Sunday, July 30, 2006
A growing literature addresses the impact that global climate change may have on land use across the world. Much early attention has focused on the Arctic, where melting ice and snow imperils traditional cultures. As for the wealthy nations in the temperate world, there is hope that they may adapt by moving around crops, spending more money on flood control and less on heating. But for Africa, the poorest continent, adjustments are likely to seem costlier and more difficult than elsewhere, and may perhaps be catastrophic. Here are two opinions, one from the World Wildlife Fund and one from an African scholar speaking at the the Wilson Center .
Friday, July 28, 2006
Do moderate-income families have a future in cities such as San Francisco? With median housing prices around $800,000 and an enormous population of well-paid childless adults, San Francisco is seeing its school enrollment dwindle. How can the city retain and continue to attract moderate-income families? San Francisco has decided to spend millions on rent subsidies for such families and has imposed moderate-cost-unit set-asides for new developments. Here's a story on NPR.
Forgive me if I am skeptical of the chances for real success for such land use plans. Subsidies can only do a little against the mighty current of market forces, while set-asides probably won't get much built in a city that was in effect "filled out" decades ago -- the city's population is about the same as it was 50 years ago. The only land use plan that could successfully provide for truly large numbers of moderate-cost housing would be to demolish huge stretches of single-family houses and replace them with multi-families structures. Absent this, moderate-income residents of the Bay area will simply have to put up with living elsewhere (San Francisco holds only about one-ninth of the Bay area's total population). Land use laws should foster multi-family housing and good public transportation in the suburbs, before currently-less-fashionable suburbs such as South San Francisco, Hayward, and Richmond price out moderate-income families as well.
Thursday, July 27, 2006
I'm an advocate of changing our land use laws and increasing funding to support public transportation - especially for dedicated bus lanes, which seem to be the most efficient way of spurring greater use of transit. But it's also simple realism to recognize that in today's metro areas most people don't want to use public transportation and won't do so even if pushed by changed policies. The oft-heard assertion that Americans are "fed up with traffic" doesn't mean that they'd willing give up their auto rides for long walks to the transit stops, waits for a bus or train, and then another long walk to their destination, especially in a nation in which low-density suburbia has been policy for decades. Is this viewpoint simply a spoiled American one? Here's a similarly skeptical opinion from Toronto's Globe and Mail.
Wednesday, July 26, 2006
The great housing price boom of the past 10 years, at least on the coasts, appears to be over; reports are that prices are finally stabilizing. Why the boom? Was it a "bubble"? One factor that certainly fed the fire was simple speculation -- investors bought up existing houses in the expectation that prices would continue to rise sharply for a while. This sort of expectation, of course, can lead to a "bubble" that is fine with speculators if they sell before the bubble bursts (or, in the sticky-upward housing price market, "deflates like a heavy balloon" might be a better metaphor). Such speculation-fueled price rises made it tougher for lower-income Americans to buy in the past decade. Many economists defend the general idea of speculation, of course, pointing out that the profit-sniffing sense in speculation leads the economy to devote more resources, wisely, to whatever is being invested in. We should applaud anyone smart enough to have invested in fledgling Microsoft in 1982 or in Google in 1999 because their speculation helped create services that benefited American life.
But do the benefits of speculation still hold for the housing market? A problem is that the housing world is about as far from a free market as we get in the United States; rising housing prices don't simply lead to a boom in construction, as simple economics would predict. This is because new construction is one of the most regulated aspects of the American economy; it is tied up by zoning, environmental limits, anti-sprawl plans, and myriad other factors. In fact, new construction has not skyrocketed in the nation over the past 10 years, in large part because of these legal limits. Indeed, these limits act as after-burners to a price boom when speculation does occur. So what benefit did the economy get out of the speculation-driven price boom? Probably nothing. And yet speculators that bought in 2000 and sold this year made an enormous profit (in part attributable to the legal restrictions). Accordingly, house-buying speculative profits may form the best case for a windfall profits tax.
Monday, July 24, 2006
Montana, perhaps the quintessential "open range" state, is seeing its land use change as tourism, recreation, and retirement are replacing ranching, mining, and wheat as the bases of the economy. While many Montanans complain about unchecked growth, the truth is subtler. In reality, Montana's population has not grown as quickly as that of the nation as a whole; the state went from two to one representative in Congress after the 1990 Census. But in a state where limited water and extensive federal land ownership restrain new developments, many Montanans find that good land is scarce, especially in the more scenic mountain areas in the west. The stereotype is that Hollywood moguls and other California millionaires are buying up all the good land for summer ranchettes. A possible solution? How about the idea of MAXIMUM lot sizes? This might curb the ranchettes from gobbling so much of the good private land. Wouldn't maximum lot sizes violate the right of property owners to make a reasonable return on their land? Not if some of the land were kept as agricultural.
Sunday, July 23, 2006
Concern over global climate change is moving out from the world of environmental alarmism and into the mainstream, says author Michael Grunwald in an essay here. Grunwald asserts that the public is slowly accepting the need for change, citing Wal-Mart's commitment to limiting carbon emissions by cutting down on truck idling, Governor Schwarzenegger's commitment to slashing pollution, and the growing popularity of hybrid cars in a world of high gas prices. But he slides past the Achilles heel of the notion that cutting carbon makes economic sense, through his statement that a climate-conscious policy would "discourage sprawling subdivisions, instead promoting high-density neighborhoods that would reduce distances for commutes, as well as smaller homes that would require less energy to heat and cool." It will take a lot more than Al Gore's movie and high fuel bills to convince most Americans of the personal benefit of such a land use policy.
Friday, July 21, 2006
Why is auto traffic worse in many new suburbs than in old cities? One reason is the way that streets and roads are built. In the old days, cities were built on a grid, which allows for a large variety of options for getting from one spot to another. As recently as the 1920s, the grid typically was continued out to the new suburbs. In recent decades, however, private development has moved out far more quickly than governments have built new streets and highways. Instead of an expansion of the grid, new subdivision developments in the exurbs are typically built as isolated pods, full of cul-de-sacs, attached to the rest of the world only by one or two old roads, once rural but now clogged with ALL the traffic to and from the development. There's often only one way to get from the self-contained new Swaying Oak Estates community to the rest of the planet. Residents like this self-contained isolation because it minimizes traffic in the development itself and keeps out people from merely traveling through Swaying Oak Estates. But when cul-de-sac Flapping Heron Farm development is built on the other side of the single egress and he cul-de-sac Gentle Breezes development is built a mile further out, this single old road (even expanded to six lanes) becomes a parking lot, while taxpayer advocates and smart growth folks nix the idea of building any more "through" roads.
A potential solution? Prohibit developers from building large developments that are full of cul-de-sacs that have only limited access to the rest of the world. The Twin Cities of Minnesota (also citing supposed communitarian benefits of avoiding cul-de-sacs) have recently made it harder to get approval to build cul-de-sacs. If new developments were required to be built (with developer money) as extensions of the existing street grid, with many ways to get to and from the new development, new suburbs would be as easy to drive through at rush hour as many older neighborhoods are.
Tuesday, July 18, 2006
“Retail Store Size-Cap Ordinances: Legitimate Land Use Regulations or Unconstitutional Economic Protectionism?” is the title of Samford’s Brandon Denning’s cover story in the ABA’s Probate & Property magazine this month. Denning provides a good summary of the law on whether the U.S. Constitution’s dormant commerce clause would prevent local governments from adopting laws barring out-of-state big-box retailers. The sticky question of discerning the motivation behind an ordinance is one key factor.
Although I shake my mind when I think of the idea of discriminating against a business for being based out of state, for some reason I’m not too worried about the effect of a town’s preventing Wal-Mart or Target from moving in. It won’t actually protect the old local Mom-and-Pops, after all; the town’s shoppers will just drive to the next town to find the big discounters, and the local stores will still die. What if the next town passes a similar ordinance? The shoppers will just keep driving until they find their big box; gas at $3 a gallon won’t stop an American in search of a bargain ….
Monday, July 17, 2006
What’s the most significant way for economics to help progressive land use policies? Through impact fees, of course, by which the costs to the community of sprawl and pollution can be imposed on the creators of thee harms, thus encouraging them to look for ways to minimize the fee (and thus the costs to the community). In California’s Central Valley, a pollution impact fee has been imposed on new housing construction, as a way of discouraging new air pollution in one of America’s most polluted air quality control regions. A drawback is that the fee affects only new construction, not existing houses, and this discrimination is the basis of a lawsuit by construction interests. Such a distinction is politically sensible, of course, because prospective migrants can’t vote (while existing homeowners can), and because such as distinction is pleasing to existing residents who would rather keep out new migrants regardless of air pollution concerns.
Friday, July 14, 2006
What’s the most overused and most meaningless term in our land use debates? I suggest the term “open space.” In nearly every argument, some side suggests that one alternative is preferrable because it would provide “open space.” But this term is meaningless unless we examine the details.
An “open space” of a privately controlled, two-acre plot of bluegrass? It might provide a permeable surface, but it would do nothing for public recreation, biodiversity, or habitat. An “open space” of piedmont grazed by cattle? It might allow for some vegetation, but would also be source of pollution and would never develop into a forest or carbon sink. An “open space” of a golf course? Well, this speaks for itself.
So why the continuing appeal of the term “open space” instead of more specificity about the supposed public benefits of a land use? I suggest that “open space” has appeal because it can be used in any instance to mask an argument driven largely by NIMBY, not truly by the public interest.
Thursday, July 13, 2006
The Bureau of Land Management has issued new final regulations that would, in part, make it more difficult for local BLM managers to impose ecologically based restrictions on grazing on the public lands. Environmentalists have long criticized such grazing, of course, arguing that the system provides a “welfare” subsidy for private ranchers to injure a public resource. Cattle trample arid-land plants and pollute creeks, among other harms.
Here are two comments. First, the NPR story quoted pro-ranching advocates, including a BLM official, who justified helping ranchers because efforts to remove ranching would “inexorably” lead to housing development of the grazed lands. What an extraordinary assertion! This appears to be a rather lame attempt to curry some favor with some environmentally minded citizens –- but only those who don’t really understand the extent of the grazing issue. As anyone familiar with BLM lands knows, these lands constitute nearly half of the arid U.S. West –- millions of acres of dry land and desert, only a tiny fraction of which are near the cites and towns in which there are current development pressures.
On the other side, those who call for cutting back grazing on the public lands ignore the fact that the policy of keeping within federal ownership much of the West inevitably leads to controversial issues of public management and less-than-optimal use by ranchers who, in effect, rent instead of own. When former Interior Secretary James Watt suggested in the ‘80s selling off some of these lands, he was chastised by environmentalists. But some judicious selling of some BLM lands to ranchers who then would have an incentive to steward their own land is an idea worth thinking about again.
Monday, July 10, 2006
Just as the great moderation of American politics requires everyone to speak only of helping "working families" -- no one except far leftists actually speak of helping the "poor" anymore -- the effort to foster affordable housing is being refocused on laws to provide "workforce housing" -- that is, housing for the essential public workforce of teachers, firefighters, police officers, etc., that every locality needs. It appears to be politically unmarketable to argue that laws such as minimum lot sizes and zoning against apartments unfairly hurt lower income people, in general, looking for housing: How would aiding such people as a group help the current homeowners who dominate the vote in the local government? But market the problem as one of "We need to house the local police" and maybe affordable housing advocates will get some sympathy, because this type of housing might actually aid the existing homeowners who need their houses protected.
One of the most successful and effective ways to facilitate low-cost housing is laws to require a housing developer to provide a certain percentage of less-expensive housing as a condition for a permit to build. Such rules give the developer -- who needs to get the permit -- an incentive to build the low-cost housing quickly and efficiently. This sort of requirement has been used for decades in big Montgomery County, Md., which, in part because of the rule, has become far more diverse racially and economically than it was 30 years ago.
Here's a story about developers getting approvals just before a new set-aside rule goes into effect in Palm Beach County, Florida. What does the county consider affordable housing? Houses in the range of $164,000 and $304,000. This might be affordable for a firefighter, but not a janitor or store clerk, of course.
Friday, July 7, 2006
While everybody knows that jobs are moving out of cities and to suburbs, there are still plenty of people who commute to the city each day, right? After all, isn't commuting traffic still terrible? Here's some fascinating statistics from the Census Bureau that show that many American cities don't really gain that much in human occupancy during the day.
Quiz: Which big city (of more than 500,000 residents) grows by the highest percentage during the day? Hmmm … It would have to be a city with a traditional downtown and lots of offices to attract suburban commuters (factories are almost gone from the cities, of course) and perhaps with a fairly modest resident population compared to its suburbs. Answer?
It's Washington, D.C., which grows by 71.8 % each work day, according to the 2000 Census -- far ahead of second-place Boston, which expands it population by 41.1%. Seattle (only 28.4%) , Denver, Portland (Ore.), San Francisco, and Charlotte (a sun belt city, but one with compact boundaries and big office towers) round out the top six.
What's most surprising to me, however, is that many other traditional "downtown" cities don't expand by all that much. Philadelphia grows by only 5.9%, Chicago by only 4.9 %, and even New York by only 7.0%. (In other words, of the nearly 8.6 million routine occupants on a typical New York day, more than 90 % live in the city!) Los Angeles's number is 3.5%.
Second quiz: Which big cities lose population during the day? Two very different cities -- Detroit, which has a moribund downtown, and San Jose, which is the quintessence of the new mobile suburb-city without a true focus.
These statistics further support the view that today's so-called "suburbs" are more and more self-sufficient realms that have little reliance on their so-called "central city." For most metro areas, not only do most suburbanites work in the suburbs, but most people who work in the city also live there. These facts complicate transportation and social policies that assume a traditional relationship between city and suburb.
Thursday, July 6, 2006
Ever since the invention of land use zoning, affluent governments have used the power to discourage the migration of the poor and those who would generate government expenditures, under the cover of serving the “public welfare.” In the famous 1926 Euclid decision, of course, the U.S. Supreme Court approved of the practice of discriminating against the “parasites” of apartment buildings. In recent years, critics have revived the once-dormant criticism of the exclusionary effects of such zoning (the lower court in Euclid had struck down the zoning at issue in part because of its effect in segregating people by wealth), but, at the same time, local governments are becoming more sophisticated in their pursuit of maximizing the welfare of their homeowners, regardless of the costs to others.
How have local governments responded to the low-cost housing crunch of this decade? In the case of Seattle, the city government is considering an "experiment" to allow for a backyard apartment in one section of the city, most of which is zoned, of course, for single-family houses only. A leading opponent quoted in the Seattle Times predicts "flying beer bottles" and excessive noise from such apartments (I didn't know that Justice Sutherland was still alive!) and others fear -- oh horror! -- the duplex-ization of Seattle. Although the Times uses the real-life example of a homeowner who wants space for her mother, my guess is that a more common use may be for to provide a bed for the homeowner’s nanny or maid. One doubts that any janitor, fire fighter, or store clerk will be accepted in such apartments; they’ll still have to figure out how to commute from some faraway locality (Spokane?) that provides low-cost housing.
Wednesday, July 5, 2006
The faults in the current farm subsidy program, as highlighted in the Washington Post all this week, are worth a second post. The most expensive component of the system is the "direct and countercyclical payments" to those who have refrained from growing crops on land that was once planted. The biggest fault is that the payments may go to any owner of the land and can continue on for decades after the land was last farmed. In addition to wasting money, the system discourages useful production of some crops.
Cynics and public choice advocates may snicker that the largest impetus to the current system was not the ostensible one -- propping up farm prices by reducing production -- but rather was the political power of farmers … and of influential non-farmers those who may reap the benefits of a system that can be politically marketed as a farm support program.
Here are some ways to control the pay-for-not-growing system, which may serve as boundaries for any type of subsidy program: (a) Require that any recipient have farmed at least some -- say, 1/3 -- of the land in the year in which the subsidy is given; (2) Limit the number of years -- say, 10 years -- for which the subsidy may be given for any particular farm (so as to remove the subsidy for land that has not been planted for many years or is no longer suited for the crop); and (3) Restrict the subsidy to only those years in which crop prices are lower than in recent history.
Monday, July 3, 2006
More than $9 billion a year in federal money is paid to landowners for NOT growing crops, according to an extraordinary report yesterday in the Washington Post. I had thought, ignorantly, that payments for not growing cops had been phased out in the 1990s. The laws were indeed changed, but a new program that was expected to be a temporary transition to a free market has now become permanent. The most outrageous aspect of the system is not simply the idea of paying people not to engage in useful activity; after all, if one accepts the idea of government's meddling to raise farm prices, any economic mechanism would have its problems. The worst aspect, in my view, are the loose details for receiving the payments. According to the Post, there is no requirement that the landowner be a farmer or that any of the land be used to grow crops; payments are made to any owner of land that was historically used for crops. This incentive both discourages farming and encourages purchases of subsidized land as investments by wealthy (and now subsidized) investors who have no ties at all to farming.
Sunday, July 2, 2006
Can giant land use projects make a nation? Dubai certainly appears to think so; perhaps no other place in the world has spent more money and effort on huge projects than the once obscure and poor emirate on the eastern Persian Gulf. From the world's largest man-made port, to the world's tallest hotel in a 1000-feet-high sail-shaped structure built on a man-made island, to one of the world's largest airports, to plans for the world's tallest building, Dubai attracts tourists, architects, and expatriates from all over Asia, and copious attention for its lavish buildings, public places, and infrastructure. Costs include huge traffic backups and a critical housing shortage from workers drawn from across the globe. But if one wants to "see the future," one went to New York in 1950, to Tokyo in 1990, and perhaps to Dubai today.