Previous research on segregation stresses things like urban form and racial preferences as primary causes. The author finds that an institutional force is more important: local land regulation. Using two datasets of land regulations for the largest U.S. metropolitan areas, the results indicate that anti-density regulations are responsible for large portions of the levels and changes in segregation from 1990 to 2000. A hypothetical switch in zoning regimes from the most exclusionary to the most liberal would reduce the equilibrium gap between the most and least segregated Metropolitan Statistical Areas by at least 35% for the ordinary least squares estimates.

2. Wendell Cox, in a discussion about the relatively dispersed downtowns of the biggest mainland Chinese cities, notes that development along Beijing’s ring roads “resemble[s] more the post-World War II corridor form of Central Avenue in Phoenix than Manhattan, Seattle or Pittsburgh.” Interesting that the urban system that Cox makes a living defending is so popular in communist mainland cities, whereas the market-oriented Chinese cities of Taiwan, Singapore, and Hong Kong follow the more traditional dense downtown design.

3. The NYT reports that the mayor’s office runs a non-profit that organizes farmers markets in rich neighborhoods that already have good food availability, while throwing up barriers and red tape that prevent private groups from starting their own in poor neighborhoods.

4. One company wants to start building prefab skyscrapers, which they claim are quicker and cheaper than traditional construction, although apparently current building codes don’t allow them to build such structures more than six stories tall. In New York City, Forest City Ratner wants to build “the world’s tallest prefabricated steel structure, a 34-story tower that would fulfill his obligation to start building affordable housing at the site,” though the building unions have opposed prefab structures “for obvious reasons,” as they put it. I’m torn on prefab stuff – on the one hand, developers seem to want to build it. But on the other, I wonder if it’s just an unfortunate side effect of our overregulated urban markets. In other words, if developers didn’t have to contend with high zoning-induced land prices and union-inflated building costs, would they still want to build prefab structures? (Although Adam tells me that aesthetically, modern prefab buildings don’t differ much from their traditional counterparts, and the picture in the first link doesn’t look half bad.) Either way, banning prefab seems like the wrong way to go – if anything, the regulations that inhibit traditional construction should be loosened so that the market can decide.

The post Long-form link list appeared first on Market Urbanism.

Mumbai: Penultimate Density, Yet Representative: The core urban area (area of continuous urban development) of Mumbai represents approximately 80 percent of the larger metropolitan area population. Mumbai is the third most dense major urban area in the world at nearly 65,000 residents per square mile (25,000 per square kilometer), trailing Dhaka (Bangladesh) and Hong Kong. Yet even at this near penultimate density, Mumbai exhibits the general trends of dispersion and declining density that are occurring in urban areas around the world, from the most affluent to the least. In the two Mumbai city districts, as in other megacities, housing has become so expensive that population growth is being severely limited. Overall, the Mumbai larger metropolitan area may also be experiencing slower growth as smaller metropolitan areas outperform larger ones, a trend identified in a recent report by the McKinsey Global Institute. Finally, the over-crowded, slum conditions that prevail for more than one-half of the city’s residents could be instrumental in driving growth to more the distant suburbs of Thane and Raigarh.

He never comes out and says it explicitly, but the implication is clear: Market forces are driving people out of Mumbai.

But with all this talk about overcrowded slums and high housing prices, Wendell Cox is missing the elephant in the room: land use regulation. Given rent control laws that would make Sheldon Silver blush and a fixed floor-area ratio of 1.33 for even the dense historical island core, how the hell does Wendell Cox expect Mumbai’s core to grow? India’s stifling regulations are legendary, but Cox seems to be floating on a cloud of car exhaust fumes, blissfully unaware of any facts that might get in the way of his people-love-suburbs narrative.

The post Has Wendell Cox ever heard of India’s license raj? appeared first on Market Urbanism.

This all should give some pause to the relentless hoopla about the country’s supposed “urban renaissance.” The roots of the current economic crisis lie deep in urban economies, where employment growth that has lagged even in good times.  During the last economic expansion, urban job growth was roughly one-sixth that of suburbs and one-third that of smaller communities.

I believe the smart growth-caused-the-subprime-mortgage theory originated with Wendell Cox, and while Joel Kotkin’s statement is rather vague and leaves a lot of wiggle room, it sure sounds like he’s buying into it, too. Any others to add to the list?

The post Who believes that smart growth caused the recession? appeared first on Market Urbanism.

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.

The post Livechat invitation and more thinktank responses appeared first on Market Urbanism.

There is, however, one catch to using revealed preferences: the market has to actually be a market. That is, it has to be free of regulation and subsidies that push consumers too much one way or the other. So, for example, you cannot use consumers’ “revealed” preference for high-fructose corn syrup to argue that Americans prefer it over sugar, because the government massively subsidizes corn and imposes tariffs and quotas on sugar.

Now of course, America has a mixed economy, with an arcane structure of rules and regulations undergirding a capitalist system, so no sector is going to be entirely free of interference.  Although people like O’Toole are adamant in their stated opposition to parking minimums and mandatory low density zoning, they believe that density-forbidding regulations are mostly benign and unnecessary, since most Americans wouldn’t really want to live more densely than they do now.  By this logic, even if restrictions on density were loosened, developers wouldn’t change their ways and America’s deeply suburban land use and transportation patterns would endure.

At the end of the day, whether not we can use “revealed preference” becomes an empirical question: do developers want to build more densely than current regulations allow?  Land use is an enormously complicated and hyperlocal subject, with good data only beginning to emerge, but from what I’ve seen, the answer is an emphatic yes.  Everyone can probably agree that there is a huge amount of pent up demand for density in desirable East Coast urban cores, with high-end markets in illegal land uses.  But empirical proof is more compelling, and in that vein, I think this paper on parking minimums in Los Angeles County is the best evidence we have so far that land use codes induce sprawl beyond the market equilibrium.

Of course, that one paper is not the be all, end all of land use research.  But regardless of which way the evidence goes, I at least recognize that divining Americans’ desired land use patterns is more complicated than looking at the status quo – simply saying “Houston” and waving your hands is not enough.  Too many libertarian defenders of suburbia accept the status as a preference revealed by market competition and refuse to accept debate on this point, and from shaky premises can only come shaky conclusions.

The post The mirage of revealed preferences appeared first on Market Urbanism.

1. Wendell Cox’s Demographia came out with its 2010 Demographic Residential Land & Regulation Cost Index and finds, surprise surprise!, that sprawling Sunbelt and Southern cities have both the least regulated housing markets the most affordable housing. Bill Fulton finds a few faults with the study, including its tendency to lump all land use regulation (whether pro-sprawl or pro-density) together. What surprises me more, though, is that the report seems to only take into account “new detached housing,” and yet its conclusions are being reported as being applicable to “housing” writ large. I didn’t read it in detail, but I don’t see any evidence that multifamily residences or the right to build densely and without parking were even considered.

2. Slum (re)development will probably be one of the biggest urbanism stories of the century, and Mumbai seems to be making some fateful decisions. I’m having trouble finding comparisons of how different countries are doing it, but I suspect the most successful, attractive, livable developments will be the ones where local squatters are given property rights and are allowed to control the pace of redevelopment. Anything else is likely to breed popular resentment and will probably result in a lot of glitzy megaprojects built by political insiders that aren’t well-integrated into the surrounding city.

3. The NYT has a story on a “split” among environmentalists over density, although it seems like the pro-density camp is clearly winning, at least institutionally within the environmentalist movement.  I think a more interesting story is how people who are first and foremost opponents of density and redevelopment use environmental arguments to stall densification – something we’ve discussed before.

4. Despite its youthfulness, Silicon Valley has always been a decidedly suburban phenomenon, but the WSJ claims that’s changing, with “start-ups wanting better access to public transportation and to be in walking distance to restaurants.” Interestingly, Google had deep enough pockets to take a shot at the transit-unfriendliness of its suburban Mountain View campus a few years ago, but I’m curious to see how that experiment panned out. Anybody know anything?

5. Public mass transit already has unions and parking lot construction costs draining them of funds, and now we can add anti-terrorism security theater to that list.

The post Another week, another consolation link list appeared first on Market Urbanism.

Here’s a snippet:

In these days of economists constantly debating the right way to revive the economy, it seems like there is no way to find consensus among economists.  Economists don’t spend much time debating the issues they agree on, and to them, rent control is about as dead an issue as the earth revolving around the sun.  In 1992, 93% of American and Canadian economists surveyed agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.”  Opposition to rent control among economists spans the political spectrum from Milton Friedman and Walter Block to leftist Nobel Laureates Gunnar Myrdal and Paul Krugman.  In fact, it was the socialist Swedish economist Assar Lindbeck who famously said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing it."

The article is part of a series called “Undead Ideas” and I’m told the article is supposed to feature a humorously hideous illustration of a zombie Richard Nixon, which is the reason for the Nixon joke.  I will share the illustration once it is public.    

Could President Obama resurrect an undead Richard Nixon to implement nationwide rent control in the face of the impending stimflation?  There’s a 93% chance his economic advisors wouldn’t let him do such a thing.  However, Nixon’s undead corpse has been spotted mumbling "I am now a Keynesian" in places like California and New York City where bad ideas never seem to die.

I actually thought of the word “stimflation” on my own, but I checked and learned I wasn’t the first to think of it.  The domain stimflation.com had just been reserved last week…

Here’s a composite, I found:

—–

Wendell Cox also made a contribution to the “Undead Ideas” series with a very good article about housing.  I thought I might, but I don’t have any significant disagreements with Cox’s article.  I was very glad not to see him singling out “Smart Growth” as a culprit, and appropriately blaming land use restrictions in general:

Demand for housing, driven by low interest rates and a growing economy, combined with supply restrictions—such as zoning laws, high permitting costs and “not in my backyard” regulations—to contribute to rapid price appreciation.

and he quoted a great point by Glaeser:

If some aid to expensive states is made conditional on permitting more construction, then pricey places will face incentives to permit more units and promote affordability. Those incentives will encourage restrictive cities and towns to look beyond their borders, and to make America more affordable by permitting more construction in the high-price housing markets that are undersupplied and unaffordable even to the middle class.

The post My Article at FreePo on the Resurrection of Rent Control appeared first on Market Urbanism.