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Category Policy

People Over Process: Why Democracy Doesn’t Justify Exclusion

Some people accept the idea that restrictive land use policy is just as bad as all the research suggests, but persist in supporting the status quo. They argue that if a community chooses to regulate its built environment, that choice should be respected as having moral weight because it’s the outcome of a democratic process. This argument, though, is as logically confused as it is normatively problematic. And in the following few lines, I intend to demonstrate exactly why. No decision making process is value neutral. Whatever way we choose to go about collective decision making, we will always privilege certain voices over others. Institutions beget outcomes and the internal logic of our institutions will always favor some outcomes (and therefore voices) over others. The same individuals with the same preferences asked to make the same decisions through different procedures will produce wildly different outcomes. Imagine a U.S. Presidential election based on the popular vote or representation in the U.S. Senate proportional to state population and you should begin to see how the public will is as much a product of procedure as it is aggregated individual preference. Taking the Bay Area as a land use specific example, our system heavily favors the voices of incumbent homeowners to the detriment of everyone else. Land use decisions take place at the municipal level which–given the fact that we have 101 different municipalities–is a hyper local affair. When a new development is proposed, it only takes a handful of angry neighbors to impact decision making. Were land use set at a higher level of government, the typical number of people that get angry over an individual project would be far less effective at killing new housing. Fifty angry homeowners might matter to the Palo Alto City Council, but they’d be quite a […]

An Attack on Market Urbanism

The far-left “TruthOut” web page recently published an attack on YIMBYs,* describing them as an “Alt-Right” group (despite the fact that the Obama Administration is pro-YIMBY).  I was surprised how little substance there was to the article; most of it was various ad-hominem attacks on YIMBY activists for cavorting with rich people.   I only found two statements that even faintly resembled rational arguments. First, the article suggests that only current residents’ interests are worth considering in zoning policy, because “the people who haven’t yet moved in” most often means the tech industrialists, lured by high salaries, stock options and in-office employee benefits like massage therapists and handcrafted kombucha.” This statement is no different than President Trump’s suggestion that Mexican immigrants “[are] bringing drugs. They’re bringing crime. They’re rapists.” – that is, it is an unverifiable (if not bigoted) generalization about large numbers of people.  Furthermore, it doesn’t make sense. The “tech industrialists” have the money to outbid everyone else, so they aren’t harmed by restrictive zoning. Second, the article states that academic papers aren’t as relevant as the actual experiences of San Franciscans displaced by high housing costs.  In response to the argument that less regulation means cheaper housing, it states  “tell that to people like Iris Canada, the 100-year-old Black woman who had used local regulations to stay in her home of six decades, only to be evicted in February.” So in other words, somebody was evicted in San Francisco, therefore San Francisco’s restrictive zoning prevents eviction. I don’t see how the latter follows from the former.  The whole point of the YIMBY/market urbanist argument is that if there was more housing, there would be lower housing costs, hence fewer evictions. *For those of you who are unfamiliar with the term, YIMBY means “Yes In My Back Yard”, a […]

A Guide to Urban Development [Guia de Gestão Urbana]

Caos Planejado, in conjunction with Editora BEI/ArqFuturo, recently published A Guide to Urban Development (Guia de Gestão Urbana) by Anthony Ling. The book offers best practices for urban design and although it was written for a Brazilian audience, many of its recommendations have universal applicability. For the time being, the book is only available in Portuguese, but after giving it a read through, I decided it deserved an english language review all the same. The following are some of the key ideas and recommendations. I hope you enjoy. GGU sets the stage with a broad overview of the challenges facing Brazilian cities. Rapid urbanization has put pressure on housing prices in the highest productivity areas of the fastest growing cities and car centric transportation systems are unable to scale along with the pace of urban growth. After setting the stage, GGU splits into two sections. The first makes recommendations for the regulation of private spaces, the second for the development and administration of public areas. Reforming Regulation Section one will be familiar territory for any regular MU reader. GGU advocates for letting uses intermingle wherever individuals think is best. Criticism of minimum parking requirements gets its own chapter. And there’s a section a piece dedicated to streamlining permitting processes and abolishing height limits. One interesting idea is a proposal to let developers pay municipalities for the right to reduce FAR restrictions. This would allow a wider range of uses to be priced into property values and create the institutional incentives to gradually allow more intensive use of land over time. Meeting People Where They Are Particular to the Brazilian experience is a section dedicated to formalizing informal settlements, or favelas. These communities are found in every major urban center in the country and often face persistent, intergenerational poverty along with […]

The “Foreign Buyers” Argument

A common argument against new housing supply is that in high-cost cities such as New York, demand from foreign buyers is so overwhelming as to make new supply irrelevant.  A recent study (available here) by two business school professors suggests otherwise.  The study does show more foreign involvement in the NYC market than I expected: just over 13 percent of Manhattan buyers, and 5 percent of all regional buyers, come from outside metropolitan New York.  Even this share is less than in some lower-cost markets: the study notes that 17 percent of Las Vegas buyers are from outside the city. However, the impact of “out of town” buyers is pretty small:  the authors conclude that out-of-town buyers “cause an increase in house prices of 1.1% and an 39 increase in rents by 1.6% in both zones.”

Four Warnings For Los Angeles On Measures S

The alternative title for this piece was: “Ballot Box Zoning: Where Needed Housing Goes to Die.” Next month, Los Angeles will be voting on Measure S, a proposed 2-year policy that will effectively serve as a moratorium on new construction.  That is, Measure S will require a public vote on any new development that does not fit within existing zoning.  Most of the city’s major leaders, including Mayor Eric Garcetti, have come out against the measure, and the Los Angeles Times followed suit just a few days ago. I’m not going to rehash arguments for or against the measure.  Instead, I’m going to offer several warnings based on the experience of Davis, CA, which passed its own Ballot Box Zoning Measure in 2000.   Measure J, our ballot box zoning measure, requires voter approval on any attempt to change the zoning designation of open space or agricultural land that sits on the community’s edges.  The law also explicitly names two particular parcels that must be voted on prior to approval.  So for the purposes of this piece, consider it a ballot box zoning law targeting sprawl. Warning 1: These Measures Are Hard To Roll Back Measure J passed in Davis with just 53.6% percent of the vote in a March primary when residents cast just 19,000 votes (in a city with at least 49,000 voting-age residents).  The law contained a renewal clause, and when it came up for renewal in 2010, support jumped to 76.7% percent.   This increased support may be an artifact of how the opposition attempted to stall the measure’s renewal.  Opponents of the renewal made a NIMBY argument the centerpiece of their case: they argued that slowing growth at the edge of town meant more infill pressure in the city’s core, threatening the character of neighborhoods.  As I’ll discuss in a […]

Only In California: Twisting an Anti-Exclusionary Law To Rationalize Exclusion

As a Market Urbanism reader, you are hopefully fluent in the problems of exclusionary zoning.  If you’re new to the term, there are some good pieces on the topic here and here.  Basically: exclusionary zoning is the use of zoning to price people out of a community.  The classic example is minimum lot sizes or minimum unit sizes: cities only zone parcels big enough to ensure low-income families cannot afford the housing.  When subsidies for affordable housing require specific unit attributes, like reduced parking ratios, a community can simply require parking ratios above that threshold (although states can move swiftly to stamp out such practices). States have also responded to exclusionary zoning practices with a wide array of policy interventions known collectively as “anti-snob laws.”  One key component of California’s anti-exclusionary efforts is called the Regional Housing Needs Allocation (RHNA).  The law requires each jurisdiction in the state to produce a Land Inventory (or Adequate Sites Inventory, or Sites Inventory, or Buildable Land  Inventory) that demonstrates the jurisdiction possesses space to accommodate anticipated housing needs at adequate densities.  Read “adequate densities” as dense enough to produce affordable units. Scott Wiener, the state senator representing San Francisco, is pushing to give the RHNA some real teeth. The most contentious component of the process is the definition of “need” for each jurisdiction.  The state calculates anticipated need based on population and jobs projections for each region.  Regional councils of government (COGs) are then empowered to distribute the regional need to each jurisdiction within that region.  Need is quantified in terms of units, and these needed units are further categorized into four groups: units affordable to Very Low Income, Low Income, Moderate Income, and Above Moderate Income households. Regional agencies had some flexibility in making these allocations in the past.  Thanks to SB 375, which passed in […]

How To Finance A Sanctuary City

President Trump has threatened to withhold all federal funds from so-called sanctuary cities–municipal governments that do not enlist their police departments in the president’s mass deportation plan. If he makes good on his threat, cities that insist on maintaining their sanctuary status can offset revenue losses with two policies: liberalizing land-use regulation and depoliticizing public land sales. It’s unclear exactly how much money each city would lose by maintaining its sanctuary status, but New York City, to name one example, relies on federal funding for 10% of its budget, according to state comptroller estimates. A sudden drop of that magnitude would devastate many jurisdictions, and Miami-Dade County has already caved. However, a handful of cities with high rents and very restrictive land-use regulations could dramatically increase property tax revenue and the value of city-owned real estate through liberalization. Millions of Americans would love to live in cities like New York, Los Angeles, San Francisco, Seattle, San Jose, Austin, Portland, and Denver, but legal restrictions on what can be built limit the number of housing units available and increase the cost of each unit. Some estimates have found that regulation alone accounts for fifty percent of the cost of housing in San Francisco. At the same time, land-use regulation has the opposite effect on the price of land itself. A plot of land with limited legal potential for development is worth much less than a plot a developer could use to build a large, lucrative building. Economist Keith Ihlanfeldt has found that the decrease in land values more than offsets the increase in home prices—meaning some cities are decreasing potential revenues by restricting development. San Francisco has large neighborhoods of single-family homes where rent levels would sustain large apartment towers. The drastic mismatch between what is currently allowed and what consumers demand suggests that land values would skyrocket if restrictions were relaxed. […]

Are “Charter Cities” a Solution?

Stanford economist Paul Romer has proposed an intriguing concept: the “charter city.”  A charter city is a newly created city governed by a country other than the one within whose borders it exists. Its residents would remain citizens of the home country. Romer offers Hong Kong as an example when it was a British colony. According to the Charter Cities website: The two prerequisites for a charter city are uninhabited land and a charter granted and enforced by an existing government or collection of governments. With the right rules, a city will naturally grow as residents arrive, employers start firms, and investors build infrastructure and buildings. What makes a charter city attractive is the prospect of rapidly instituting rules consistent with economic development in an area that might otherwise take decades to do so, offering almost overnight the chance of a better life for the citizens of a impoverished country for whom long-distance immigration is too costly. Thus Romer has suggested that a charter city be established in Haiti for Haitians left homeless by the recent earthquake and who have little hope of help from an ineffective and otherwise corrupt Haitian government.  (The Charter Cities site, however, says the time is not right for this option.) While I find myself largely sympathetic to the concept, two things bother me about it. Incentive Problems The first is whether it can overcome the Public Choice problem. Although the Hong Kong example is persuasive, I wonder whether the host country would really permit the guest country to bypass enough of its political and bureaucratic interests to establish an effective rule of law, free exchange, and other things necessary for long-term economic development.  And once established, would the host permit enough free immigration from its own jurisdiction and the loss of long-established political bases […]

Private Neighborhoods And The Transformation Of Local Government

Urban Institute Press • 2005 • 494 pages • $32.50 paperback In Private Neighborhoods and the Transformation of Local Government, Robert H. Nelson effectively frames the discussion of what minimal government might look like in terms of personal choices based on local knowledge. He looks at the issue from the ground up rather than the top down. Nelson argues that while all levels of American government have been expanding since World War II, people have responded with a spontaneous and massive movement toward local governance. This has taken two main forms. The first is what he calls the “privatization of municipal zoning,” in which city zoning boards grant changes or exemptions to developers in exchange for cash payments or infrastructure improvements. “Zoning has steadily evolved in practice toward a collective private property right. Many municipalities now make zoning a saleable item by imposing large fees for approving zoning changes,” Nelson writes. In one sense, of course, this is simply developers openly buying back property rights that government had previously taken from the free market, and “privatization” may be the wrong word for it. For Nelson, however, it is superior to rigid land-use controls that would prevent investors from using property in the most productive way. Following Ronald Coase, Nelson evidently believes it is more important that a tradable property right exists than who owns it initially. The second spontaneous force toward local governance has been the expansion of private neighborhood associations and the like. According to the author, “By 2004, 18 percent—about 52 million Americans—lived in housing within a homeowner’s association, a condominium, or a cooperative, and very often these private communities were of neighborhood size.” Nelson views both as positive developments on the whole. They are, he argues, a manifestation of a growing disenchantment with the “scientific management” of […]

Collective Action Problems Are Similar For Land Use And Schools

I just read a law review article complaining that some white areas in integrated southern counties were trying to secede from integrated school systems (thus ensuring that the countywide systems become almost all-black while the seceding areas get to have white schools), and it occurred to me that there are some similarities between American school systems and American land use regulation.  In both situations, localism creates gaps between what is rational for an individual suburb or neighborhood and what is rational for a region as a whole. In particular, it is rational for each suburb to have high home prices (because that means a bigger tax base)- but I don’t think San Francisco-size rents and home prices are rational for a region as a whole.  Similarly, it is rational for each individual neighborhood within a city to have restrictive regulations, because if one neighborhood is less restrictive it suffers from whatever burdens might result from new housing, without the broader benefit of lower citywide housing costs. How are school districts similar?  Since the prestige of a neighborhood is related to its school district, and the prestige of school districts depends on their socio-economic makeup, it is rational for each suburb (or city neighborhood) to be part of a school district dominated by white  children from affluent families, rather than to be part of a socially and racially diverse district.  But if every middle-class or affluent area draws school district lines in a way that excludes lower-income children, the poor people are all concentrated in a few poor school districts (such as urban school districts in Detroit and Cleveland). Is this rational for the region as a whole?  I suspect not.

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