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.

Some Belated Thoughts on The Gated City

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Several bloggers have already provided reviews of The Gated City by Ryan Avent, including Aaron Renn at The Urbanophile, Rob Pitingol at Greater Greater Washington,  and Lloyd Alter at Tree Hugger. I’ve finally had a chance to read it and would thoroughly recommend it.

I often support increased density on the grounds that this is what the market wants. To me, that’s still reason enough to support the repeal of many land use regulations, but Avent offers a vision of density that is perhaps more compelling to more people. Because the division of labor is limited by the size of the market, cities offer many amenities that are not supported in less dense places. The diversity of food, art, shopping, sports, and movies is all much greater in cities than in small towns because larger markets allow for more specialization. Of course taste is subjective; many people prefer the quiet of the suburbs to the chaos of the city. However we can see that currently, many people want to move to cities but are unable to by looking at vacancy and rental rates.

Avent also points out that cities provide a sort of employment “insurance.” He uses the example of a Vietnamese chef losing his job. If the restaurant where he worked is in a large metropolitan area, he will be able to find another job in a Vietnamese restaurant. On the other hand, if he lives in a small town, he will likely have to seek employment in a more generic restaurant where he won’t  be able to charge a premium for his specialized skills. This is true for jobs in many industries. If I were to lose my job in economics research, I’d much rather be searching for a new job here in DC than in a state with one think tank, for example.

Avent goes on to discuss the empirical evidence that people are more productive in cities, citing many and varied studies that demonstrate this fact along with the theoretical reasons that cities act as “economic processors.” By artificially restricting the potential supply of housing and office space, land use regulations prevent people from moving to cities, thereby limiting their earning potential. More clearly than any other work I’ve read, The Gated City brings together the research demonstrating that people are more innovative and productive in dense population centers with the harmful impact of zoning laws. Avent acknowledges that density has decreasing returns; at some level of density average worker productivity will begin falling. There is no reason that the market wouldn’t recognize this though, and shift to building out rather than up in a world of free land use.

It’s easy and tempting to blame the inefficient land use regime under which we live on urban planners, but Avent points out that often planners want to do the right thing. Using the example of the Brookland neighborhood in Washington, DC, he discusses a case in which the city planning commission wanted to allow for taller buildings and infill development around the Metro station to facilitate transit oriented development. The neighborhood vehemently opposed the change, though, and successfully lobbied to prevent the upzoning. In this case, Avent explains that NIMBYs were able to work together even when they had completely opposite complaints. Some said the new development would allow low-income residents to move into the neighborhood, while others feared that allowing fancy new condos would drive up housing costs and make the neighborhood unaffordable. These NIMBYs with opposing viewpoints managed to overcome their differences and worked together to block the change in any case.

As much as I appreciated Avent’s perspective in The Gated City, the book left me feeling pessimistic. Avent provides several policy recommendations that would make it easier for increased development where it is most needed, but none of them seem politically viable to me. He suggests giving neighborhoods property rights to their land and the land surrounding them so that developers could purchase it to build new projects where they will be valuable. He also suggests taxing density and using the revenue to compensate neighbors or creating a zoning budget so that urban planners faced a hard limit on how much density they could restrict. It just seems that if any of these were possible in the current political landscape, the market pressure for increased density would have led them to be adopted already.

He didn’t quite get to this in the book, but on Econtalk two weeks ago, Avent suggested that perhaps the best way to improve land use policy would be for people to become more tolerant of what other people do on their own land. I would concur and add that a live and let live tolerance could improve all sorts of American policies on issues from gay marriage to drug laws. Unfortunately, I don’t know what tools are available to speed up the societal progression toward tolerance.

  • I don’t know that Avent described the NIMBY’s as being able to see past their differences to unite on a cause, but rather that they never had to address the substance of their opposition, since their desired outcome (a ‘no’) was the same. 

    It’s one of those things where it’s always easier to destroy than to create, to oppose than to craft, etc. 

    There’s also the matter of organization.  The interests in favor of development in those cases are strong and compelling, but they are also diffuse and disorganized relative to the channels that neighborhood groups have at their disposal. 

  • Emily Washington

    Good point. That was sort of supposed to be a sarcastic comment on the power of NIMBYism to bring people together.

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  • Benjamin Hemric

    Haven’t read, “The Gated City” yet (and may not get a chance to do so for a while), so these are very tenative remarks.

    – – – – – – – – – – – – –
     
    Emily wrote:
     
    Avent acknowledges that [1] density has decreasing returns; at some level of density average worker productivity will begin falling. [2] There is no reason that the market wouldn’t recognize this though, and shift to building out rather than up in a world of free land use.
     
    Benjamin writes:

    If I’m understanding Ryan Avent and you correctly, good points and well put! 

    I’ve been trying to argue something similar when arguing AGAINST calls to “foster” more high-rise developments in areas that are already high-rise (and high-density) — especially when it is being done in order to misguidedly, in my opinion, “protect and preserve” the low-rise character (and, supposedly, the current socio-economic characteristics) of existing low-rise areas.   In my arguement, however, “building out” ALSO often means building up too.  My arguments are also arguments AGAINST efforts to “plan” for “single core” cities, rather than allow for the development of marketplace fueled multi-core ones. 

    My ideas here are inspired by the writings of Jane Jacobs (who might, or might not, have agreed with my interpretations of her works).  I’m thinking especially of not only “Death and Life of Great American Cities,” of course, but also of one of her later books, “The Nature of Economies,” too.  (Ryan Avent’s ideas with regard to the benefits of high densities also appear to me to be heavily indebted, at least indirectly, to Jacobs.)

    By the way, it seems to me that, to a degree, Jacob’s later book contradicts, at least a bit, her earlier book.  In the earlier book she seems to feel that absent gov’t intervention, successful districts are apt to self-destruct via the self-destruction of diversity.  In the later book, she seems to say that self-destruction of diversity in nature and economies is apt to only go just so far, and then diversification again become the order of the day.  In cities, so it seems to me, this happens when the marketplace readjusts itself (absent misguided government intervention) and again diversifies an area. 

    In her earlier book, Jacobs argues that particular businesses are likely to crowd into a successful area, thereby killing off the diversity that brought them there in the first place.  Examples of this are banks moving onto all four corners of an intersection, thereby deadening the intersection and making it less prime for a bank;  or office towers in the Wall St. area crowding out other uses, and thereby making the area less attractive to office towers.  While there may be some truth to this (although overlooked gov’t policies may also be partly responsible for this supposed “market” failure), it seems to me that in her later book Jacobs also recognizes that, should this happen in the first place, the marketplace will (absent misguided governement intervention) eventually self-correct and re-diversify (as happens in nature and economies).

    – – – – – – – – – – – – –

    Emily wrote:

    As much as I appreciated Avent’s perspective in The Gated City, the book left me feeling pessimistic.

    Benjamin writes:

    Although I haven’t read the book, I’m pessimistic too!  But, then again, this is really only the beginning of the fight (so it seems to me).

    – – – – – – – – – – – – –

    Emily wrote:

    Avent provides several policy recommendations that would make it easier for increased development where it is most needed, [1] but none of them seem politically viable to me.[2] He suggests giving neighborhoods property rights to their land and the land surrounding them so that developers could purchase it to build new projects where they will be valuable. [3] He also suggests taxing density and using the revenue to compensate neighbors or creating a zoning budget so that urban planners faced a hard limit on how much density they could restrict. [4] It just seems that if any of these were possible in the current political landscape, the market pressure for increased density would have led them to be adopted already.

    Benjamin writes:

    Since I haven’t read the book, I may be misunderstanding the recommendations and their prospects.  But, at least from this brief summary, they seem like terrible suggestions.  He seems to be suggesting that we give people “rights” that they don’t have and don’t deserve — and, furthermore, he seems to be throwing in the towel when the game has just begun!

    – – – – – – – – – – – –

    Emily writes:

    He didn’t quite get to this in the book, but on Econtalk two weeks ago, Avent suggested that perhaps the best way to improve land use policy would be for people to become more tolerant of what other people do on their own land. I would concur and add that a live and let live tolerance could improve all sorts of American policies on issues from gay marriage to drug laws. Unfortunately, I don’t know what tools are available to speed up the societal progression toward tolerance.

    Benjamin writes:

    If I understand Ryan and you correctly, this approach seems more like it — although I would phrase it a little differently.

    The problem, as I see it, is that underlying rationale for “land use policy” has morphed from essentially legitimate serious concerns to essentially illegitimate frivolous ones. The original rationale for “land use policy” was legitimate (protecting the health and well-being of citizens), so it seems to me, even when specific policies may have been misinformed and misguided (when, for instance, the regulations didn’t, in fact, protect health or property values).

    These days, however, people seem to be mistaking their own personal, largely aesthetic, preferences for what works or doesn’t work for cities or our society at large: “I like ‘x’ kind of districts and, therefore, ‘x’ kind of districts work best for our society.”  They seem to forget that the kind of districts that they don’t like (e.g., mixed use [including industrial uses], high density [with many high-rises], low open space districts]) also “work” just as well (for other people) or even better (for society at large).  So land use policy has degenerated from serious protections (e.g., a chemical plant across the street from a school) into a combination culture war (where it’s the taste and preferences of one group against that of others), or a family feud (where each group seeks to get more money and approval out of daddy [Federal gov’t] or mommy [State gov’t] than their sibling group).

    So, I think people have to be “educated” that they are substituting their personal likes and dislikes for legitimate land use concerns (protecting people’s health and property values) and be shown how this is both unecessary and, for a variety of reasons, detrimental to our society.  In other words, Ryan’s book  — execept for the part where he seems to be giving away the store! — seems like a great early step in the right direction. 

    Benjamin Hemric
    Sat., 11/19/11, 7:40 p.m.

  • Emily Washington

    Benjamin, thanks for the response. It sounds like we are in complete agreement on the similarities between the equilibrating forces in both cities and markets. I interpret Jacobs in the same way, although I can’t be sure this is correct. I have read Death and Life more carefully than any of her other work, but I agree that in her later work she seems come to the conclusion that neighborhoods, absent interference, are almost self-regulating. I like to think that this change in her perspective came as she developed her understanding of cities as an emergent order, like the economy, but again it’s hard to know if this is right.

    There is one area, though where I might disagree. Benjamin writes:

    The problem, as I see it, is that underlying rationale for “land use policy” has morphed from essentially legitimate serious concerns to essentially illegitimate frivolous ones. The original rationale for “land use policy” was legitimate (protecting the health and well-being of citizens), so it seems to me, even when specific policies may have been misinformed and misguided (when, for instance, the regulations didn’t, in fact, protect health or property values).

    Emily writes:

    I’m not sure that there are any legitimate reason for government-enforced land use policy. The classic example is preventing a polluting industrial use from going in next to residential development. Sure, at face value this seems undesirable. But thinking about the alternatives maybe that’s not so true. In the developed world, I think it has been some time since polluting industries would find it profitable to build next to houses because they like to build factories that require a lot of land on the outskirts of cities where land is cheap. In the days where industrial uses would be found next to housing, and in the developing world today, I think it’s worthwhile to think about the tradeoffs involved in preventing this use. 

    In sprawling cities of today in the developing world and of the early 1900s here, when this type of land use policy came about, low-income workers who worked in these polluting industries faced a set of choices that are unpleasant to think about today. Being able to work in these factories, in poor conditions and among pollutants, was what allowed them to earn money and provide better opportunities for their children. By preventing people to live near polluting industries, we could be preventing them from earning a living, or forcing them into a long, expensive, and potentially dangerous commute.

    As I don’t see the abolishment of land use regulation as a conceivable reform in the near future, I think we are in agreement on all viable reforms.

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