In The Rent Is Too Damn High!, Matthew Yglesias makes a case against regulating population density in metropolitan areas. He argues convincingly that building higher in our cities will lower rents, raise disposable income, improve productivity, and provide considerable environmental benefits.
Where he loses me is in this sentence:
Balancing the different costs and benefits involved in denser building is, after all, precisely the sort of thing relatively free markets are good at.
This is unfortunately not true. If 70% of people prefer smooth peanut butter, and 30% percent of people prefer chunky peanut butter, the market will excel at providing 70% smooth, and 30% chunky. It will do that close to perfectly. Providing housing in an urban area is a different case.
If you move into a neighborhood with boarded up houses a new neighbor offers a positive externality to you. His spending will allow for more businesses and services to spring up in the neighborhood, and you can also use these services, so you benefit from his arrival. But after all the houses get filled up, and after the high-rises start rising, there comes a point when new neighbors start posing negative externalities (meaning they are creating costs for others than they don’t fully bear themselves.) The high-rises will block sunlight and views, traffic will become congested, architectural charm will be razed, air quality will decrease, and sidewalks will become a nightmare to navigate.
Imagine a city of a million people, where 70% of people prefer medium-density housing, and 30% prefer high-density housing. With zoning regulations, everybody can live in the neighborhood they prefer, although as Yglesias points out, they will certainly be paying a premium to do so. On the outskirts of this city are another couple of million people that have the same preferences in the same proportions, but just can’t afford to live in the city. It’s pretty clear what will happen: the outskirters will move in until the whole city is high-density, and medium-density housing will only be available in the outskirts. This might or might not be a preferable outcome from a policy perspective, but has the market truly weighed the costs and benefits? No. The costs are externalities. This is market failure. A policy that deregulates zoning restrictions would create a city that does not reflect the preferences of its denizens, or even its prospective denizens.
So the people who like medium-density have to move out to the outskirts, you say. What’s so wrong with that? Here’s Yglesias:
If people have strong feelings about not wanting to live on the same block as a tall building, they can move or they can pay what it costs to make it worth a neighboring property owner’s while to avoid building taller.
Ignore the plainly absurd suggestion that a protection racket is going to somehow preserve the quality of our neighborhoods. When Park Slope is built over by Forest Hills-type coop high-rises, why can’t the Brooklynites move to White Plains? Well, this building, this neighborhood -- it isn’t just ‘housing,’ a product like peanut butter that can be replaced if it’s inadequate -- it’s a home. It’s the scenery in the memories of people’s children; it’s a lifetime investment; it’s the nightly refuge of the overworked. It’s little wonder people want to protect this home, and believe that decisions about it should be trusted to a political rather than a purely market-driven economy. I know I would not want to live in a New York City where Greenwich Village and Chelsea became like Second Avenue... or the Upper West Side minus the pre-war architectural detail.
Live in New York for very long at all, and you will run into old timers bemoaning the destruction of the old Penn Station. You hear, you nod… but you don’t really quite get it. I came a little closer to getting it recently after seeing Stanley Kubrick’s Killer’s Kiss, which opens in that dramatic old palace of glass. It was like seeing a ghost; there once, now gone. To his credit, Yglesias makes a carve-out for certain structures of “significant historical value,” but he should realize that neighborhoods are gems in the exact way that old Penn Station was. They can be destroyed. And once they are, a little bit of our soul is gone forever. Maybe that loss is sometimes worth it, but the market alone cannot weigh that loss, because the logic of development is rigged in a single direction. The body politic has to participate in our cities’ fate.


FYI Wags
(#277603)you cut and pasted this from MS Word aparently, there were a bunch of tags listed as "class=MSonormal" that were screwing up the formatting and made it not display correctly. If you want to cut and paste from MS applications, you'll have to disable rich-text and manually remove the "MSonormal" tags if you want the diary to display correctly.
I blame it all on the Internet
Thanks for the fix, Hank
(#277617)It's appreciated.
"I don't want us to descend into a nation of bloggers." - Steve Jobs
No problem
(#277619)I'm used to supporting Mac users :p
I blame it all on the Internet
You're far too favorable to...
(#277616)....the dead hand of the past, here. Neighborhoods, town, even cities die or morph such that they're unrecognizable to their previous inhabitants. This makes them no different from any other human construct, apart from the Pyramids.
"Unfortunately the universe doesn't agree with me. We'll see which one of us is still standing when this is over." -- Eliezer Yudkowsky
I'm not against change, Bernard
(#277618)We have some high-rises coming up on the East River waterline now in NYC. The Long Island City area is starting to feel a little bit like teh north Lake Shore in Chicago, and it's a great thing. I'm all for development, but I believe political intercession is not just inevitable but advisable.
"I don't want us to descend into a nation of bloggers." - Steve Jobs
Some people have the nerve
(#277622)to call you 'conservative', BG.
literally anything can become right or wrong if the dominant class of the moment so wills it
In the US, 'conservative' and 'property developer'
(#277623)are very often one and the same.
M Aurelius was probably right.
But to M's point, in this case...
(#277635)....additional development and anti-zoning are fairly non-conservative positions. To the contrary, Wags is making an argument that, from M's POV, is deeply conservative. Almost literally.
"Unfortunately the universe doesn't agree with me. We'll see which one of us is still standing when this is over." -- Eliezer Yudkowsky
I know! -nt.
(#277634).
"Unfortunately the universe doesn't agree with me. We'll see which one of us is still standing when this is over." -- Eliezer Yudkowsky
Ah, externalities
(#277620)whatever the market can't (or really, doesn't want to) price into costs. And since it's easier for developers to lobby for changes to zoning laws, things get bad before the average citizen starts fighting back.
The bigger problem I have with Yglesias is that he really doesn't take reality into account. Here in the PNW, Seattle and Bellevue have done exactly what he recommended, we've had a 20 year building boom of high density housing. And the result ... is that it's still expensive to live in downtown Seattle or Bellevue. So I don't think the housing market works the way he thinks it does.
I blame it all on the Internet
That many 1-star reviews?
(#277621)[quote]I
I'm going to say up front that I did not read the book, nor will I. Upon learning of Andrew Breitbart's death, the author declared: "Conventions around dead people are ridiculous. The world outlook is slightly improved with @AndrewBrietbart dead." Matt Yglesias openly celebrated the death of a political enemy. Now he wants me to buy his book? No deal, Sparky. No deal.[/quote] And, about the larger point, he needs to visit Shanghai, or Bombay, and compare to, say, Singapore.
literally anything can become right or wrong if the dominant class of the moment so wills it
A strongly bimodal distribution is...
(#277636)....pretty normal for anything produced by folks with a political reputation. As evidenced by the quote above, the review is a vote against the person. And in this case, his thesis is not an orthodox modern liberal one, so he might be turning off folks at the other end, too. I take universal distaste to be a selling point in books, unlike cars & washing machines.
"Unfortunately the universe doesn't agree with me. We'll see which one of us is still standing when this is over." -- Eliezer Yudkowsky
Nah, it was organized on the conservative blogs
(#277637)The fact that they were trashing a libertarian book probably didn't even enter their minds.
"I don't want us to descend into a nation of bloggers." - Steve Jobs
I don't see that anything.....
(#277908)....you wrote contradicts anything I wrote. As such, I deny your "nah" and raise you an "of course". That it might have been "orchestrated" is par for the course. [url=http://www.amazon.com/How-Talk-Liberal-You-Must/product-reviews/1400054184/ref=cm_cr_pr_hist_1?ie=UTF8&showViewpoints=0&filterBy=addOneStar]You think that distribution is accidental?[/url]
"Unfortunately the universe doesn't agree with me. We'll see which one of us is still standing when this is over." -- Eliezer Yudkowsky
*Scott Reads The Review Currently On Top*
(#277913)One star: "God Ann, I thought you were sexy until. . ." Must be one of those creepy liberals who fantasizes about anally violating her. And does anyone *really* find her sexy?
The universe may well have been created without a point--that doesn't imply that we can't give it one.
Okay, but...
(#277920)"Of course" is probably too strong. Bimodal distribution might just be a product of a polarized environment, rather than an organized campaign.
"I don't want us to descend into a nation of bloggers." - Steve Jobs
about roads
(#277625)I wonder how you feel about roads, which certainly shape the character of our neighbourhoods, arguably even more so than the heighth of our habitations. Some want only to get from A to B as quickly as possible, with ample parking to boot, others want bicycle lanes, and still others want nothing more than a pleasant place to walk their dogs. The peanut butter market forces don't seem to be at play here.
I'm now listening to the audiobook of musician David Byrne's The Bicycle Diaries. He has been cycling since the 80s, mostly in New York where he lives, but also in cities around the world thanks to his fold-up bike. He says that New York over the years has gradually improved for cycling. Though I've heard many stories of intense animosity between cyclists and drivers as cycling becomes more popular. (incident in Toronto couple years ago when a driver killed an assertive cyclist)
Perhaps facilities for cyclists are improving in the States. I can report this is not the case in China, which at one time was as close a place to heaven on earth as any for cyclists. I remember personally witnessing the transformation of Renmin Xi Lu in Kunming, a major shopping thoroughfare and start of the famous Burma Road. Apart from the sidewalks, it had two narrow strips of land home to tall leafy platanus trees in the road leaving two lanes bicycle lanes on either side and one automobile lane for each direction running down the middle. I watched the trees being cut down, the verges removed and the beginning of the end of the bike lanes. Quite a depressing development, I thought.
I'm glad to finally see a defence of NIMBYism here at The Forvm. If you won't take a stand to defend your back yard, I can't see you taking a stand to defend anything.
You will kill 10 of our men, and we will kill 1 of yours, and in the end it will be you who tire of it. - Ho Chi Minh
You've been to Kunming?
(#277849)I'm planning to go next year, just a 2 hour hop from here. What are the go-to places?
literally anything can become right or wrong if the dominant class of the moment so wills it
Highest and best use
(#278035)Loosening the legally permissible only works when it's physically possible and economically viable. In NYC, where rents are $1,700/month on the upper west side for a studio, permitting higher densities makes sense. In my neck of the woods, higher densities are being permitted in certain locales but the trade-offs for developers are aesthetic concessions such as building modulation, public space and certain desired architectural features.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particula
I'm not totally sure I understand your point
(#278180)There's always trade-offs. I'm willing to make them, but I think it has got to be a political process, rather than just a market-driven process.
"I don't want us to descend into a nation of bloggers." - Steve Jobs
It's not either-or
(#278475)Because a market-driven process, i.e., constructing a building, involves the unavoidable task of going through the often lengthy governmental process of getting a building permit, there are always tensions and trade-offs on the part of both developer and political entity. I'm involved with this very thing as a consultant for a local port district that is real estate rich and cash tight. In a high-demand area, one of those tensions a city council faces is housing affordability versus housing density. Planning departments go through this kind of business every day as they try to reflect the will of the council, which in turn tries to reflect the will of the people. Yglesias didn't stumble onto anything new. Here in my neck of the woods, the state passed a Growth Management Act in the early 1990s to encourage concentrated development within clearly defined urban growth areas. Oregon has a similar law.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particula
Do you think growth management has worked?
(#278476)I see a lot of building in the urban areas, but I'm not seeing the prices come down much. Or I should say, I don't see the rental prices coming down much.
I blame it all on the Internet
In Seattle, rental rates...
(#278487)...for apartments dropped a bit in 2008-2009, but they've been going up since then, but the increase is almost completely attributable to the cratered condo and single family markets. Lots former and would-be homeowners are renters. Right now, the rates are just getting high enough to economically justify new construction, at the right land prices.
As for the GMA, it has worked as the legislature intended, I believe, not that you can really tell. A lot of growth and development have happened since it was passed. My initial concern was that the act would move us toward a two-tiered society, with the wealthy living on larger estates outside the UGAs and the middle and poorer classes stuck in lower-income inner-city housing. There's some truth to it, but Seattle and Bellevue are doing fairly well.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particula
He's wrong, of course
(#278479)There are many reasons he's wrong. But an easy one to understand is that buildings are paid for not only by people who intend to live in them for a long time, and care about the neighborhood, but also by landlords interested in rental properties.
Renters just need a place to live for a while. They have no investment in the neighborhood, or the city for that matter. Landlords only need to cater to their limited needs, so they can build ugly and too dense with no correction from the market. So, a city can greatly deteriorate as a place worth living in, and yet all the while market forces are operating perfectly.
The problem is that there is a mistmatch between the 50 year impact a building will minimally have, and the one or two year rental contracts that can drive its construction. A second problem is that all buildings create externalities, such as shadows, traffic, blocked views, and so on, that damage the value of other properties.
Without zoning, you end up like this.
I am not a pessimist. I am an incompetent optimist.