Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Livechat invitation and more thinktank responses

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As promised, I want to reprint the responses I got from Wendell Cox and Randal O’Toole, but first I wanted to invite everyone to a livechat that’s being organized by Tim Lee. Tim used to write for Cato, but now he’s pursuing a PhD at MIT and doing freelance writing on tech policy. He organizes these livechats occasionally and has been kind enough to ask me to be his guest, so if you want to participate (or just watch), go to Tim’s website on Wednesday between 9:30 and 10:30 pm EST, and click on “General Chat” on the bar in the lower right-hand corner. The audience should be relatively small, so if you have something you want to ask or discuss or debate, there’s a good chance that we’ll get to it.

So anyway, Marc Scribner has posted his response to my response to his response to my response (sorry, couldn’t help myself) to Seattle’s recent land use liberalization.

Wendell Cox’s response was similar to Marc’s, so my disagreements are similar, but Randal O’Toole took a different approach, and one that I pretty much completely agree with:

I have no significant problem with liberalizing parking codes. My one caveat is that planners need to remember why those parking minima were there in the first place. In some cases, they were put in because some guru somewhere said that was the way to do it. But in other cases, there was a genuine concern about the need for off-street parking in order to prevent congestion around on-street parking.

In this case, I agree with Don Shoup that the remedy is for the city to charge market rates for on-street parking. Sometimes, of course, the market rate is zero. But other times parking should be metered to insure that everyone who really wants to park (as indicated by their willingness to pay) has parking.

In short, liberalizing parking codes should be combined with marketizing on-street (and any public off-street) parking. At the same time, cities should beware of using parking charges as a way to punitively oppress auto drivers, which would be tempting in places that have a strong anti-auto political lobby. But that would work itself out in the long run because places that are too anti-auto will lose businesses to nearby communities that are more auto friendly.

My only quibble would be with the punitive oppression part – unlike Shoup, I think that until we privatize on-street parking and sell off the land (with complete development rights) to the highest bidder, then the city’s should try to recoup as much of the opportunity cost of the space as possible by jacking rates until they actually start to take in less revenue (at which point I agree that the rates are oppressive). In other words, they should never set the price at zero unless not a single person would park there otherwise. But beyond that, I’m pleasantly surprised to find myself in complete agreement with Randal.

And so, with Wendell Cox’s response, I hereby conclude the first (and hopefully not last) market urbanist vs. market suburbanist blogospheric debate:

Thank you for the opportunity to comment. I generally favor liberalization of land use regulations. I am pleased that apparently they are not setting maximum parking regulations. The bigger problem in the Seattle area is the growth management policies that have established the urban growth boundary. This is where the liberalization really needs to happen. During the housing bubble, the Median Multiple (median house price divided by median gross household income) rose to about double what it had been at the beginning of the bubble, and double the historic norm. Increases of this magnitude occurred only in places like Seattle, where excessively restrictive land use regulations forced the price of land for residential development to unprecedented heights. Prices remain at least 1.5 times norm.

In the longer run, this bodes poorly for the Seattle area, where people will have less discretionary income as a result. This will be a particular problem if the economy fails to grow strongly and unemployment is not materially reduced. In this environment, the last thing government policy should do is raise the price of anything.

  • Dan

    9:30-10:30 PM Eastern?

  • Pingback: Livechat invitation and more thinktank responses | Celebrant()

  • Will you be discussing tech or Urbanism with Tim Lee?

    I’ll definitely join in – hopefully I can get my son to sleep by 9:30.

    (PS – I’m also an MIT Alum, so it’s great to hear that he’s there.)

  • Alon Levy

    Good to see Cox is repeating the “If you ignore Phoenix and Las Vegas’s bubbles, and the modest price increases in New York and Boston, then the bubble was totally the fault of smart growth” line. Sourced, kind of, sort of, to a person who’s not and never been an urban economist (Paul Krugman) and who blames the bubble on completely different causes (namely, financial deregulation). You’d expect that after predicting Seattle’s housing prices would crash for two years he’d learn, but nooooo…

  • “…until we privatize on-street parking and sell off the land (with completely development rights) to the highest bidder…”

    For real? Do you realize that in many cities (though certainly not all of them) the property line is in the middle of the street? The land under the road and sidewalk is already part of the adjoining property. The roads and sidewalks and utility lines are there via easement to provide access for those services to reach the property, and only in more recent suburban developments is the road actually a separate parcel. So the land can’t be sold off because it’s not the city’s to sell in the first place.

    Even if it could be done, what would be the benefit of doing so? I fully agree that the market for on-street versus off-street parking is corrupted and needs to be fixed. However, raising meter rates or instituting demand-based rates is a simple and effective solution to that. The roadway and sidewalks are public places there for the benefit of both the private property owner and for the public as a whole. To try and sell off a zone in between the public way and private property to another private entity is almost akin to a blockade. To have a public road, private parking, public sidewalks, and then private property makes very little sense spatially. Also, the privatization of parking meters in places like Chicago and Indianapolis has severely handicapped those cities’ ability to use that space for non-parking public goods like parades, block parties, construction staging, or even repurposing for things like pedestrian malls or outdoor cafe seating.

    Could a private operator/owner allow non-parking uses for that land? Probably, but then you have a situation where the property owner is paying a private company to use their own land in the public right-of-way. That makes no sense at all. Privatization can certainly help in some areas, but not all of them. We have public areas (commons if you will) for a reason, because individual ownership of these areas that are used by everyone for many different purposes would be inefficient and detrimental to the functioning of society as a whole. If you take the privatization situation to its absurd but logical conclusion, you could have toll gates on every residential side street, and a different set of parking regulations in front of each individual house. On a broader scale like the aforementioned parking meter leases, the money that used to go to the city coffers to invest back into the city’s infrastructure (which parking spaces are a part of) and services now goes to a private company. How is that a good thing?

  • Yep, sorry about that – my East Coast bias is creeping in…

  • Urbanism mostly, but we can probably talk about whatever we want…

  • “But that would work itself out in the long run because places that are too anti-auto will lose businesses to nearby communities that are more auto friendly.”

    In a nominally suburban setting that would make sense, but not if the number of local pedestrians with better access surpasses the number of commuters outside a wider radius of travel distances. No one is driving onto Manhattan to visit the Urban Outfitters on the corner of 14th and 6th. Density paired with mobility make the car-traveling patrons a minority and rightfully so. In the long run, I have to believe the pedestrians of urban centers are more of a lifeline to street-side businesses than drivers.

  • Al

    I also found that statement odd. I could see renting the area to the highest bidder, for purposes such as patios for restaurants and such, and I could see requiring the owner of a garage to pay some rent to reserve the area for their access (otherwise anyone who builds a curb-cut automatically gets exclusive rights to a street parking space, which doesn’t make sense). But I don’t see how you’d go about actually selling these plots.

  • I agree that true privatization of the spaces is a logistical nightmare in
    the current paradigm. Stephen isn’t necessary addressing the logistics of
    parking privatization, but offering a methodology for testing the necessity of
    on-street parking. He is pointing out that if the space is deemed to be for
    parking by some authority, the marketplace will never have the opportunity
    to determine what the true highest-and-best use of that land is.

    True privatization, how ever much of a radical paradigm shift it would be,
    would allow us to see if street parking is even a practical use of the land
    that abuts thoroughfares, or if a certain thoroughfare is necessary in
    the first place…

  • anonymouse

    I think the Urban Growth Boundary is really an attempt to correct the various market failures from massive subsidies that encourage sprawl, though it’s not always an accurate or effective way of dealing with the problem. Which is part of what makes the libertarian position appealing: libertarians want to drive regulation down to zero, rather than trying to fix the problems caused by one regulation by implementing another two, which leads to an infinite thicket of regulation and bureaucracy.

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