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Urban[ism] Legend: Greedy Developers

This post is part of an ongoing series featured on Market Urbanism called Urbanism Legends. The Urbanism Legends series is intended to expose many of the myths about development and Urban Economics. (it’s a play on the term: “Urban Legends” in case you didn’t catch that) We’ve all heard it said by some NIMBY activist: “This greedy developer doesn’t care about the people of the neighborhood, he just wants to maximize his own profit.” Are developers the devil? No doubt, developers usually are self interested, and seek profit. However, just like in any business, profit seekers must try to satisfy the desires of its customers better than its competitors. The successful developer must direct capital towards creating value in the real estate market for potential customers. So, perhaps it seems particularly greedy that a developer who is creating value in a community, cares less about the current inhabitants than newcomers. But, as Henry Hazlitt wrote in the classic, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics: the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. here’s a link to the quote in an online version of the book Most Urbanism Legends, like most economic myths, rely on looking at policies from the perspective of one group without looking at the effects on other groups and society as a whole. This Urbanism Legend is no different. Looking deeper at the issue, the developer represents the needs of the community in a less visible, yet […]

Abandoned Cities

Here’s a link to a very interesting article at weburbanist.com with photos of 20 abandoned cities and towns around the world – 20 Abandoned Cities from Around the World: Deserted Towns and Other Derelict Places

Unintended Consequences of Stop Signs

The latest edition of the Atlantic Monthly features an article by John Staddon, a Professor of psychology and brain sciences at Duke University. The article discusses some of the differences in how the US and Britain regulates traffic and how there are unintended consequences to over-regulation. Distracting Miss Daisy: I began to think that the American system of traffic control, with its many signs and stops, and with its specific rules tailored to every bend in the road, has had the unintended consequence of causing more accidents than it prevents. Paradoxically, almost every new sign put up in the U.S. probably makes drivers a little safer on the stretch of road it guards. But collectively, the forests of signs along American roadways, and the multitude of rules to look out for, are quite deadly. Economists and ecologists sometimes speak of the “tragedy of the commons”—the way rational individual actions can collectively reduce the common good when resources are limited. How this applies to traffic safety may not be obvious. It’s easy to understand that although it pays the selfish herdsman to add one more sheep to common grazing land, the result may be overgrazing, and less for everyone. But what is the limited resource, the commons, in the case of driving? It’s attention. Attending to a sign competes with attending to the road. The more you look for signs, for police, and at your speedometer, the less attentive you will be to traffic conditions. The limits on attention are much more severe than most people imagine. And it takes only a momentary lapse, at the wrong time, to cause a serious accident. The tragedy of the attention commons concept reminded me of a video I recently came across on youtube called “Awareness Test.” In fact, the article refers to the […]

Hyde Park Chicago Before Zoning

photo by flickr user mandus I recently came across a great blog, Hyde Park Urbanist, which focuses on urbanism in the Hyde Park neighborhood of Chicago. Hyde Park is located along Lake Michigan on the South Side and is the home of The University of Chicago as well as Frank LLoyd Wright’s famous Robie House and Chicago’s Museum of Science and Industry. A recent article discusses how the area originally grew unhampered by zoning, with streets lined with businesses and shops. Then, urban renewal schemes disrupted the natural patterns of living. Presently, planners are seeing the folly of past ambitions. Unfortunately, we have to keep our eyes on the planners as they test out newfangled schemes for future generations to untangle. Hyde Park Urbanist – Before Zoning: this post is about what happened before zoning began to shape Hyde Park’s urban landscape. “urban renewal”, when the commercial heart of Hyde Park was suddenly ripped out. Planning in the late 1950s was primarily about separating residential, commercial and industrial districts. A couple generations later, most planners believe that residential and commercial uses can be combined along one block. That’s a lesson in itself. Half of today’s planning notions will look terribly wrong 50 years from today; we just don’t know which half. The commercial building patterns that Rossi describes occurred before zoning became mildly effective in the late 1920s. Those patterns can be seen as natural, in the sense that they were a response to the marketplace rather than the result of government fiat. (emphasis mine) I recommend checking out the Hyde Park Urbanist’s blog, especially for you Chicagoans…

$5 Gas and Commuting Costs

Environmental and Urban Economics – Commuting Cost Arithmetic When people work in the suburbs, will they save many gallons of gasoline if they move to the center city? Yes, they will be closer to their center city friends and stores but they will still need to reverse commute by car to their jobs (unless they can ride the Google Bus from Center City San Fran to Mountainview). So this raises the question of whether high gas prices will push employers to move back to the center city? Employers who need land (think of Google) will be unlikely to want to rent out 35 stories of a skyscrapper. Total One Way commute cost = price of a gallon of gas + hourly wage Case #1: you make minimum wage = 5 + 7 = 12 and the share of expenditure on gas = 5/12 Case #2: Ivy League graduate = 5 + 100 = 105 and the share of expenditure on gas = 5/105 So this simple example highlights how the wage can swamp the price of gas for the high skilled but for the less educated, gas is a huge part of the commute cost. Interesting point. CBDs tend to attract highly talented workers, who tend to earn higher salaries. So, will those people have the incentive to move closer? Probably not much. However, there are plenty of middle wage workers who commute to CBDs, and may be tempted to locate closer. But, a firm that desires to attract the most talented workers will most likely locate in the CBD anyway. Thus, I wouldn’t expect as much difference in firm location preference, compared with the shifts in housing location preference. Those who work in suburban locations may end up moving closer to their jobs, making living patterns more compact near […]

link: Medieval Cities

I have little expertise in Medieval Cities and have little input, but thought it was interesting: Marginal Revolution – Medieval cities: Europe vs. the Arabic world also, Econlog – Producer and Consumer Cities Cities in the Arab world were on average much larger than those in Europe, and the size of the “primate” city – the megapolis such as Baghdad, Damascus, Cairo or Istanbul – was much bigger; a fact that is indicative of a predatory state and low trade openness. Europe, on the other hand, developed a very dense urban system, with relatively small principle cities. Big cities in Europe were quite often located near the sea, being able to optimally profit from long-distance trade, whereas the largest cities in the Arab world were almost all inland. The sociologist Max Weber introduced a distinction between ‘consumer cities’ and ‘producer cities’. Using this classification, Arab cities were – much more than their European counterparts – consumer cities. The classical consumer city is a centre of government and military protection or occupation, which supplies services – administration, protection – in return for taxes, land rent and non-market transactions. Such cities are intimately linked to the state in which they are embedded. The flowering of the state and the expansion of its territory and population tend to produce urban growth, in particular that of the capital city. In Europe cities are instead much closer to being producer cities. The primary basis of the producer city is the production and exchange of goods and commercial services with the city’s hinterland and other cities. The links that such cities have with the state are typically much weaker since the cities have their own economic bases. It is this aspect that accounts for the fact that Arab cities suffered heavily with the breakdown of the […]

How to Obscure Reality to Make Planners Seem Important

Regular reader, Bill forwarded this article from the New York Daily News calling it an “outstanding collection of anti-density and anti-market propaganda presented (as always) as objective journalism.” The article is riddled with misconceptions (aka Urbanism Legends) about zoning and development and is a perfect example of the quality of journalism that touches on city development issues referenced in today’s earlier post, Journalists and Cities. Let’s spot the more egregious statements from City and residents aim to keep Rockaway low-density: “The hope is to spur investment by maintaining low-scale development that fits into the area’s historic character. Similar zoning changes in Bay Ridge, Park Slope and the West Village along the Hudson River inspired great growth.” hmmm, restrictions inspire growth? Rockaway’s last zoning change came in 1961, allowing multifamily homes to be built where single-family homes once stood. The results were rapid development and streets butchered by an ungainly mix of large and small apartment buildings and homes. Wait, growth is bad? “We don’t have the space to be densely populated, and the owners of these big buildings don’t even live here” more space :: more density? not the equation I learned “Home prices should begin a steady increase if this zoning gets us better transportation.” This “zoning” that brings transportation sounds even nicer than the tooth fairy, and just as real. “I don’t know if the new upzoning of 116th St. will work, but I do know that the old, low-scale zoning on 116th St. did not bring in the amount of new businesses and investment required to improve the area.” Then again, density is good for retail… To ensure that parking does not become a problem, Gaska worked with Burden’s city planners to ensure that each new development has parking for at least 85 percent of the residents, […]

Journalists and Cities

Here’s a link to an interesting article by Scott Page at Planetizen called A Journalistic View of Cities Scott discusses how mainstream journalists are poorly equipped to write appropriately on urban issues aside from than architecture. I was reading the New York Times Magazine special architecture issue a few weeks ago when something jumped out at me. On the intro page to the issue of the “Mega-Megalopolis” one of the by-line says “How does an architect plan for a city with no history? Or a city that just keeps growing?” Interesting questions particularly given the fact that to charge architects with the task of planning our cities is affording too much power to a profession that simply doesn’t have it. Nor do planners for that matter. I’ve made it no secret in this blog that cities are the product of thousands of decisions made by individuals, organizations, leaders, businesses among others. We have the opportunity to guide some of those decisions and make more informed choices but the days of Hausmann and Napoleon who transformed Paris in the span of a few decades are coming to a close. Yes, yes, I know that China and a handful of other places are building cities ridiculously fast today and I also know that starchitects are generally charged with the task of creating large master plans to guide this government-sponsored development. I think we also know how unique a situation that is. Architects are flocking to build in China and Dubai precisely because of this unique opportunity. Where else can you feel like Robert Moses or Albert Speer, able to shape a city in a single bound? But what struck me most about the architecture issue is that the public’s perspective on cities today is written primarily by architecture critics. (emphasis mine) What’s […]

Social Networking With Market Urbanism

Last week, a reader submitted a Market Urbanism post to Reddit, a social networking site. The submission generated quite a bit of traffic from the economics category on Reddit.  It was #3 on the hot list for economics for a while that day. Seeing what kind of traffic that can be generated from Social Networking, I created accounts at the main sites I am familiar with: Here are links to connect with Market Urbanism at Reddit, DIGG, and del.icio.us. I am not so well versed in the best ways to do this type of social networking, so leave a comment of you have any advice on how make the best use of social networking…

Urban[ism] Legend: Zoning Creates Density

This post will be the first of many of an ongoing feature at Market Urbanism entitled Urbanism Legends. (a play on the term: “Urban Legends” in case you didn’t catch that) In many public forums and in the blogosphere, I consistently encounter myths about land development and Urban Economics. These myths typically look at how policies may benefit or harm a specific person or groups of people. However, as with many popular economic misconceptions, these viewpoints fail to look at how a particular policy may affect other, less visible people. These less visible people are the ones who William Graham Sumner called “The Forgotten Man” in a famous 1883 lecture. These myths are plentiful, and I expect the feature to be stocked with myths to dispel well into the distant future. In many different contexts, I have heard people argue that liberalizing zoning restrictions will cause “over development” or high density development filled with low income people. Even in relatively low density areas, people make the sensationalist argument that if zoning restrictions were lifted, high rises would be built in their community, creating congestion and overburdening infrastructure. On the other end of the spectrum, I have even heard free-market advocates argue against Smart Growth and other urbanist concepts using several Urbanism Legends. They argue that Smart Growth goes against the market and causes density to increase in urban areas. They are correct when they refer to Urban Growth Boundaries that restrict development in outlying areas. Strangely, these market advocates rarely applaud Smart Growth proponents advocacy for loosening zoning restrictions in infill areas. They have argued that the upzoning discourages single family homes, which is the desired living arrangement for most people. And that the market should allow for more single family homes. The reality is that zoning can not create […]

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