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Reforming Zoning in a Kludgeocracy

To market urbanists and many others, it’s clear that there is a positive relationship between high housing costs and land-use restrictions and that liberalizing zoning would lower housing costs relative to what they would be in a more regulated environment. Given this relationship, reducing zoning would improve efficiency in the housing market by allowing consumer demand to drive the amount of resources that are put into housing development. However, land-use reform would also affect other policy areas such as public schools, transportation infrastructure, and sewer and water provision. Predicting how a liberalizing reform in one policy area will affect the complete public policy landscape is as impossible as predicting how one private sector innovation will affect other markets. Political scientist Steven Teles coined the term “kludgeocracy” to describe the complexity of contemporary American policy. For example, zoning has become a tool to make high-performing public schools exclusive, even though land-use policy and education policy are seemingly unrelated areas governed by different agencies. Because providing zero-price quality education to every child in the country may be impossible, zoning is a kludge that allows policymakers to provide this service to their high-income and influential constituents. Teles describes this policy complexity: A “kludge” is defined by the Oxford English Dictionary as “an ill-assorted collection of parts assembled to fulfill a particular purpose…a clumsy but temporarily effective solution to a particular fault or problem.” The term comes out of the world of computer programming, where a kludge is an inelegant patch put in place to solve an unexpected problem and designed to be backward-compatible with the rest of an existing system. When you add up enough kludges, you get a very complicated program that has no clear organizing principle, is exceedingly difficult to understand, and is subject to crashes. Any user of Microsoft Windows will immediately grasp the concept. […]

Economist David Friedman Says India Must Go Taller To Make Homes Affordable

In this exclusive interview to PropGuide, legendary economist David Friedman, who studied at Harvard University and University of Chicago, says that the government should allow developers to build high-rises to make homes affordable for everyone by 2022. I met David Friedman at Starbucks in Connaught Place, the Central Business District of Delhi. Starbucks, which exemplifies the age of aesthetics, tends to maintain consistency in look, feel and attitude across the world. But, its store in Delhi’s premier market reeks of traditionalism, with bare cement interiors, local crafts and furniture. The Connaught Place market, though somewhat dilapidated, is one of the most expensive office spaces in the world. Starbucks, which does not have many outlets in India, bought space here because as per its brand values, it cannot afford to open stores where the catchment area does not justify the investment. The young men and women who listened to Friedman consuming expensive retail space without consuming the expensive coffee epitomize India’s leisurely café culture. Economist David Friedman is one of the most creative minds of our times. Friedman studied Physics at Harvard and Chicago, and has never taken a course for credit in economics or law. But, the finest of minds vouch that Friedman’s class on legal systems is the best economics course in the world. David Friedman is the son of Milton Friedman, the 1976 winner of Nobel Prize in Economics, and economist Rose Director. Rose Director was the co-author of Milton’s best-selling book, ‘Free to Choose’ and sister of economist Aaron Director who was instrumental in the development of the Chicago School of Economics. Here are excerpts from an interview: Shanu Athiparambath: Economist Tyler Cowen said that when he visited India, he was surprised to see crowded streets where nothing happened. He couldn’t see their possessions, because they live on the streets. Why are so […]

Market Urbanism MUsings Feb 12, 2016

  1. Where’s Scott?: Scott Beyer returned to New Orleans for the end of Mardi Gras. This week at Forbes, he wrote a 4-part series on the “Quirks of New Orleans Culture,” covering things like Second Line Parades, King Cake, Mardi Gras Balls, and other idiosyncrasies. There are certain commentators who will argue that, thanks to gentrification, corporatism, and globalization, U.S. cities are losing their cultural distinctiveness. These people should really try leaving their rooms more often. One thing I’ve noticed while traveling is that cultural differences, in fact, remain alive and well in America. And nowhere is this more evident than New Orleans. 2. At the Market Urbanism Facebook Group: John Morris shared Daniel Hertz’s latest, Report: Market-rate housing construction is a weapon against displacement;  and some good news from Los Angeles LA’s Metro Going to Start Charging For Parking at Rail Stations Tory Gattis notified readers about Club Nimby, a new blog by Austin attorney Chris Bradford (of Austin Contrarian fame) that tries to better explain the phenomenon of American Nimbyism. We don’t talk about Atlanta enough, so Mike Lewyn shared Atlanta’s War on Density “The data says we’re right,” says Nick Zaiac about the report on market-rate development 3. Elsewhere: fxstreet.com covers Chicago‘s dreary financial situation, namely for the public school system. Bond buyers would have the promise that CPS will use its “full faith and credit” to repay the bonds. There’s only one problem. It’s a lie, and the district officials know it. The term “full faith and credit” means that a borrower will use all assets available to repay a debt. But Chicago’s school system, in the footsteps of Detroit two years ago and now Puerto Rico, has no intention of foregoing other expenses to pay bondholders. Charles Marohn loves Memphis, but not the “orderly but dumb” pyramid. MU twitter poll on the likelihood […]

Market Urbanism MUsings: Feb 5, 2016

1. This week at Market Urbanism: Nolan Gray‘s second article at Market Urbanism:  Return to Sender: Housing affordability and the shipping container non-solution the belief that these projects could address the growing affordability crisis hints at a profound misunderstanding of the nature of the problem and distracts policymakers from viable solutions. 2. Where’s Scott?: Scott Beyer is spending Friday in Mobile, AL, to celebrate Mardi Gras where it was invented. His article this week was at Forbes:  Washington, DC Reformed Its Zoning Code; Now Time To Ditch The Height Limits The DC zoning code changes are a testament to this growing consensus favoring deregulation. If it can happen in America’s center of governance, it means similar zoning overhauls may be awaiting other cities. 3. At the Market Urbanism Facebook Group: Alex Tabarrok of Marginal Revolution‘s Quora response to “What do economists think about buying vs renting a house?” via Nolan Gray It’s Superbowl Weekend, and John Morris had coffee with Pittsburgh Post-Gazette columnist, Brian O’Neill to explain why he wants to ‘Tear down Heinz Field’ (Pittsburgh Steelers) Krishan Madan informed us that Cincinnati Built a Subway System 100 Years Ago–BUT NEVER USED IT Sandy Ikeda shared a Guardian piece on the role of cities in shaping musical genres Speaking of music, let’s all sing the “Monorail Song” with Nolan Gray 4. Elsewhere: Alon Levy, Pedestrian Observations:  Why Costs Matter Joe Cortwright at City Observatory:  Don’t demonize driving—just stop subsidizing it Justin Fox: Why parking your car for free is actually expensive (h/t Donald Shoup) see this too Floating cities in Tokyo Bay??  (h/t Jeff Wood) RIP Bob Elliott:  Bob and Ray on Urban Planning  (h/t Michael Strong) Chicago may eliminate the Clybourn Planned Manufacturing District.  A move Adam Hengels called for in 2014. 5. Stephen Smith‘s Tweet of the Week: SF & NYC’s experiences w/density bonuses/mandatory IZ suggest to […]

Return to Sender: Housing affordability and the shipping container non-solution

Shipping container homes in Cuba

Washington, D.C. has a monopoly on many things. Bad policy, unfortunately, isn’t among them. Last month, a development corporation in Lexington, Kentucky installed a shipping container house in an economically distressed area of town to improve housing affordability. The corporation is a private non-profit, though a line near the end of this article indicates that the project received public support: “The project is funded through an assortment of grants from the city’s affordable housing fund [and two philanthropic organizations].” Shipping container projects designed to improve housing affordability aren’t limited to my Old Kentucky Home: a quick Google search reveals that the idea of using shipping containers to put a dent in housing costs is popular among policymakers and philanthropists all over the world. The sad reality is that shipping container homes likely have little—if any—role to play in handling the nationwide housing affordability problem. Aside from being inefficient for housing generally, there’s decent evidence that shipping containers appeal far more to reasonably well-off, single urbanites than to working families in need of affordable housing. More broadly, the belief that these projects could address the growing affordability crisis hints at a profound misunderstanding of the nature of the problem and distracts policymakers from viable solutions. Before digging into the meatier problems, it’s worth looking first at the problems with the structures themselves. I’ll yield to an architect: Housing is usually not a technology problem. All parts of the world have vernacular housing, and it usually works quite well for the local climate. There are certainly places with material shortages, or situations where factory built housing might be appropriate—especially when an area is recovering from a disaster. In this case prefab buildings would make sense—but doing them in containers does not. The source goes on to detail the enormous costs associated with zoning approval, insulation, and utilities. Then there’s the somewhat obvious fact that they’re small. As in, 144 square […]

Market Urbanism MUsings: Jan 29, 2016

[this is a pilot for a regular weekly series rounding-up the week’s happenings in the world of Market Urbanism.  I’d love to get your feedback in the comments or contact us directly.  If the response is positive, we’ll continue it.] 1. Here at Market Urbanism, Scott Beyer wrote about Charlottesville developer Oliver Kuttner for his series on America’s Progressive Developers.  Not uncommon in US cities, Kuttner faces ever increasing obstacles to innovative development: I do believe that every time you add an extra layer in city hall, you make interesting buildings less likely. 2. Scott was also quoted in The New Tropic about Miami gentrification: If you have a population increase and you don’t increase housing, people will get pushed out read the rest of the quote and article here. 3. At the Market Urbanism Facebook group: Nolan Gray shared some encouraging news about D.C.‘s new zoning code. Similar good news from Hartford, Connecticut! via John Morris China to build worlds largest Mega-City.  “What could possibly go wrong?” asks Mark Frazier. Trump thinks Eminent Domain is wonderful via Anthony Ling. 4. Elsewhere: Michael Lewyn at Planetizen: Right to the City Daniel Hertz at City Observatory: In some cities, the housing construction boom is starting to pay off Dan Savage jumps on the SFyimby bandwagon: When It Comes to Housing, San Francisco Is Doing It Wrong, Seattle Is Doing It Right, Cont. Jonathan Coppage at The American Conservative: Why San Francisco Has to Build Up Kim-Mai Cutler at TechCrunch:  A Long Game Chicago‘s proposed anti-Airbnb ordinance limits the number of nights a host can have guests, an additional 2% tax on top of Chicago’s 17.5% hotel tax, and possible jail-time for users!  Let’s hope the opposition triumphs. Strong Towns interviews @stuckbertha (that Tunnel Boring Machine that got stuck 1,000 ft under Seattle) during #NONEWROADS week 5. And finally, Stephen Smith‘s tweet of […]

A Public-Private Shopping Mall

Forest City Enterprises recently received approval from Arlington County to redevelop its Ballston Common Mall. The deal is a public-private partnership in which the county will pay for $10 million in infrastructure improvements around the mall and provide $45 million in tax increment financing for the reconstruction. The deal is not only a waste of taxpayer money, but it also perpetuates development through political favoritism as opposed to allowing competition to determine the best use of land. Opened in 1986, today Ballston Common Mall is a sad structure with a high vacancy rate. However, a public-private partnership isn’t needed to turn it into an updated, profitable development. The mall sits on incredibly valuable land. A nearby parcel less than half the size of the mall site recently sold for $7.5 million. With demand so high for land along Arlington’s Rosslyn-Ballston Corridor, county money certainly isn’t needed to facilitate retail development. The mall owner, Forest City Enterprises, is well-versed in navigating public-private partnerships. In DC the company has received over $100 million in subsidies for recent projects. Forrest City Ratner, the corporation’s New York office, was the developer of the famed Atlantic Yards (now Pacific Park) project that has become a poster project for cronyism in real estate. Like the Atlantic Yards project, the Ballston Common Mall redevelopment will involve both direct subsidies and a TIF. The TIF that will help finance the new mall is debt financing that will be paid back with property tax increases that county officials believe the new mall will bring. This will be the first TIF ever used in Arlington. The Ballston project follows a high-profile retail development in Fairfax County, where the Mosaic District was completed as that county’s first TIF. By allowing municipal policymakers to spend future tax revenues today, TIFs provide a tool for obscuring the costs of economic development […]

A Smart City in Your Pocket: From top-down command centers to bottom-up app markets

Woman sitting on a bench in a park using a smartphone

  Cities, for most of human history, were dumb. At least, that’s what the “smart cities” movement might lead you to believe. Over the past few years, a chorus of acquisitive multinational tech corporations, trend-savvy politicians, and optimistic developers­­—an odd mixture of former SimCity players, in all likelihood—has come to sing of technology’s potential to solve urban problems. Through implementation of technologies like augmented physical infrastructure, central command centers, and information exchange, proponents of smart cities argue that information technology offers new solutions to old problems like trash collection, public health, and traffic congestion. While the movement’s ideological variations are many and varied, a focus on top-down smart city solutions has ultimately distracted urban observers from the bottom-up smart city revolution that’s already underway. In his 2014 book Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, scholar Anthony M. Townsend paints a troubling picture of the former in Rio de Janeiro’s modestly titled Center for Intelligent Operations. Developed by IBM, the center acts as a hub for hundreds of surveillance cameras and sensors. At best, the center achieves little more than, in Townsend’s words, “looking smart.” At worst, the center seems to be a regression back to twentieth century centralization. Townsend’s explorations of Songdo, South Korea, a city purported to be both centrally-planned and smart, hardly quells these concerns. The discussion leaves the reader with a healthy skepticism of top-down smart city solutions. Other criticisms have made the top-down smart city feel less like something out of 1984 and more like something out of Terry Gilliam’s Brazil. In a couple of recent posts, Emily points out the roadblocks presented by poor incentives and a lack of market signals, both for politicians and high-ranking public servants. For similar reasons, both parties lack the incentives to implement […]

An interview with David Block-Schachter, Chief Scientist of Bridj

Public transportation service provision is changing. As I already have mentioned in this post at Caos Planejado, microtransit services are growing in many cities around the world and one of the forefront companies on this field is Bridj, operating in Boston since June 2014 and Washington DC since May 2015. I had the opportunity to interview David Block-Schachter, Chief Scientist of Bridj at Bridj’s office in Boston last October. Check it out: Marcos Paulo Schlickmann: Could you tell a little about yourself and your inspiration to work in this field? David Block-Schachter: About 8 years after finishing my bachelor’s I went back to school to do a PhD in transportation at MIT. After the PhD I worked for the MBTA as their Director of Research and Analysis to understand how they can use their data to improve operations. After that I joined Bridj. We wanted to improve mass transit generally, and looked at the issues here in Boston as our first focus. And obviously my background helped too. We also looked at informal transit systems all around the world. When I went to Rio I noticed how the buses are at a disadvantage, because the traffic itself is so unreliable that if you have a car you would prefer to be stuck on traffic in your car than in the bus. So we asked ourselves: “How can we use technology to combine the direct service associated with small vehicles with the good level of service we see in mass transit systems in America and Europe without inheriting the defaults and drawbacks of each system?” And the main advantage of direct trips instead of changing vehicles can be addressed by technology. MPS: As we see on the map depicting Bridj’s service areas, the company runs buses in 3 main areas with two main lines: Allston/Coolidge […]

A response to Interfluidity

On Interfluidity, Steve Randy Waldman posted some criticisms of the market urbanist position. The post was interesting, though I took issue with a few specific points. The following are my responses. Regulatory Authority as a Property Right The customary property rights surrounding homeownership in many cities and suburbs include much more than the use of a square of earth and whatever is built on it. Existing homeowners bought into particular neighborhoods in large part because of their “character”, which includes nice-sounding things like walkability or “charm”, as well as not-so-nice-sounding things like access to exclusionary education. I don’t buy the idea that local control of zoning is a customary property right. A property right implies someone owns something in a definitive way and can make decisions as to the disposition of said something within whatever bounds are prescribed by law. Land use regulations don’t work that way. The relative influence over land use between two homeowners comes down to arbitrary factors like who’s more charismatic in the homeowner’s association or who shows up most frequently at planning meetings. However, if we were to make authority over land use more like a property right, I might actually like that. Ideas like Tax Increment Local Transfers, state taxes on the municipal use of zoning authority, and municipal corporations with residual claimants move us to a world where authority over land use actually looks like something that can be bought, sold, and taxed. I’m partial to the idea of deregulation, but if reform means creating a market in which we can pay off NIMBYs, I can get behind that too. The Normative Case Against Deregulation “Zoning reform” is an anodyne way to describe an expropriation of those customary rights. It amounts to diminishing residents’ ability to preserve or control the evolution of their neighborhoods, in […]

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