18
Mar
10

Marginal effects in urban planning

Damned if I can find the link, but someone recently brought an old post from Tyler Cowen to my attention:

In particular, I keep coming back to this idea:

An oversimplified version of my view is that anything good is underprovided at the margin. This follows from a belief in strong network and peer effects, and a belief in the relevance of basic sociology.

(Emphasis added.)

This seems tautological, but it strikes me as fundamental: a little bit more of something good is always better.  What that “something good” actually is depends on the individual consumer.  And that’s where my second link comes in:

Oooh, scare quotes! This oughta be good, right?  Put away your carnassial impulses, folks; Yglesias is on the side of the angels — more specifically, the side of marginal increases in the shit-people-want supply — this time around.  Here’s his basic point:

— Throughout America there are many regulations that restrict the density of the built environment.
— Were it not for these restrictions, people would build more densely.
— Were the built environment more densely built, the metro areas would be less sprawling.

Note: Yglesias is not arguing that everyone wants to live in a densely urbanized Eurotopia.  He’s arguing that, at the margins, there exist people who’d like to build more densely but are being prevented from doing so by zoning restrictions.  (This is in the context of a spat with Randall O’Toole, in which I’m not particularly interested, but you should know that I’m only quoting one side of the argument.)

O’Toole seems to want to engage in a complicated counterfactual hypothetical about whether or not most people would still prefer to live in large single-family homes even in the absence of regulatory restrictions. I don’t have a particular guess as to what the majority opinion would be, but I assume that we would have a mix. He also seems to want to engage in a viciously polarized debate about apartments versus single-family homes, but single-family developments vary widely in their residential density. So even restricting our attention exclusively to suburban living I maintain that absent lot size regulations, lot sizes would be smaller and there would be less sprawl.

What’s more, regardless of majority preference, I think the high cost of housing in New York, Boston, Washington, San Francisco, Santa Monica, &c. indicates that there’s market demand for walkable urbanism and that if it were easier for developers to build more densely in those areas more people would live in them.

(Emphasis added to the important bits.)

One of my hobbies is making hippies cry, and one of my favourite ways to do that is pointing out ways in which their favoured tools of social control — like zoning regulations, which make teh ebil Wal*Marts go elsewhere — inevitably produce the outcomes they despise.  It comes back to the oversimplification of Tyler Cowen: stuff people want is undersupplied at the margins, and in this case it’s zoning and land-use regulations (not to mention rent controls — another reliable tear-jerker) that’re exacerbating that marginal scarcity.

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