’s outdoor shopping environment is distinctly different, attempting to emulate the “town center” in its name: For shoppers who value retail ambience, these “lifestyle center” sidewalks provide a much nicer atmosphere relative to more dated strip center or shopping mall designs, but they can’t compare to environments where storefront decorations developed more organically. A recent trip to Quebec City reminded me of the sidewalk jewelry term, but there the visual treats that lure pedestrians down the sidewalk have much more texture than the shopping centers’ above because they are the result of an emergent order among the street’s businesses and residents rather than one developer’s vision: This type of street meets social critic Virginia Postrel’s framework of glamour. In […]

Urban Development in Charter Cities

In light of approval in Honduras for three new charter cities (REDs), much has been written recently on their potential to improve economic development. Economist Paul Romer makes a compelling case for the potential of charter cities, asserting that countries with institutions that impede economic growth can benefit by designating small areas with rules that permit free trade. Despite the promise of REDs, designating new areas for urban economic zones may pose some challenges that haven’t been addressed elsewhere. Cities almost always grow through spontaneous orders in locations that emerge through human migration. Cities are a product of human action, not of human design. Older cities grew through their accessibility to trade and natural resources. More recently, towns have become cities as they have become centers for specific industries. This process happens not with top-down planning, but rather as the market process leads individuals to move to specific places, resulting in the urbanization patterns that we see. In the case of Honduras’ REDs, however, the locations were selected by the state. Unlike the approved sites for REDs in Honduras, Hong Kong and Singapore (models of charter cities) were not greenfields before they became charter cities. Since becoming models of charter cities, both islands’ populations have exploded, but some level of development existed before British rule, and the British did not set out to create large cities. Rather than being planned, the success of these two islands was an accident, in which good institutions in fortunate locations have facilitated enormous economic growth. In contrast, all of the infrastructure and design for the REDs will be built from scratch, at first by one company, MKG, until other investors and individuals move to the city. In a sense, city construction may have to begin before there is demand for it. MKG has pledged $15 million […]

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