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.

Hump day list

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Because for the first time since May, I have a hump day. Which is why all you get is a list.

1. Traditionally, the NYC-dominated New York State Assembly’s whacky rent control impulses have been tempered by the suburban/upstate-dominated Senate, but the NYT says that they may have struck a deal, with the Assembly winning the following:

About one million apartments in the city’s five boroughs, roughly half of all rental units, are covered by the existing laws, which sharply limit landlords’ ability to raise rents and keep many apartments, particularly in Manhattan, renting at well below market value. Currently, apartments become deregulated when the rent reaches $2,000 and total household income of the tenants is at least $175,000 annually for two years.

[Assembly speaker Sheldon] Silver said he would like not only to preserve those protections, but also to expand them, by raising the income and rent thresholds.

“You want to preserve people making $210,000, $225,000 a year, living where they’re living,” Mr. Silver said.

Uh, maybe you want to preserve that…

2. A good article from the NYT about Brooklyn’s new skyline. I’m impressed that they held off until the last page to quote a naysaying politician:

Robert Perris, the district manager of Community Board 2, which represents the area, said the benefits of residences along Flatbush Avenue were clear. But, he added, so are the benefits of a strong commercial district — and strengthening the commercial district was one of the chief goals of the rezoning. When residential buildings are erected in commercial zones, he said, their lots are lost for commercial purposes.

It also would have been nice to have a sentence or two more more detail in this fairly long article about the 2004 “rezoning,” though.

3. This study found that parking adds 10% to the average car’s emissions (something which can’t be dealt with by electric cars). This doesn’t really sound that significant to me, but it reminds me of this working paper that a reader sent in but I forgot to blog (if someone reads over it, maybe they could summarize it in the comments?). It’s been a while since I read it, but I remember being surprised at how much of sprawl’s emissions are due not to the direct effect of cars, but rather the indirect effect of heating and cooling bigger houses that leak energy from all five exposed sides.

4. The Twin Cities move to reign in highway spending and institute congestion pricing on existing highways. But being Minnesota, it’s all relative – they’re still adding highway lane miles. The dumbest quote in the Streetsblog article goes to Myron Orfield, director of the “Institute on Race and Poverty” (where else?) at the U of M:

Though the traditionally progressive Twin Cities benefit from having very strong land use statutes, they haven’t been aggressive enough in enforcing those standards, he said.

  • Stephen, one argument I’ve heard for rent control/stabilization is that it helps preserve income diversity at the neighborhood level – rich, middle class and poor seeing each other on the street, shopping at the same corner store and riding the same train. Similar with siting housing projects in upper-class neighborhoods. Obviously, it doesn’t always work out as intended. But do you know of a market-based strategy that can foster that kind of diversity?

  • FYI, Rob Perris is more like a bureaucrat than a politician — he’s the office staff person for a fairly toothless politician-appointed community board that only indirectly represents anyone. And I’m not sure that his statement is naysaying about upzoning generally. Rather, there’s a persistent rumor that upzoned commercial development — that is, office space, not the obligatory ground-floor retail — has been thwarted as the result of backroom deals with the Powers That Be in that borough across the East River from us. Apparently they don’t want competition from cheap, transit friendly Brooklyn office space. To the extent Rob is saying anything, he’s obliquely referring to this perception. Chan’s defensiveness in response — “urging patience” — makes it clear he understands what is really being said.

  • Well first of all, specific to this case, I’m not sure that there’s really much value in having people who earn $200,000+ living into ultra-rich neighborhoods, period, which seems to be specifically what Sheldon’s talking about here.

    But more generally, upzoning writ large I think lessens the cost of housing and makes that sort of interaction more likely, but I guess we have to ask ourselves, what are we really looking for here? I think that most people are really more concerned about racial segregation than income segregation (I know I am), but the plight of black people in America (I’m not too concerned about Latinos…they’ll assimilate soon enough) is really a much bigger issue that I don’t think land use can solve.

    But if you truly are concerned about income-based segregation, I’d still say that’s not land use’s problem – that’s essentially the fault of income inequality. Some libertarians would claim that income inequality is natural and healthy, but I’m not one of them – but that’s really a topic for another blog.

  • Very interesting! I might actually put up a post about this soon and ask commenters if they know anything more about it, because that sure would be a great story.

  • There’s more to the story of the destruction of the South Bronx than rent control, but you cant quite say “income diversity” of any sort was achieved there – it was obliterated.

    I argued in my series on rent control there are aspects of rent control that work to encourage segregation:

    As mentioned in the section on discrimination, landlords may choose unsavory methods to choose their tenants, since price cannot be a factor. Often, landlords will discriminate against persons of certain ethnicities or religions. This type of discrimination can often be widespread through an area causing tensions between religious or ethnic groups, and in the long-run drive out certain types of people from those areas.

    The shortage of affordable housing, and development of only luxury housing creates a huge gap in the income of a city’s residents. Over time, luxury developments will be confined to certain areas less blighted by rent control, causing segregation and rapid gentrification.

    If you think some type of socio-economic diversity is a virtue and should be paid for through taxation, I recommend considering advocating housing vouchers as an alternative to trapping people into long-term housing situations, burdening the providers of housing with the costs, and all of the other tragic side-effects of rent control. So, if recipients of the vouchers genuinely want to live in a diverse place, they can use their vouchers to do so.

    I also think that in a less regulated market, you’ll end up with lower housing prices in general, and a more diverse quality of housing stock within a particular neighborhood, because development would not be as constrained and not so focused on the hot new area that just got rezoned. Those with less money will live in an older buildings, but the building across the street might be a brand new luxury condo.

  • You know, I think that racism is often just a disguise for class warfare. Not always, but often. I’m at least as concerned about income segregation as about racial segregation. And by the way, you do know that there are some Latinos whose appearance is so African that they can’t assimilate with white or Asian people?

    Hm. Now I’m trying to remember where I read this, but it was years ago. The basic idea is that in olden days towns were small, the upper classes lived right near the peasants and proles, and they knew each other. This prevented them from engaging in the kind of egregious stereotyping that you get when you really don’t know people. Now that you have segregation, you get much more serious stereotyping and discrimination. This can be avoided by maintaining local income diversity.

    Thinking about this now, I realize that the premise doesn’t really hold up. There were all kinds of ways to be segregated, and there was stereotyping and discrimination. Maybe I’m misremembering the argument.

  • Not all politicians are elected officials. While district managers are not elected officials, they often do engage in politics. Many use their positions for political influence, and often they see it as a stepping stone to running for an elective office.

  • Yeah, I’m not sure I buy that argument. In college I had a professor who said that Jews have only come close to fully integrating among Europeans three times – Moorish Spain, Weimar Germany, and modern-day America. But despite that deep integration into Spanish and German society, that didn’t prevent the expulsion of the Jews in 1492 and the Inquisition in Spain, or the Holocaust in Germany. I guess just a reminder that no matter how well integrated we think we are, bloody race/ethnic/clan wars aren’t impossible. Maybe we truly have turned the corner in history, though…

  • The Orfield quote is dumb, why?

    Are you familiar with any of Orfield’s work?

  • It’s dumb because, at least in my opinion, the reason that “smart growth” doesn’t work in Minneapolis is because “statues” against density are enforced. The “of course” was in reference to his institute’s extremely left wing-sounding name, and my general opinion that liberals don’t understand that the issue of sprawl is one of too much land regulation, not too little.

  • Al

    I don’t see how giving everyone vouchers is better at all. Wouldn’t you just drive up the cost of housing by the amount of the vouchers? Would the vouchers be for specified monetary amounts, and would landlords be allowed to charge the voucher + extra?

  • Al

    Jews have been fairly well-integrated in Denmark, since the 19th century.

  • Al

    This is how I’ve heard it:

    In the early US (and before) there were regions with very large numbers of slaves– 40% or more. There were also great numbers of non-landowning, poor white people, many of whom were indentured servants and sharecroppers with little hope of advancement. And then there were a small number of wealthy landowners.

    The poor whites and blacks worked together in similar conditions, and socialized. The elite were seriously worried about uprisings, French-revolution style, and were especially worried about blacks and whites making common cause. In order to preserve their station, they gave some smaller concessions to the poor whites, while harshly punishing interaction between blacks and whites, and of course having highly discriminatory laws in general, the idea being to give the whites a stake in the society, and to sow distrust between the two groups. The results were wildly successful, and the rest is history.

    Racism is a disguise for class warfare because the largest class has always been the lowest class, and if it gets unified it will likely prevail. Racism keeps it split down the middle, making sure that measures that would benefit the poor get voted down– by the poor, because they might help the other poor.

  • Alon Levy

    About a year ago, when I lived on the Upper East Side, I got a newsletter from the Assemblyman saying he’s fighting for transparency, good government, and raising the limits of luxury decontrol to $240,000 – a couple of times the median for the eastern end of the UES. A few weeks later, I talked to someone on the bus who made much less than the luxury decontrol threshold, but got decontrolled anyway because she didn’t get the paperwork proving it in time.

    At least it wasn’t as bad as the literature I got from the State Senator, who took pride in her activities for fighting poverty in the East 50s.

    Both of these episodes – as well as Silver’s proposal to extend luxury decontrol further deep into upper middle-class territory – remind me of Krugman’s post on the rich feeling poorer. People who make $200,000 in Manhattan feel almost poor, compared to the types who can afford Trump Tower, so they think the government should subsidize them, and to hell with people who make $15,000.

  • The Downtown Brooklyn Partnership (http://www.dbpartnership.org/about/staff) is an interesting creature indeed.

    Here’s my $0.02 generally about development in this area.

    1. NYC is both actively and structurally hostile to new development of any sort, and on this basis alone, there is sub-optimal investment in organic redevelopment.

    2. Rather than address these problems, the city selectively removes the barriers to “desired” projects. This makes them look like the good guys, enables them to reward supporters and also to accomplish various aims (e.g. low income housing) off budget. It also virtually closes down any sort of market-driven approach to land use decisions, and instead substitutes an insider consensus.

    3. This pattern has become entrenched to an extent that further retards organic development, because if you try something outside of this context, you’re likely to get steamrollered when the plan finally comes together.

    DBP is a product of this situation. It has worked reasonably well because Joe Chan is a very smart guy and they have worked hard to achieve a relatively broad insider consensus. But the overall situation is is so far from optimal it’s not even funny. It also helps that the situation with Atlantic Yards — just down the street, and also a direct result of points #1-3 — is so egregiously awful that it makes everything else nearby look better by comparison.

  • Are you familiar with the land use regulations in the Twin Cities that Orfield speaks of? I suggest you read his book Metropolitics to understand the argument he’s making. Basically, the Twin Cities area has some of the best available tools to actually coordinate land use plans amongst various metropolitan jurisdictions. They have regional commercial tax base sharing, attempting to avoid the race to the bottom of one jurisdiction competing against another and the whole idea is to have the regional land use and taxation policies be coherent, an acknowledgment that the metropolitan economy is regional rather than just within the boundaries of each individual jurisdiction within a very fragmented area.

    His argument is that the regional body that has these tools available does not use them because it’s a body appointed by the governor of the state, rather than one that’s popularly elected.

    I’d suggest you read his book, it’s an excellent view into how the fragmentation of urban and metropolitan governance hurts the overall regional outcomes.

    http://www.brookings.edu/press/Books/2002/american_metropolitics.aspx

    Likewise, I find your framing of the issue (too much regulation vs too little) to be unsatisfactory – there are regulations and there are regulations. Making the judgment you do without any understanding of the content of those regulations is misguided. When Orfield speaks of aggressive use of land use tools, he’s speaking of the kind of outcomes that result in upzoning inner areas, focusing development around transit, increasing density.

    This is part of the problem with the libertarian de-regulation ideal. It’s completely unrealistic, and a partial de-regulation of some kinds of land use regulations that doesn’t also address the other issues that shape urban environments can actually be counterproductive and produce worse outcomes, increasing sprawl, etc. That’s what Orfield’s talking about (not that it comes across in a throwaway sound bite).

  • Are you familiar with the land use regulations in the Twin Cities that Orfield speaks of? I suggest you read his book Metropolitics to understand the argument he’s making. Basically, the Twin Cities area has some of the best available tools to actually coordinate land use plans amongst various metropolitan jurisdictions. They have regional commercial tax base sharing, attempting to avoid the race to the bottom of one jurisdiction competing against another and the whole idea is to have the regional land use and taxation policies be coherent, an acknowledgment that the metropolitan economy is regional rather than just within the boundaries of each individual jurisdiction within a very fragmented area.

    His argument is that the regional body that has these tools available does not use them because it’s a body appointed by the governor of the state, rather than one that’s popularly elected.

    I’d suggest you read his book, it’s an excellent view into how the fragmentation of urban and metropolitan governance hurts the overall regional outcomes.

    http://www.brookings.edu/press/Books/2002/american_metropolitics.aspx

    Likewise, I find your framing of the issue (too much regulation vs too little) to be unsatisfactory – there are regulations and there are regulations. Making the judgment you do without any understanding of the content of those regulations is misguided. When Orfield speaks of aggressive use of land use tools, he’s speaking of the kind of outcomes that result in upzoning inner areas, focusing development around transit, increasing density.

    This is part of the problem with the libertarian de-regulation ideal. It’s completely unrealistic, and a partial de-regulation of some kinds of land use regulations that doesn’t also address the other issues that shape urban environments can actually be counterproductive and produce worse outcomes, increasing sprawl, etc. That’s what Orfield’s talking about (not that it comes across in a throwaway sound bite).

  • Benjamin Hemric

    Since I may not have time for an extended discussion, I’d like to make some quick (!) “placesaver” comments. (By “placesaver” comment I mean a comment not meant to “prove” a point, but rather to place an issue “on the table” for future discussion.):

    1) One previous commenter wrote:

    But do you know of a market-based strategy that can foster that kind of diveristy [i.e., income diversity at the neighborhood level]?

    Benjamin Hemric writes:

    I think this is an important question.

    Here’s my tentative quick answer:

    It seems to me that “in the ‘old’ days” (before “planning became the rage” in post WWII America), cities (like NYC) were MORE socio-economically integrated (and more mixed-use too) than they are now. “Planners” really didn’t like this (along with a lot of other things) and used various tools to create the cities of their “dreams.” Rather than accept the “organic” socio-economic integration (and mixed land uses too) that already existed (which is more than what we have now), they began to self-consciously “plan” for socio-economic integration (and then, years later, for supposedly mixed land uses too) as part of their “dream” cities — and actually made things worse. It seems to me that zoning itself, for example, tends to foster socio-economic segregation (as well as the separating out of land uses) by creating islands of sameness.

    As a result, it seems to me that “planners” are now trying to undo the very problems they’ve created in the first place — but are blaming the problems on the marketplace instead!

    So, in a sense, maybe rent control is now necessary to preserve socio-economic integration (in a “planned” city), but if this is true it’s because “planners” created the problem in the first place. The problem facing market urbanists, then, is how to humanely undo the damage that’s been created by various misguided regulations.

    In terms of housing, it seems to me that this means creating, as Jane Jacobs seems to me to be suggesting in her chapter on “gentrification” in “Death and Life of Great American Cities” (although she calls the phenomenon the self-destruction of diversity), MORE gentrifiable neighborhoods, to take the pressure off those few gentrificable neighborhoods that currently exist and are being overwhelmed by demand.

    (It seems similar to the situation with taxicabs where it appears to me the “regulators” are trying to solve the problems created by their over-regulation and blaming the problems on the market place instead.)

    2) Regarding the article, “Suddenly, a Brooklyn Skyline,” by Michelle V. Agins, which was in “The New York Times”:

    What struck me when I first read the article a few days ago (and I was hoping that someone whould bring it up here) was that in some ways it seems to me to be a reflect the triumph of the “planning mentality” and “planning rhetoric.” I say this because the people in the article (and the reporter) all seem to me to be talking as though they believe that cities and city districts are incapable of organic change and growth by themselves, and that in order for cities and city districts to grow and change they supposedly NEED the intervention of politicians, bureaucrats or community groups first.

    Here are some examples:

    * With so many new residents in place, planners and officials hope a more well-rounded neighborhood will soon coalesce. The goal of the 2004 rezoning that made much of the new construction possible was to create a mixed-use environment with thriving office and retail components in addition to residences, said Joe Chan, the president of the Downtown Brooklyn Partnership, a not-for-profit development corporation.

    * The area, Mr. Chan said, has not had as much commercial development as he would have liked. But, he added, “having thousands of talented, highly educated people living in Downtown Brooklyn makes a compelling case for more companies to move to the area.”

    * Mr. Chan says his neighborhood wish list also includes a home furnishings store, an Apple computer store and more mundane neighborhood retail services, like coffee shops, groceries and pharmacies. There is good news, at least, for residents craving a supermarket: A deal to bring a grocery store to the ground floor of Toren has been resurrected after falling through in the spring. Don Capoccia, a principal of BFC Partners, that building’s developer, said the store was now set to open late next summer.

    * So much residential growth is occurring, in fact, that some people in the neighborhood worry it may be too much. Robert Perris, the district manager of Community Board 2, which represents the area, said the benefits of residences along Flatbush Avenue were clear. But, he added, so are the benefits of a strong commercial district — and strengthening the commercial district was one of the chief goals of the rezoning. When residential buildings are erected in commercial zones, he said, their lots are lost for commercial purposes.

    * “There are only so many development sites,” Mr. Perris said. “If these sites get developed for residential, they’re gone forever.”

    * Mr. Chan urged patience about the arrival of nonresidential development.

    “Has everything been realized in the six years since the rezoning?” he asked. “No, but that was never the plan.” He said what was most important was that “over the last year, we have seen Downtown Brooklyn hit critical mass as a residential community.”

    Benjamin Hemric
    Thursday, January 13, 2011, 9:45 p.m.

    P.S. — Hope people will not mind if any future posts of mine in this thread, if there are any, are done as independent comments (i.e., outside the nesting feature).

  • Benjamin Hemric

    P.P.S. — While there may be many “typos” and “cut and paste” errors in my above post, I’d like to correct one particularly egregious one. What follows should have been the sequence of the following two sentences/paragraphs:

    As a result, it seems to me that “planners” are now trying to undo the very problems they’ve created in the first place — but are blaming the problems on the marketplace instead!

    (It seems similar to the situation with taxicabs where it appears to me the “regulators” are trying to solve the problems created by their over-regulation and blaming the problems on the market place instead.)

    Benjamin Hemric
    Thursday, January 13, 2011, 11:30 p.m.

  • Sorry, I didn’t RTFA until now. Seriously, Joe Chan?

  • Congratulations, this is comment number 2,000 on this blog!

  • Benjamin Hemric

    Funny (and apropos?) that of all my comments, a P.P.S. should be highlighted as the 2,000th comment on this blog! Oh, well!

    Nevertheless, it does provides a good opportunity for me to thank you and Adam for providing such a hospitable blog and such great blog posts to comment upon — and it also provides a good opportunity to tip my hat (so to speak) to my fellow commentors who so often post such interesting and informative comments. So many of them — even the ones that I’m, at least at first, inclined to disagree with — are unusually interesting and informative. Both the original posts and the comments they attract set a very high standard to live up to.

    Benjamin Hemric
    Sun., January 16, 2011, 9:47 p.m.

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