Market Urbanism – Page 60 – Liberalizing Cities From The Ground Up

The Renewed Debate on Inclusionary Zoning

Stephen Smith and I co-wrote this post. In case you haven’t been following Stephen elsewhere, he’s also been writing at The Atlantic Cities and Bloomberg View. This year, some of the first apartments and condos subject to inclusionary zoning laws in DC are hitting the market, stoking debate over development laws that the city adopted in 2007. The inclusionary zoning requirement is currently stalling the city’s West End Library renovation with Ralph Nader leading efforts to include an affordable housing aspect with the library project. Inclusionary zoning advocates often base their support on the desirability of mixed-income neighborhoods, while challengers argue that inclusionary zoning is an inefficient way to deliver housing with unintended consequences. Heather Schwartz, who studies education and housing policies at the RAND Institute, says that one important feature of this policy tool is that it gives low-income families access to high-income neighborhoods while at the same time limiting the number of low-income residents in a neighborhood. She said, “Since IZ is a place-based strategy that tends to only apply to high-cost housing markets, it can offer access to lower-poverty places than housing vouchers and other forms of subsidized housing have historically done.” David Alpert, editor-in-chief of Greater Greater Washington, a local urban planning blog, offers another argument in favor of inclusionary zoning, “a policy that builds support for both greater density and affordable housing,” he said in an email. “Much of the opposition to greater density involves a feeling that it is just a ‘giveaway’ to developers who make the profit and impose some collateral burden on a neighborhood, but many people are more supportive of the density if it serves an affordable housing goal.” While inclusionary zoning proponents may see its ability to introduce just a few low-income residents to a higher income neighborhood as an […]

From the experts on charter cities

After my post on charter cities, I received some interesting feedback from Michael Strong, CEO of MGK Group, the company investing in Honduras’ charter cities and Brandon Fuller, a Research Scholar at NYU’s Urbanization Project. The Urbanization Project is headed by Paul Romer who is no longer involved with the Honduras effort. Both stressed that their visions of charter cities do not rely on heavy-handed urban planning or much initial infrastructure. Brandon, speaking from his own perspective rather than on behalf of the Urbanization Project, said that he views the role of charter city investors as building arterial roads and providing some open space. The charter city government would not set any parking requirements or height limits, so the market would drive urban form at the block level. He writes: For planning, we favor a decidedly light touch approach. Our thoughts on planning are influenced by our colleague Solly Angel, an adjunct at NYU and one of our principal researchers at the Urbanization Project. Michael explained that the charter cities where MGK is investing will draw more from LEAP zones than from Romer’s charter city model. One important distinction is that MGK is purchasing land where these zones will be located whereas Romer suggests charter cities should be built on land donated by the host country. He writes: The Honduran government is not designating a specific location for us. The current proposal is for them to designate fairly large regions within which we can identify specific parcels and sub-regions that are most appropriate for getting started. While Brandon might support a larger role for city leadership in building a street grid than Michael does, both made clear that urban development should fall to entrepreneurs rather than charter cities’ initial investors or governments. Both envision that a change in the rules governing the sites of charter cities […]

Opportunity for States to Protect Land Use

If this season’s political campaign rhetoric has demonstrated anything, it’s that governors love to take credit for job creation. What I haven’t seen any governor mention, though, is that there is huge opportunity for economic growth in relaxing zoning codes. Most obviously, allowing new opportunities for infill development will create construction jobs. More significantly though, in the long run, cities allow for faster economic growth (and job growth) than other locations. The regulations that prevent cities from growing keep economic progress below what it otherwise would be. While researchers disagree over whether population density or total population is the variable that is most significantly correlated with economic growth, either way zoning plays an important role in holding back job growth, providing policymakers who are willing to deregulate with opportunities to improve their competitive standings next to other cities. Political incentives stand in the way of this growth opportunity, however. Most zoning restrictions benefit a city’s current residents at the expense of potential residents. For example, minimum lot size requirements serve to raise the price of homes, preventing low-income people from moving into neighborhoods that current residents wish to keep exclusive. By changing this current order, policymakers risk losing the support of their homeowning constituents, and interest likely to be better organized than renters and potential city residents. Limitations on housing supply raise the value of existing homes, artificially raising the value of residents’ assets, which homeowners strongly fight to protect. At the local level, policymakers are therefore incentivized to privilege homeowners’ interests at the expense of broad economic growth. At the state level however, the incentives may be different, such that economic growth may benefit state policymakers more than protecting home values. State policymakers have constituents who live in a wide variety of municipalities, some where land use restrictions are less binding in […]

Emily Hamilton
September 24, 2012
planning Policy

Urban Development in Charter Cities

In light of approval in Honduras for three new charter cities (REDs), much has been written recently on their potential to improve economic development. Economist Paul Romer makes a compelling case for the potential of charter cities, asserting that countries with institutions that impede economic growth can benefit by designating small areas with rules that permit free trade. Despite the promise of REDs, designating new areas for urban economic zones may pose some challenges that haven’t been addressed elsewhere. Cities almost always grow through spontaneous orders in locations that emerge through human migration. Cities are a product of human action, not of human design. Older cities grew through their accessibility to trade and natural resources. More recently, towns have become cities as they have become centers for specific industries. This process happens not with top-down planning, but rather as the market process leads individuals to move to specific places, resulting in the urbanization patterns that we see. In the case of Honduras’ REDs, however, the locations were selected by the state. Unlike the approved sites for REDs in Honduras, Hong Kong and Singapore (models of charter cities) were not greenfields before they became charter cities. Since becoming models of charter cities, both islands’ populations have exploded, but some level of development existed before British rule, and the British did not set out to create large cities. Rather than being planned, the success of these two islands was an accident, in which good institutions in fortunate locations have facilitated enormous economic growth. In contrast, all of the infrastructure and design for the REDs will be built from scratch, at first by one company, MKG, until other investors and individuals move to the city. In a sense, city construction may have to begin before there is demand for it. MKG has pledged $15 million […]

David Gunn on Amtrak’s $151bn NEC plan and how he rebuilt the Harrisburg line

First order of business: I wrote two articles for Bloomberg View (the opinion counterpart to Bloomberg News) on the high cost of US transit – one on private-sector gouging, and one on public-sector gouging. Secondly, I’ve been talking to former Amtrak president David Gunn a lot recently – at first for the labor piece I just linked to, but the conversation has veered into other topics. (If you have any burning questions you’d like answered, leave them in the comments.) The other day I got around to asking him what he thought about Amtrak’s $151 billion proposal for the Northeast Corridor and the $7 billion Union Station plan. His verdict? “It’s all a fuckin’ pipe dream.” His response was basically that big, flashy plans never work out, and that the only way to get things done at Amtrak is to do them under the radar. He used the rebuilding Amtrak’s Harrisburg line from Philadelphia to Harrisburg as an example. The Harrisburg line (the eastern half of Pennsylvania’s original Main Line) is the most important stretch of tracks that Amtrak actually owns after the Northeast Corridor, so I think there’s a lot to be learned Corridor itself. Here is my transcription of what he said about rebuilding the Harrisburg line. Most parts are verbatim, but there are a few sentences that I wrote from memory, and a few things that I probably missed. The Harrisburg line was a wreck. From Paoli on in [towards Philadelphia – i.e., SEPTA’s most important regional rail line], it was a bad 60 mph railroad, and from Paoli to Harrisburg it was a bad 70-80 mph railroad. The signals were ancient, the track was rough, trees were brushing up against the cars, weeds were growing on the ballast. I rode the line with a fellow who’s got a private car, and we […]

Stephen Smith
September 1, 2012
Uncategorized
9

Frank Lloyd Wright’s Centrally Planned City

On my last post about Ayn Rand’s views on cities, I received feedback in the comments that obviously she loved cities and on Twitter that obviously she did not. I think I come down on the side that she likely saw cities, and particularly skyscrapers, as embodiment of human achievement. However Frank Lloyd Wright — the likely inspiration for her character Howard Roark in The Fountainhead — strongly opposed population density both for his architectural preference and from a public policy angle. Wright called his urban development vision Broadacres because he thought that population density should be less than one person per acre. In part this may have stemmed from Wright’s practice of organic architecture. Many of the tenets of organic architecture, such as designing buildings with their users’ needs as the foremost priority, can be practiced as well in dense development as in houses like his most famous Fallingwater. However, Wright seemed to draw particular inspiration from designing buildings in greenfield locations, inspired by the natural landscape. This is all well and good for those who want to live far from cities. However, Wright went on to argue that density of people and buildings is not merely an issue of preference, but one of democracy. He argued that city life restricted individuals’ freedom of movement, and that skyscrapers limited individualism by increasing congestion and “keeping concentration where it is,” as if working or living in a skyscraper was like being in prison rather than a voluntary activity. Like many who have argued against building density because it increases congestion, Wright downplayed the necessary traffic congestion that occurs when land use restrictions require people to live far from their workplaces. Wright saw Broadacres as the anthithesis of Corbusian design, but both share a focus on green space and both would rely on heavy-handed planning, making them unlikely to […]

Ayn Rand on Urbanism

Ayn Rand’s recent appearances in the news made me think about her position on urban issues. Some of her novels suggest that she is anti-city, believing that individualism can only be achieved by living in remote areas. In Anthem, for example, her protagonist lives in a type of dorm where people are never allowed to be alone. He achieves the freedom that he couldn’t realize in this totalitarian society by escaping to an isolated home in the woods. Likewise, her description of Galt’s Gulch, the mountain utopia in Atlas Shrugged for productive capitalists, is based on Ouray, Colorado. Ouray is a beautiful town in a beautiful part of the country, but its built landscape notably shares little in common with the urban areas where her villains live. While her Galt’s Gulch description is clearly fanciful, I think it is important to note that the characters would not have been able to support themselves in a small market with the specialties they chose before dropping out of society. Galt himself is an electrical engineer, and other residents of the Gulch include a railroad manager, a metallurgist, and a famous actress. Since the Gulch does not engage in trade with the outside world, those living in the Gulch would not be trading in a market nearly large enough to be specializing in their chosen professions. In The Gated City, Ryan Avent provides an excellent description of the specialization that is only possible within large cities. Going back to the Ouray example, this small mountain town provides opportunities for a certain type of specialization, such as spa manager or ice climbing guide, but this is only because tourists visiting the area have the requisite standard of living to visit resort towns. Since the division of labor is limited by the size of the market, the division of labor within Galt’s […]

Selling the Rights to Greater Density

At Next American City, Mark Bergen has an interesting long-form piece on municipal infrastructure financing. He argues that the property owners who benefit from public policies, such as infrastructure investment, should be required to fund these policies. He suggests infrastructure improvements should be paid for with Tax Increment Finance or value capture (PDF). I don’t necessarily agree with his infrastructure funding prescriptions, and may take these up in a future post. What I found even more interesting, though, is his suggestion that developers should pay for zoning changes. The basis for this proposal comes from the Georgist land tax. Because in urban settings, land’s value largely comes from the amenities surrounding it, landowners do not have the exclusive rights to this value, according to Henry George. The suggestion that developers should pay for the rights to build on the land they own is based, Mark explains, on a policy from São Paulo, called Certificates of Additional Construction Potential (CEPAC). These bonds, representing rights to build, are transferable and are publicly traded. He quotes Gregory K. Ingram of Lincoln Institute of Land Policy: “They’re essentially selling zoning changes,” explained Ingram. Crucially, the building fees have not eaten away at developers’ profits. By some accounts, the rates of return for real estate in the districts increase. […] The notes, sold by municipalities, are one of the world’s most innovative public financing techniques. Across many sections of São Paulo, if a developer hopes to build or do nearly anything with her property — adjust its uses, expand outward or upward — she must first buy a CEPAC. On a fairness level, selling zoning changes seems wrong to me. Current zoning policies are an arbitrary starting point, so it doesn’t make sense that developers should have to pay for permission to change a policy that […]

Emily Hamilton
August 15, 2012
Zoning
9

The High Cost of Free Parking Preface and Afterword

This is the last post in the series on Donald Shoup’s The High Cost of Free Parking. Previous can be found here: Chapters 1 – 4 Chapters 5 – 9 Chapters 10 – 14 Chapters 16 – 18 Chapters 19 – 22 Preface In these two chapters, which Donald Shoup added for the paperback edition of the book, he discusses some of the changes in parking policy since the original edition in 2004. He also reiterates his three prescriptions for saner parking policy: 1) Set the right price for curb parking; 2) Return parking revenue to pay for local public services; 3) Remove parking minimum requirements. He points out that cities that have tried “performance parking” have had successful results. San Francisco’s SFpark is perhaps the country’s most advanced system for performance parking. Curb spaces include sensors that can tell whether or not the space is occupied. Then parking managers can adjust prices remotely to approach the 85% occupancy goal as closely as possible. Shoup argues that performance parking should not be a politicized change. Setting an 85% occupancy target is not designed to raise revenue or to benefit any group at the expense of another. Rather, prices can eliminate parking shortages, so that people pay for parking with money rather than with time spent cruising. These prices also incentivise greater turnover. Nonetheless, he points out that performance parking has opponents: Thinking about parking seems to take place in the reptilian cortex, the most primitive part of the brain responsible for making snap decisions about urgent fight-or-flight choices such as how to avoid being eaten. The same could be said about many land use decisions which do not seem to be made on the basis of rationality. He points out that performance pricing is very unlikely to reduce customers in […]

Anthony Ling on private buses

A guest post from Market Urbanism’s Brazil correspondent, Anthony Ling, who blogs in both Portuguese and English at renderingfreedom.blogspot.com… For a long time I’ve been thinking about why collective transportation is a synonym to public transportation. Is there anything special about the activity of taking people from one point to another that makes it valid to prevent competition, prohibit entrepreneurship and end with different types of services in a city according to passengers’ needs? Public transportation in Brazil is known to be inefficient, and it is the poor, the most dependent on this service, that ends up being harmed. How could a company enter the market or technologically innovate in collective transportation? Far beyond the basics that are missing in the Brazilian bus lines, such as a route identification system, both online and on the bus (in Porto Alegre you have to know what codes like T1 and T5 mean as a route), knowing which buses pass in each bus stop would already be a start and a great comparative advantage to a new company on the business. While we depend on the inefficiency of the public sector, the group from Porto Alegre Shoot the Shit has started a collaborative initiative to find out which bus passes at each stop, action that was initially seen by the EPTC as an act of vandalism. Another strategy would be the identification of which routes are overloaded with passengers, trying to profit with one more bus to be used by people that aren’t being served on the margin. Or do just the opposite: try to find out if there is demand to nonexistent routes through market research. Still, a much simpler way would be what many schools use for the transportation of their students, but in different types of establishments. A company could go to […]

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