I just finished reading Richard Florida’s new book, The New Urban Crisis. Florida writes that part of this “crisis” is the exploding cost of housing in some prosperous cities. Does that make him a market urbanist? Yes, and no.
On the one hand, Florida criticizes existing zoning laws and the NIMBYs who support them. He suggests that these policies not only raise housing prices, but by doing so harm the economy as a whole. For example, he writes that if “everyone who wanted to work in San Francisco could afford to live there, the city would see a 500 percent increase in jobs… On a national basis, [similar results] would add up to an annual wage increase of $8775 for the average worker, adding 13.5 percent to America’s GNP – a total gain of nearly $2 trillion” (p 27).
On the other hand, Florida is not ready to endorse the idea that “we can make our cities more affordable… simply by getting rid of existing land use restrictions” because “the high cost of land in superstar neighborhoods makes it very hard if not impossible, for the private market to create affordable housing in their vicinity. Combine the high costs of land with the high costs of high-rise construction and the result is more high-end luxury housing.” (p. 28). I don’t find his point persuasive, for a variety of reasons. First, as I have written elsewhere, land prices are often quite volatile. Second, the overwhelming majority of any region’s housing is not particularly new; even in high-growth Houston, only 2 percent of housing units were built after 2010. Thus, new market-rate housing is likely to affect rents by affecting the price of older housing, rather than by bringing new cheap units into the market.
Florida also writes that “too much density can actually deaden neighborhoods” because “The world’s most innovative and creative places are not the high-rise canyons of Asian cities but the walkable, mixed-use neighborhoods in San Francisco, New York and London.” (p. 28) Does this mean that places with high-rises cannot be walkable and mixed-use? Or that New York has no “high-rise canyons.”? Since Florida does not explain this point, I am not quite sure what he is thinking.
Similarly, at the end of his book he writes that “it’s time to reform the overly restrictive zoning and building codes that limit density” (p. 191) but that “extreme residential density and huge towers… [are] deadened condo canyons.” (p. 193). So I think is position is: new housing good, but tall buildings bad.