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Category planning

A hole in the literature?

In the comments of a previous post, readers discussed the incentives facing different types of landowners whose properties are facing potential upzoning, demonstrating just how complicated the relationship between land use regulations and property values is. As I see it, theory tells us that upzoning will increase the value of much of the land that will be redeveloped by opening up options for the developer to put the land to a higher valued use. However, land that is not economically viable for redevelopment and perhaps some land near this margin would fall in value due to the increased supply permitted. The example from the earlier post was a proposal for upzoning in Hollywood. I would think that plenty of properties there would be ripe for redevelopment, as single family zoning is constricting supply to well below the market clearing level. If this is true, many homeowners would stand to receive a windfall with upzoning. I’m not very familiar with Los Angeles, but I’d think it likely that owners on the periphery of the area to be upzoned could potentially lose money, as the supply of housing would increase in the most desirable parts of Hollywood, devaluing homes in the less desirable areas. In the comments, awp provided clear analysis of what’s going on in this situation: The excess “rent” comes from having a part of a limited SUPPLY. Any one individual would be able to increase their portion of the “rent” by being the only one allowed to increase their supply, while lowering the total “rent” through the increase in SUPPLY.  If the zoning is removed there will be no remaining excess “rent”.  It would take some serious analysis that I have never seen to figure who would benefit the by moving from a zoning regime to a free market regime. […]

Cities and the Market Process: Part 2

In the first post of this little series, I addressed the problems of top down land use regulation through the lens of Austrian economics. Because cities contain public space and infrastructure that is used by many residents and cannot be bought and sold in the way that many goods can be, Alon Levy suggests turning to collective choice to solve these problems. I will agree that collective choice, or its close cousin communal property rights can be employed well in cities. For example, business improvement districts can work together to undertake projects that would not be worthwhile for any business to take individually, benefitting themselves and their customers in the process. Similarly, these voluntary and emergent organizations can emerge among homeowners or neighborhoods, circumventing some of the coordination problems involved within communities. In a future post, I will go into further detail about the benefits of these types of organizations, whether they’re formal or informal. But now, I want to point out the problems of collective choice when carried out through legislation or land use regulation. As Alon points out, collective choice is inherently biased toward favoring a city’s or neighborhood’s current residents, against potential future residents. This makes policies created through collective choice inherently anti-density and anti-growth. It also means that cities come with a built-in vested interest that wants to protect their property. When planning departments allow this group to protect their interest through the political process, the market process is stifled because entrepreneurs cannot take advantage of available profit opportunities to increase urban density. Furthermore, collective choice leads to many unholy alliances, such as NIMBYs and historic preservationists, NIMBYs and environmentalists who want to protect open space, NIMBYs and those opposed to new transit projects, etc. In other words, collective choice leads to many of the results that urbanists criticize. […]

Cities and the Market Process: Part 1

In a post about the tendency for emergent urbanists to promote the idea of cities having a single equilibrium, Alon Levy recently wrote that collective choice is the best manner for determining urban form. Many urbanists accept that some of the top-down regulations that limit density or use are detrimental to cities, but they often stop short of suggesting that land use regulation should be abolished and transportation privatized, which I will support here with arguments based in Austrian economics. This post does not get to a critique of the collective choice that Alon supports; later entries in this market process series will address both the problems of creating urban policy through collective choice, and some of the institutions that have emerged within civil society that are essential to cities and their residents. The cohort of economists and urbanists who support the elimination of land use regulation is small because cities present all of the problems that neoclassical and Keynesian economists describe as market failures, including externalities, high transaction costs involved in Coasean bargaining, non-excludable goods, etc. However, I believe that emergent solutions solve these problems more effectively than either central planning or collective decision making that becomes law, and the failed and inefficient government projects that urbanist bloggers write about everyday suggest that government failure is no trivial concern. The first reason that regulation is a poor tool to for determining urban form comes from Friedrich Hayek. He clearly identified the calculation problem inherent in central planning: the information necessary to coordinate markets (including land use markets) is held by individuals with “particular knowledge of time and place.” Even assuming that urban planners are benevolent and seek to provide the best outcomes for their communities, they could never compile the knowledge necessary to determine what those outcomes are. Jane […]

Transit Oriented Development in Chevy Chase

In Chevy Chase, MD county planners have revised plans for the Chevy Chase Lake Sector from high rise, mixed-use development to low-rise, primarily residential buildings. The trigger to allow for higher-density development will be the arrival of the Purple Line, a proposed light rail that would stretch across Metro’s Red Line. The light rail would connect Bethesda directly to New Carollton. Construction is scheduled to be completed by 2020, but I for one am not betting on a light rail by that time. For one, no funding has been secured, and for another reason the project is met with considerable opposition to NIMBY-ists in Bethesda and Silver Spring. The town of Chevy Chase has been the most vocal opponent of the project. Personally, I could see the Purple Line being very well-used, and potentially coming closer to profitability than the “cherry blossom” line. However, waiting for the arrival of transit to permit Transit Oriented Development creates a chicken and egg problem. When high-density development is not allowed where there is demand for it, the restriction limits potential for other viable transit options. For example increasing density along the proposed Purple Line could allow for a Circulator or increased MTA routes to provide service in the meantime. And opposition to the light rail is likely to remain strong as long as residents don’t see the clear value of mass transit in their municipalities.  

Covenants as a substitute for Euclidean zoning

Recently, Adam, Stephen, and I did a podcast with Jake at The Voluntary Life about The Voluntary City. The book is a collection of papers on free market solutions to urban challenges, and we will post a link to the podcast here when it’s available. In one chapter of the book, Stephen Davies discusses covenants as an emergent solution to the externality challenges inherent between neighbors using their property as they see fit. Since this topic came up in the comments of a recent post about neighborhoods built before Euclidean zoning was widely adopted, I thought it deserved further discussion. A couple of commenters suggested that because properties in Baltimore’s Roland Park neighborhood were sold with deed restrictions attached, the development there was not “organic.” My word choice was ambiguous, but in the post I meant it to signify that the development occurred in response to a market process as opposed to a regulatory regime. Private contracts governed land use as opposed to municipal rules. Davies explains that covenants first came into widespread use in England, as the country was urbanizing between 1740 and 1850. Because developers could achieve higher values for their land by ensuring complementary uses between adjacent property owners, they put covenants in place to restrict the land uses that would be permitted within a community. Some of these covenants even went so far as to specify house’s architectural details. He writes: Covenants were used in almost all urban development of the period and for a long time thereafter. Whenever a piece of land or the power to use that land was transferred from one party to another, the transfer, whether a lease or a sale, would normally contain a number of specific stipulations, or covenants. Covenants (literally, treaties) were legally binding agreements between the parties that […]

A Tale of Two Densities

I was catching up on posts over at The Old Urbanist, and came across his astute analysis of setbacks that many of you probably saw a while back. Focusing on the requirement for large front lawns in many towns across the country, Charlie Gardner writes: Whether this reflects a continuing market preference is unclear, since nearly all municipal zoning codes in the United States require large setbacks (see, e.g.,Charlotte), depriving homeowners of any choice in the matter.  The pattern has been replicated so relentlessly across the North American continent that alternative single-family residential designs may simply have been scrubbed from the collective imagination. Gardner and others attribute this bland landscape in large part to Frederick Law Olmsted, and he certainly did support increased greenery in urban areas and lawns that run seamlessly across property lines. However, I think it’s important to distinguish between Olmsted’s vision and the land use regulations that have imposed some version his ideal on American suburbs. Olmsted did promote planned communities, but only local governments have had the authority to make his vision law. In thinking of Olmsted’s planned communities of communities built in Olmsted’s style, Baltimore’s Roland Park immediately comes to my mind. This turn-of-the-century neighborhood was one of the country’s first suburbs. Of course Roland Park is far from an urbanist neighborhood, and it’s easy to fault Olmsted for overlooking the crucial civic aspect of drawing neighbors to the sidewalks and streets for spontaneous interaction. However, (and I realize this may be a minority opinion), I think that it is a lovely neighborhood, and it’s even relatively pedestrian friendly. Clearly, it has little in common with the “snout house” suburbs that Gardner discusses in relation to setback requirements. Part of Roland Park’s charm is that it achieves the feeling of being a green enclave because it lies among denser […]

Clear case of the damages inherent in policy uncertainty

Current policy evolution in Los Gatos, CA demonstrates the power that urban planners have to alter property rights.  The Silicon Valley municipality is currently debating whether or not to upzone a parcel where a developer would like to build 550,000 square feet of office space, replacing 250,000 square feet of an older office park. The lots, located near the Netflix headquarters, are thought to be the potential site for the company’s needed expansion. However, the Bay Area is already home to ample vacant office space, so the developer would like the alternative option of building multifamily housing in the location. In response to this request for a change in zoning that would allow either use, the planning commission chairwoman said she was “blindsided” by the owner seeking permission for options to use the land in various ways. In today’s world of master plans that dictate acceptable uses for each parcel of a city’s land, asking for the freedom to build different types of buildings, rather than approaching a commission with a plan in place for a specific zoning change, may seem out of line. In reality the owner is simply seeking permission to put his land to its most efficient use given future uncertainties. Entrepreneurs profit by seeing through these uncertainties to put resources to their most profitable uses, but in the market for land, policies limit their ability to do so. In curent conditions, in which developers are not building much new office space unless it is pre-leased, the planning commission has the power to determine the land’s expected value by requiring the owner to commit to a plan before moving forward with redevelopment. This is a classic Coasean case of the care that policy makers must take in assigning property rights. Russ Roberts and Richard Epstein did a […]

The Little-Known History of “Light and Air”

“Light and air” is a very common excuse that people give for why we must have basic zoning laws, and while nowadays a lot of people mean it simply in an aesthetic sense – another way of saying “I like to be able to look out a window and not see another skyscraper 50 feet away” (though for some reason when said interaction happens on the second or third floor, it’s okay?) – the origins of it are very interesting, and I believe crucial to understanding today’s urban plans. Of course, the ideas that turn-of-the-century planners had about disease and density turned out to be totally incorrect – privacy and being able to look out a window is nice, but the lack thereof is not a great health risk. As Robert Fogelson writes on pages 125-26 of Downtown: Skyscrapers were also a serious menace to public health, advocates of height limits charged. As early as the mid 1880s, they said that tall office buildings were turning the streets below into dark, damp, and gloomy canyons. During the winter they blocked the sun, leaving the cold streets even colder. During the summer, wrote American Architect and Building News, they acted as “storehouses of heat,” driving up the temperature after sunset, making the once cool and refreshing nights unbearable. The skyscrapers also shrouded the nearby buildings in darkness, forcing the office workers to rely on artificial light – which, it was believed, put a strain on the eyes. Worst of all, the skyscrapers deprived both the streets below and the adjacent buildings of fresh air and sunlight. To Americans who still held that disease was a product of the “miasma,” the noxious vapors that permeated the cities, the lack of fresh air was bad enough. To Americans who believed in the new […]

Duany bashes LEED standards

Andrés Duany, leader of the New Urbanism movement, comes out against LEED standards: He said that high-density development in urban locations which entail less reliance on private cars should get a free pass on energy efficiency or energy generation standards.  “Don’t make apartment dwellers install solar power,” he said.  “They are doing their part just by living densely and driving less.” […] Duany also had choice words for government land use and building officials. In New Orleans, he said that government standards for rebuilding added costs that just about exactly offset the amount of assistance the government was going to provide, so “no one can rebuild.”

David Alpert calls out Virginia Tea Party group as land use statists

David Alpert at Greater Greater Washington has been on top of a story out of Virginia about a Virginia Tea Party group and its bizarre and seemingly anti-free market opposition to a state law forcing local governments to make room for dense growth. The law – which was passed a few years ago by Republicans, as David notes – included a few provisions, but the one in question, which a longtime Northern Virginia Republican is seeking to overturn, required each locality to designate an “urban development area” in which it would allow medium density development. It appears that the original plan was to have an urban growth boundary too, outside of which development would be much harder, but I’m not sure that was included in the version that passed. But whatever the rest of the law contained, Del. Robert G. Marshall and Virginia’s Campaign for Liberty are only opposing the provision that forces localities to provide upzoned land “sufficient to meet projected residential and commercial growth” for the next decade or two. I’ve read the bill (it’s relatively short), and the provision in question doesn’t even put a floor on density in the zoning area or cap the amount of parking allowed – all it does is force local governments to allow developers to build at higher densities. Here is, as far as I can tell, the strictest condition on the UDAs, which also have to allow mixed uses and smaller lot set-backs: The comprehensive plan of a locality having a population of 130,000 or more persons shall provide for urban development areas that are appropriate for development at a density on the developable acreage of at least eight single-family residences, 12 townhouses, or 24 apartments, condominium units, or cooperative units per acre, and an authorized floor area ratio of at least 0.8 […]

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