Is there another way to judge the popularity of various places? Perhaps so. I just uncovered a database of real estate price trends from Redfin. Because housing supply is often slow to respond to demand trends, housing prices probably reflect changes in demand. What do they show?

First let’s look at the most expensive cities: San Francisco and New York City where I live now. If conventional wisdom is accurate, I would expect to see stagnant or declining housing prices in the city and some increase in suburbia. In Manhattan, the median sale price for condos and co-ops was actually lower in 2024 than it was in mid-2019, declining from $1.25 million in August 2019 to $1.05 million in August 2024.* Similarly, in the Bronx multifamily sale prices decreased slightly (though prices for single-family homes increased). By contrast, in suburban Westchester County, prices increased by about 30 percent (from just under 250k to 325k). Similarly, in Nassau County prices increased from 379k to 517k, an increase of well over one-third. So these prices suggest something like a classic suburban sprawl scenario: stagnant city prices, growing suburban prices.

In San Francisco, by contrast, property values declined everywhere. City prices declined from $1.2 million in August 2019 to just under $1 million today; in suburban Marin County, the median price declined from $633k to $583k. So sale price data certainly supports the narrative of flight from expensive cities.

What about places that are dense but not quite as expensive? But New York might not be typical. Let’s look at Boston, another dense, transit-oriented city. Condo prices in Boston have actually risen, from $625k in 2019 to 719k in 2014, about a 14 percent increase. In Middlesex County, prices rose from 485k to 615k- about a 27 percent increase. So prices rose more in the suburbs, but they rose in both city and suburb, indicating stable or growing demand for urban life. The same is true for other relatively dense cities like Philadelphia (19 percent increase city, but over 40 percent increases in suburban Montgomery and Chester Counties), Washington (6 percent city, 21 percent suburban Montgomery County, and Chicago (16 percent increase in city, over a 50 percent increase in suburban Lake County).

What about the Sunbelt? In my home town of Atlanta, city condo prices increased by over 30 percent, from 245k in 2019 to 321k in 2024. In suburban Cobb County, prices rose even faster, from 180k in 2019 to 300k in 2024. Similarly, Dallas prices increased from by about 25 percent (205k in 2019, 266k in 2024), while prices in Collin County to its north almost doubled (153k to 285k). So city prices grew at hefty rates but still lagged behind suburban growth rates.

What about prices for single family houses? Here, the picture is much more complex. In Philadelphia, price patterns for houses were pretty similar to those of condos. But in Boston, there was not much difference: city prices rose by almost 34 percent (from 649k to 870k), and Middlesex County prices by about 41 percent (600k to 850k). And Washington city prices grew by over 50 percent (from 777k to $1.3 million) more than in Montgomery County (about 30 percent) or Fairfax County (35 percent). In metro Atlanta, city and suburban prices both grew by about half (299k to 499k in the city, 287k to 465k in Cobb County).

So it seems to me that the real story might be that there is unmet demand for multifamily housing in suburbs, and unmet demand for houses in some cities.

The post Where sale prices are going up appeared first on Market Urbanism.

Although I’ve been Erdmann’s colleague for most of this time, I’ve maintained wide priors on the question of credit standards. Many other scholars, left and right, are skeptical of the broad, century-long trend of encouraging (and subsidizing) homeownership. Whether or not Fannie & Freddie’s mortgage securitization constitutes a subsidy, it’s hard to argue that it doesn’t influence who can buy a home.

Too cheap to build

The excellent Kalamazoo Debate helped clarify things, probably because it isolates the credit issue from the supply issue.

• Rent in Kalamazoo has become surprisingly high
• But it’s not because of zoning-induced supply constraints
• Houses are still cheap relative to incomes

With these facts, Kevin’s story sounds very plausible:

• Regulators in 2007 shut off credit to marginal potential homebuyers
• Builders could no longer find buyers for entry-level houses, so they stopped building as many
• Rents have not been high enough to justify large-scale apartment construction
• Marginal potential homebuyers were left competing for the fixed stock of rental housing

There are some holes in this argument. Homeownership in Kalamazoo hasn’t changed much over time. Would a temporary 2% drop really shut off the supply of new housing? But if we leave Kalamazoo aside, the national decrease was much larger and the rebound incomplete, so maybe Kevin’s right nationally, at least for post-2000 analysis.

Filter-down economics

Can Kevin and the skeptics both be right? There’s no technical contradiction between these two points, they just have opposite vibes:

• The federal government and GSEs have subsidized homeownership through a variety of means and the US has more homeowners than it would have if the feds were neutral.
• Homeownership subsidies raise the price/rent ratio, keep construction brisk, and put downward pressure on rent.

(We can add: rental subsidies don’t boost construction much because they’re targeted to people who aren’t close to being able to afford new construction and/or because zoning limits the land available for multifamily construction.)

This doesn’t tell us whether subsidies are good or not. It wouldn’t exactly be a surprise if a milk subsidy made milk cheaper, right? Housing markets are weirder than milk markets, but it’s still not that weird to think that housing subsidies make housing cheaper.

MOAR MATH!

Just because the subsidy / filter synthesis is possible doesn’t mean it’s true. The pre-2000 homeownership rate was stable and lower than today’s. Was that just demographics? Is Kevin’s story correct for a working-class slice of the population but less central to the major trends than he believes?

It’s in big, general-equilibrium questions like this that we really need rigorous economic modeling. The facts are available. Can a model match these moments?

The post Toward an Erdmann synthesis appeared first on Market Urbanism.

First, it’s pretty obvious that Harris doesn’t mean 3 million total. That would represent a large drop in housing production; almost 1.5 million residences were completed in 2023. So it must be relative to something – the last four years, a projection into the next four, or some longer-term average.

The business cycle isn’t going to make this easy for Harris – starts in July were 33% below their 2022 peak. Just getting back to 2023 completion rates would be a policy victory! But Harris is right to want more.

How much would 3 million homes lower costs?

In a previous post, I explained how reasonable people can say that America has a 4-million home deficit or a 20-million home deficit. Both are useful ways to look at the problem. And no single cutoff is “right” in the sense that a housing cost crisis is a matter of degrees: each additional house lowers local rents by a tiny amount.

How much would 3 million new homes lower rents? We might like it if all of them were in high-demand places. But that’s not how politics works. So let’s say (optimistically) that 0.5 million net new units end up in the cheaper half of the country and 2.5 million end up in the expensive half. Let’s also assume that the new units are distributed in geography and typology in the same way as the existing stock.

A typical apartment in the expensive half of the country might have a rent of $3,000. Increasing the housing stock in that half by 3.4 percent (2.5m / 73m) would lower rents by something like 5 percent, bringing it down to $2,850. That’s really good!

In the cheaper half of the country, there’s more supply (we’ve assumed half a million homes) but also some outmigration. I’ve got no basis for this, but let’s guess that two-fifths of the new households in the expensive part of the country would otherwise have demanded housing in the cheap half. That gets us a 0.5 million unit increase in supply and a 1 million unit decrease in demand. A typical $1,200 apartment might decrease by 2.25%, to $1,173.

Devilish details

Of course, actual proposals cannot be as broadly simplistic as what I’ve sketched above. Some of Harris’ proposals, like giving large grants to first-time homebuyers, will tend to increase prices rather than decrease them. Others would affect only select cities (those adjacent to federal lands, for example). Nothing I’ve seen from the Harris campaign is likely to shake loose 300,000 building permits, let alone 3,000,000.

But the Harris target is good for two reasons:

• It explicitly acknowledges that availability is the central issue. It’s the reason prices are high, the reason inventory is low, and the reason people can’t find housing where they want it.
• The only way to measure success in an area as multifaceted as housing is to look at big-picture results. A Harris (or Trump) administration should take the same approach to federal grantees: don’t tell me your plans, tell me your accomplishments.

The post Harris’ housing target: Compared to what? appeared first on Market Urbanism.

Continuing this series of book reviews on Jane Jacobs’ works, I now turn to Cities and the Wealth of Nations. But there is already a fantastic piece on the Market Urbanism website, by Matthew Robare, who reviews this book and outlines what Jacobs overlooks in her analysis. So, this piece takes a slightly different angle: inspired by (but not limited to) Jacobs’ ideas, it aims to highlight what mayors, governors and urban policymakers could do differently if they are serious about developing their cities into economic powerhouses. Here are some of the most important takeaways from this book and also how they can be expanded upon.

(1) Focus on cultivating import-replacement

The economies of cities do not grow out of nothing. They grow by adding productive new forms of work to old ones, by innovating, and by being cultivators of new ideas and techniques. This process of cataclysmic growth – that Jane Jacobs describes as ‘import-replacement – occurs when a city takes its existing imports and builds upon them, either improving its production through lowering costs, increasing quality, or innovating. The market for these additional goods can either be found within the city itself or serves to expand the city’s exports. These exports, in turn, bring in additional resources to either acquire additional imports or be reinvested into fuelling the processes that fuel import-replacement. Not for nothing does Jacobs describe import-replacement as a ‘cataclysmic’ process – these changes often happen over a very short period and can bring about a rapid influx of people, ideas and capital. We see this in New York City, which grew from half a million residents in 1850 to over 3.4 million at the dawn of the twentieth century. Detroit went from having 250,000 residents in 1900 to a peak of 1.8 million by 1950. Delhi went from a population of 1.4 million in 1950 to almost 33 million in its larger metropolitan area today. That import-replacement is such a simple idea also makes it one of the most crucial to understand for policymakers. At the end of the day, a city can provide everything it wants in terms of amenities, sprawling parks, leisure centres and cultural venues, but without that fundamental process of import-replacement taking place, an urban agglomeration will not grow and will be confined to decline. To quote Jacobs: ‘artificial symptoms of prosperity or a “good image” do not revitalize a city, but only explicit economic growth processes for which there are no substitutes.’ (The Economy of Cities, Pg 200).

So much for that idea; it is clear that import-replacement must be at the heart of any policy for urban development. How can policymakers leverage this idea when it seemingly depends so much on individual decisions made by companies and entrepreneurs? The first thing to address is what are the barriers that prevent economic import-replacement? Are land-use patterns overly strict and restrictive to new and innovative types of industry? Central to the idea of import-replacement is the idea that new forms of businesses, processes and industries will arise that cannot be foreseen in advance. It is therefore crucial that land-use regulation permits new forms of industries to emerge.

The process that Jacobs describes transcends individual policymakers, instead relying on decisions by financial institutions, entrepreneurs, and thrifty individuals. This should not lead to hopelessness. I would argue (and Jacobs, through her expansive uses of historical examples) that enterprise and trade come very naturally to human beings if the conditions are right. Whilst this does not guarantee that any city can become an economic powerhouse, since important factors including geography, human capital, and chance also play an important role, almost every region contains a dominant urban agglomeration. By minimising barriers to trade and commerce in these areas, ensuring regulation, taxes and land-use is conducive to growth rather than acting as a resistor, cities can begin to tap into the power of import-replacement and grow their economies and those of the regions surrounding them.

Finally, where I diverge from the libertarian-purist perspective is that I argue urban policymakers can play an active role in cultivating growth. For example, by creating forums for entrepreneurs to come together and exchange ideas, encouraging universities to collaborate with businesses so that jobs are created within the city (see HEC Paris’ incubator), and making sure the basic needs of the city (sanitation, safety, etc) are met, cities can help to kick-start the process of import-replacement.

One policy that seldom works, however, is offering large subsidies to companies to locate in a city – often in the form of tax breaks or land grants. There is significant literature outlining how this greatly distorts the allocation of resources on a national (and international) scale. Yet the idea is nonetheless tempting to policymakers if they think it’ll bring regional benefits. The research on this does not suggest this is the case – as highlighted in a recent essay published by the Center for American Progress. Jacobs provides a clear reason for why this is the case in both The Economy of Cities and Cities and the Wealth of Nations. Put simply, big businesses which are ‘transplanted’ into smaller cities do not bring about import-replacement because they are already tightly vertically integrated. Smaller businesses, however, are more likely to tap into an existing or nascent eco-system of other businesses – in a city or elsewhere – to produce its goods. This greatly increases the likelihood of innovation and new techniques being adopted as competitors strive to improve quality and lower prices. Money spent on providing large subsidies can therefore be put to much more effective use if it is instead returned to businesses as a tax cut or channelled into the other factors that encourage import-replacement.

(2) Look at what your city does well

It is not the case that cities can purchase development by simply luring in companies, through tax breaks or other means, to set up transplants in their regions. ‘Development cannot be given, it has to be done. It is a process, not a collection of capital goods,’ notes Jane Jacobs on page 119 of Cities and the Wealth of Nations. For urban policymakers, the lesson that can be drawn from this is that the focus should be placed on the existing things a city or metropolitan area does well. It would be nonsensical for a city like Fort Wayne, Indiana, to spend billions of dollars trying to become the next Silicon Valley. Agglomeration effects matter and remain a central part of how import-replacement happens. For more effective, for small and medium-sized, is to focus on what they already do well and aim to cultivate those industries. This is less difficult than it seems for again, individuals and businesses have a remarkable ability to innovate and lead the import-replacement process themselves if the conditions are right. For urban policymakers, the focus should therefore be on identifying bottlenecks in cooperation. Are land prices prohibitive to the creation of new industries and could zoning reform unlock additional growth? Is the city the kind of place that would attract potential talent, or is crime, housing availability and educational provision undermining its ability to do so? Again, whilst actively picking and choosing winners and losers seldom works, there is an active role that policymakers can play in helping to cultivate growth in existing sectors that are performing well. Cities could partner with chambers of commerce to ensure that businessmen are connected, and ideas spread faster. Collaboration with banks and financial institutions could provide seed money for new businesses to emerge. By first focusing on the basics, then looking at the particular areas of success and finding ways to encourage them further, a city can help kick-start the growth-replacement process.

(3) Beware of over-specialisation

Import-replacement depends on specialisation. Both Jacobs and later, Edward Glaeser (in Triumph of the City) highlight the importance of urban agglomerations which increase the spread of ideas and allow firms to produce new goods and ideas without having to start from scratch. Chris Miller’s Chip Wars provides a vivid description of how this process played out in Silicon Valley, noting how specialisation allows each company to focus on adding value at one specific part of the supply chain, to the point where countless companies now focus solely on chip design, others, like GlobalFoundries focus on manufacturing, yet others on marketing, transportation, the production of equipment. It is far easier to start a company in an environment where not every aspect of the supply chain needs to be replicated and companies instead tap into an existing eco-system. The odds of innovation grow significantly, as a result of lower barriers of entry.

Except over-specialisation is at cross-purposes with the long-term success of a city, if it means that it cannot recover or surmount shocks in global supply and demand. Take the classic example of Detroit, which specialised very heavily in automobile production over the first half of the twentieth century, this growth almost entirely led by private enterprise. When automation and increased foreign competition led to a decline in the Motor City’s primary industry, workers had few alternatives. Many just left, leading to a precipitous population decline from 1.8 million to just over 640,000 today.

I will again stress that a lot of the economic dynamics occurring within a city are not things that policymakers can directly control. Subsidies might work in the short term, but as noted above, their success is very limited in the long run and the money might instead have been returned to residents in the form of a tax cut. Furthermore, no single policy prescription will work for all cities, since each faces a unique set of problems and challenges and mayors must look closely at the problems confronting their particular city.

There are nevertheless some takeaways from Jacobs’ works that might apply here and that mayors and other urban leaders could take to their cities. First is that space and layout matter. Jacobs presents a view of cities that very heavily emphasises the importance of walkability and access. I would push back a little and say that perfect walkability is not always necessary. Yet enterprises and households should be in relative proximity to each other to foster greater exchange of ideas and collaboration. A fifteen-minute drive on the highway might not make a difference. A fifty-minute drive in chock-a-block traffic would. The other ingredients to fostering urban diversity (still allowing for specialisation but in various sectors) include mixed uses of land, sufficient density to provide businesses with customers, older buildings to allow for experimentation (new or experimental businesses often can’t afford new units where costs are very high), and smaller blocks to allow for more street frontage.

Jacobs’ analysis of the factors cultivating urban economic diversity is sound, but it requires further expansion if it is to apply to traditional industry and the new creative industries. In addition to these factors, cities and states should also ensure their processes allow for flexibility and collaboration with regard to permitting and other legislation; they should ensure their processes are clear and transparent, and they should keep costs at a minimum.

Simply wishing for prosperity won’t make it so. The reality is that urban success depends on governance, ideas, and some degree of luck. But another remarkable fact emerges from the literature of Jacobs’ and others I have buried myself in over the last few weeks: human beings have an incredible ability to collaborate and innovate if left to do so. It’s a hopeful takeaway, for it means that success doesn’t depend on policymakers’ abilities to play economic planners and run a city. Focus on the basics, eliminate barriers to growth, advocate for your city, and you may well turn the odds slightly in its favour.

The post Lessons from Cities and the Wealth of Nations: a manual for urban policymakers appeared first on Market Urbanism.

DCP divided the city into “neighborhood tabulation areas” (NTAs) with population ranging from 15,000 to 100,000. DCP’s data showed that the city as a whole lost 2 percent of its under-18 population between 2010 and 2020, but that some areas had significant gains.

The biggest gainers were Long Island City (over 200 percent) and four areas where the under-18 population increased by between 50 and 75 percent (the Financial District, Midtown, Midtown South, and Downtown Brooklyn).

There seems to be a positive correlation between child growth and housing supply growth, even in these expensive areas. In the Long Island City NTA, the number of housing units increased by over 100 percent between 2010 and 2020- so it is no surprise that the number of children increased. Housing supply increased significantly in three of the four NTAs that added the most children. The number of number of occupied housing units increased by 23 percent in the Midtown South NTA, by 26 percent in the Financial District NTA, and by 86 percent in the Downtown Brooklyn NTA. (Central Midtown was an exception to the rule; housing supply increased more slowly there). By contrast, in Manhattan as a whole, the number of housing units increased by only 7 percent, and the number of children actually declined.

Moreover, affluent areas that added very little housing supply tended to gain under-18 residents at a much slower pace. For example, in the three Upper East Side (NTAs) (Lenox Hill, Carnegie Hill, Yorkville) the number of housing units increased by only 1.9 percent and the number of under-18 residents by only 8.9 percent. In two Upper West Side areas (the Central Upper West Side and Lincoln Square) the number of occupied units increased by only 1.4 percent and the number of under-18 residents by only 12.2 percent. In the West Village, the number of housing units actually decreased, and the number of under-18 residents increased by 6.9 percent.

The general pattern among these elite neighborhoods seems to be: where lots of housing is built, lots of children move in. Where very little housing is built, the child population still sometimes increases, but not by as much.

(NOTE: More data is available at popfactfinder.planning.nyc.gov )

The post Swimming against the tide appeared first on Market Urbanism.

Adam Louis Sebastian Lehodey, the author of this collection of essays, studies philosophy and economics on the dual degree between Columbia University and SciencesPo Paris. Having grown up between London and Paris, he is energised by the questions of urban economics, the role of the metropolis in the global economy, urban governance and cities as spontaneous order. He works as an Applied Research Intern at the Mercatus Center.

Since man is a political animal, and an intensely social existence is a necessary condition for his flourishing, then it follows that the city is the best form of spatial organisation. In the city arises a form of synergy, the whole being greater than the sum of its parts, for the remarkable thing about cities is that they tap into the brimming potential of every human being. In nowhere but the city can one find such a variety of human ingenuity, cooperation, culture and ideas. The challenge for cities is that they operate on their own logic. Cities are one of the best illustrations of spontaneous order. The city in history did not emerge as the result of a rational plan; rather, what the city represents is the physical manifestation of millions of individuals making decisions about where to locate their homes, carry out economic transactions, and form intricate social webs. This reality is difficult to reconcile with our modern preference for scientific positivism and rationalism. But for the Polis to flourish, it must be properly understood by the countless planners, reformers, politicians and the larger body of citizens inhabiting the space.

Enter Jane Jacobs. As the story of cities reached a point at which the assault on them seemed so great, so forceful and so fierce that it seemed there was no turning back, Jacobs, in her Magnum Opus ‘The Death and Life of Great American Cities,’ became one of their staunchest advocates, reminding us of their role in cultivating diversity and progress whilst also underscoring the logic on which they operate. It has been over half a century since Jacobs published this seminal work of literature. Its effects have certainly been felt, ushering in a shift in how planners, developers and policymakers alike approach urban planning, shifting their focus onto mixed-use developments, more walkable downtowns, and the cultivation of metropolitan diversity. Yet this book was never intended as an obscure manual for city planners and government mandarins. Rather it should be read as a robust defence of dense urban living aimed at underscoring its importance to overall human flourishing. This essay posits that the uses of cities go far beyond the economic dimension – they extend themselves into forging deep and meaningful human ties, stimulating intellectual and spiritual advancement, and playing an important role in what makes humans human. Revisiting The Death and Life of Great American Cities allows us to see how this continues to be true today and why the vitality and success of our cities are of importance to all who care about the success and flourishing of the human species.

Economic dimension of cities

Addressing the obvious first, very little of the material advancement that humanity has seen throughout its existence would be possible were it not for the economic diversity that cities help to cultivate. If this argument is made explicit at several points throughout the Death and Life of American Cities, it is implicit at every point throughout the book. In connecting millions of people in one place, the city acts as a giant labour market, allowing employers to find talent and workers to make a living. Cities are what translate abstract supply and demand graphs into tangible economic exchange, allowing buyers and sellers to convalesce in one place and permitting mutually beneficial exchange to take place. In a chapter entitled ‘The Need for Concentration,’ Jacobs highlights the role that high densities play in generating economic diversity, namely, that at low densities, businesses offering certain specialised goods could never afford to sustain themselves for there simply wouldn’t be enough demand. The calculation is reversed at higher densities. ‘By its nature,’ she writes, ‘the metropolis provides what otherwise could be given only by travelling; namely, the strange.’ Concentration goes further than providing businesses with consumers. Businesses do not exist in a vacuum, they exist and rely on an intricate network of support from suppliers, financial institutions, vendors and other interested stakeholders, all of which must be derived from somewhere. Connecting all of these people in one place greatly increases efficiencies and further allows for the quick transmission of ideas and innovation. This idea might further be connected with that of Joseph Heinrich’s in chapter 12 of his 2016 book, The Secret to Our Success. There exist many great minds whose discoveries have transformed the course of our civilisation (Edison, Kepler, and Einstein, to give a few examples). But progress and advancement do not depend on these great minds alone, what is needed is the broader diffusion and integration of these ideas into the society at large. Genius alone won’t suffice, as Heinrich’s anthropological examples on Tasmania demonstrate; that long-disconnected island, isolated from the progress and ideas of the broader society, regressed significantly during that time when it was disconnected. Cities, if permitted to do so, have the opposite effect, serving as both cultivators and connectors of new ideas that otherwise would never have been.

Context in which The Death and Life of Great American Cities Emerged

Jacobs goes to great lengths to show why (then) contemporary approaches to urban planning and policy were greatly undermining the role of cities in connecting and cultivating economic diversity. She opens her book with the line: ‘This book is an attack on current city planning and rebuilding.’ That planning and rebuilding to which she was referring in 1961, and to some extent still present to this day despite the influence her works have had, was based on the belief that cities, despite their economic advantages, were not desirable places to live and were instead hotbeds of vice and criminality. Spearheaded by British urban planner Ebenezer Howard, the Garden City proposed an alternative to dense urban growth, designating permitted land uses in specific areas, segregating residential, commercial and industrial uses, and most importantly suppressing densities so they could never rise above a certain point. A slightly amended version of these ideas came in the form of Le Corbusier’s Radiant City (look it up if you’re not already familiar – it’s striking!); modernism in physical form which quickly sprang from the academic to the physical realm with the construction of vast swathes of housing projects across the United States, Soviet Union and beyond. Adding to the malaise of the city was the City Beautiful movement, kickstarted by the Columbian Exposition of 1893 which began a movement of concentrating civic buildings all in one place. The proponents of these three types of new urbanism against which Jacobs takes aim were rarely ill-intentioned, she stresses throughout. However, their ideas were based on a fundamental misunderstanding of what led to successful economic diversity in cities.

For a city to succeed, grow and thrive, mixed-use of both commerce and people is needed so that an area can sustain itself uniformly throughout the day. For new ideas and businesses to emerge and take hold, the city must contain a variety of both new and old units; old units allowing economically risky ideas or with low overheads to exist. For neighbourhoods to improve, change must be gradual rather than cataclysmic, ensuring that communities and neighbourhoods have the time to form robustly. Density, more than anything, matters, but it is essential that this diversity exists in a way that the city can make use of. Density, unless accompanied by mixed-uses, short blocks which permit street life and sustain a variety of economic uses, means very little. From that effective density (that is, a density that is effective because it is combined with reasons for people to intermingle and interact with people outside of their usual social circles, if even lightly), stems all of the other benefits that cities confer: strong communities, safer streets as there will be many people to watch over them, new businesses which can tap into the city’s broader resources, and the opportunity for spontaneous and unplanned social interaction.

In response to the stultifying controls that have been imposed on our cities in the form of planning, land use, parking requirements, and density thresholds (among others) has emerged a vital movement of pro-housing advocates in the post-Jacobs era. The modern YIMBY, or Yes-In-My-Backyard, movement has rightly focussed on reducing controls and ensuring we build as much as possible, wherever possible. Condominiums, high-rises, sprawling suburban developments; new developments in any form are welcomed by YIMBYs as a means of reducing housing costs and enabling people to tap into the untapped potential that cities offer. And rightly so: pro-housing advocates often refer to the so-called ‘housing theory of everything,’ which links a lack of affordable housing to a plethora of social issues, including poverty, lack of access to education, and environmental degradation. There are strong reasons to be sympathetic to these arguments: increasing housing affordability benefits not just those who are already in cities, so too does it permit thousands more to tap into the places where they can be most productive, tap into, and create new opportunities. But Jane Jacobs offers something for us YIMBYs too, by showing us that our cities offer so much more than just economic benefits. But this is only so if urban development takes a particular form.

Cities as cultivators of diversity

‘A city’s greatest asset,’ Jacobs declares, is its ‘very wholeness in bringing together people with communities of interest.’ Cities play a central role in cultivating civic life, they allow individuals with similar interests to come in a way and interact spontaneously in a way that’s never possible at smaller densities. In suburbia, human interaction is governed by ‘togetherness,’ the requirement that much shall be shared,’ amongst residents ‘or else they must settle for lack of contact.’ Parents attend the same PTA meetings, soccer games, and birthday parties. The bar for friendship in suburbia is necessarily higher, for it entails a much greater level of commitment and intimacy. ‘Inevitably the outcome is one or the other; it has to be; and either has distressing results.’ Cities, and particularly lively sidewalks, permit another type of civic life to emerge: one where humans are loosely connected and can then choose to develop these relationships further if they so choose. Jacobs provides vivid examples from her street: the local grocers that one can ask for favours like holding keys, individuals who watch over the children of others and keep them out of trouble, ‘connectors’ who know many individuals loosely and, in connecting them, bring about the political fabric required for self-governance.

One critique levelled at Jacobs’ urban vision is that it is overly rose-tinted. This is not the case: in New York, in London, in Paris, there continue to exist pockets of urban life with a strong underlying social fabric, needed now more than ever in an age where people are increasingly inward-looking as a result of social media. Surrounding the Great Cities is another model: areas like the Clarendon neighbourhood in Virginia are a good illustration of how we can tap into the benefits of density and concentration whilst still allowing those in the suburbs to tap into these vibrant areas.

The city, notes Aristotle in Book 3 of Politics, ‘must be regarded not just for the sake of living together,’ but rather ‘for the sake of noble action.’ Jacobs is in many ways an intellectual heir of this thought: presenting why the spatial dimension matters in how we live, showing how concentration and lively mixed-use sidewalks cultivate further diversity, progress and strong civic life, then underscoring why not any form of planning will do: only that which permits for spontaneous use cases, that is not overly regimented, and most of all allow for cross-use and walkability, will suffice.

Jacobs and the defence of cities

The genius of Jane Jacobs is that her critique, in The Death and Life of Great American Cities, is not limited to that. This work of literature, and the richness in which her prose and descriptions come together to form an image of the city truly do make it a work of literature, fundamentally challenges the status quo and persuades us as to why urban life is so desirable. Americans have come to view the American Dream and suburban life with a white picket fence as synonymous. Jacobs urges us to look beyond that, to recognise that the city is not a place we should be resigned to living in because of the economic effects. Rather, The Death and Life of Great American Cities is a reminder of how the diversity of cities is just a reflection of the individuality and uniqueness inherent in every one of us.

The post The Death and Life of Great American Cities, Revisited appeared first on Market Urbanism.

Edgar Olsen and Dirk Early estimate that Housing Choice Vouchers – aka Section 8 – have a respectable benefit to taxpayer cost of 77%. Other forms of social housing, including LIHTC, perform much worse, delivering value to recipients of between 19% and 51% of the cost to the taxpayer.

But how good are the estimates? Olsen and Early do their own work on the benefit side, using 2013 American Housing Survey data. It’s not the last word on the matter, but it’s clear, recent, and replicable.

On the cost side, however, Olsen and Early rely on other researchers’ findings. The best evidence comes from papers published in 1980 (for public housing), 1981 (for HUD-subsidized privately owned projects), and 2002 (GAO). The only recent evidence is on vouchers, from Olsen’s own work (2019).

This shows, frankly, a shocking incuriosity from government functionaries and academics, the majority of whom favor greater spending on social housing. As Olsen and Early note, most of the increase in U.S. social housing comes from LIHTC spending — which the meager available evidence finds to be the very least effective way of providing social housing.

Congress won’t have the courage to shift LIHTC spending to vouchers. But it should, at minimum, require a rigorous update of the Government Accountability Office’s 2002 study.

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Like other authors, Marohn and Herriges discuss the history of downzoning. For example, in Somerville, Mass., a middle-class suburb of Boston with 80,000 residents, only 22 houses conform to the city’s own zoning code. And in San Francisco, 54 percent of homes are in buildings that could not legally be built today. In Manhattan, 40 percent of buildings are nonconforming. Why? Because zoning has become steadily more restrictive over time, making new housing difficult to build.

Where development occurs, it is in a tiny fraction of the region’s neighborhoods- usually, either at the outermost fringe of suburbia or in a few dense urban neighborhoods. For example, in Hennepin County, Minnesota (Minneapolis and its inner suburbs) 75 percent of all housing units built between 2014 and 2019 were in 11 percent of the county’s neighborhoods. In Cuyahoga County, Ohio (Cleveland and its inner suburbs) 75 percent of housing units were built in under 5 percent of the county’s neighborhoods.

Marohn and Herriges also critique some anti-housing arguments. For example, one common argument is that only public housing is useful, because the very poor will never be served by the market. They correctly respond that even if there will always be some people in need of government assistance, adequate housing supply will reduce that number. They write that housing policy “will look very different in a situation where the market is failing to serve 5% of people with adequate housing versus a situation where the market is failing 20% or 30%. In the latter scenario, choices get harder, resources more strained, and decisions about funding priorities become more painful and zero-sum.” (p. 136) They further note that Vienna’s widely-praised program of extensive public housing is infeasible without tax increases; the program is funded through a local income tax, and cannot easily be copied in the U.S. because Vienna’s municipal government owns an ample amount of land.

Like Gray and Caplan, the authors are basically YIMBYs*- that is, they favor less zoning and more housing. But they are skeptical about the ability of the market as currently structured to provide a significant amount of housing, In particular, they quote one developer’s statement that “There are only so many towers and multifamily things we can build. There’s a limit to the workforce, permitting, the availability of cranes.” But I’m not sure why there should be a fixed supply of construction workers or cranes; presumably, manufacturers would make more cranes if demand was adequate, and employers could hire and train more construction workers.

So the authors favor a strategy of “incremental development”- that no neighborhood should experience radical change, but every neighborhood would allow modest change. For example, they write that “for a neighborhood of single-family homes, the next increment must include duplexes and backyard cottages.” (p. 157)

But this argument makes me wonder: if reliance on large-scale developers won’t produce enough housing units to keep costs down, why would reliance on homeowners’ willingness to build a duplex here and there?

The authors suggest that South Bend, Indiana, is an appropriate role model. In South Bend, government introduced pre-approved building templates to make small-scale development easier, and creates technical assistance for small-scale developers. But if I read Census data correctly, it seems like about 6 percent of South Bend’s housing has been added since 2010- not a terrible result, but not a significantly higher number than other Indiana cities like Bloomington, Fort Wayne and Evansville.

Marohn and Herriges have proposed a program of modest improvements- and this program might be the best option that is politically feasible in most of North America. But is this program strong enough to bring rents down? I doubt it.

*YIMBY is an acronym for “Yes In My Back Yard” and is often used to describe people who favor more housing.

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