Housing Policy

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Over at NewGeography.com, Wendell Cox, author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life, makes the case that one of the two main reasons for the financial crisis was "excessive land use regulation which helped drive prices up in many of the most impacted markets." An excerpt:

Profligate lending increased the demand for housing. This demand, however, produced far different results in different metropolitan areas, depending in large part upon the micro-economic factor of land use regulation. In some metropolitan markets, land use restrictions propelled prices and led to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. This "two-Americas" nature of the housing bubble was noted by Nobel Laureate Paul Krugman more than three years ago. Krugman noted that the US housing bubble was concentrated in areas with stronger land use regulation. Indeed, the housing bubble is by no means pervasive. Krugman and others have identified the single identifiable difference. The bubble – the largest relative housing price increases – occurred in metropolitan markets that have strong restrictions on land use (called "smart growth," "urban consolidation," or "compact city" policy). Metropolitan markets that have the more liberal and traditional land use regulation experienced little relative increase in housing prices. Unlike the more strongly regulated markets, the traditionally regulated markets permitted a normal supply response to the higher market demand created by the profligate lending. This disparate price performance is evidence of a well established principle of economics in operation – that shortages and rationing lead to higher prices.

Among the 50 metropolitan areas with more than 1,000,000 population, 25 have significant land use restrictions and 25 are more liberally regulated. The markets with liberal land use regulation were generally able to absorb from the excess of profligate lending at historic price norms (Median Multiple, or median house price divided by median household income, of 3.0 or less), while those with restrictive land use regulation were not.

Moreover, the demand was greater in the more liberal markets, not the restrictive markets. Since 2000, population growth has been at least four times as high in the traditional metropolitan markets as in the more regulated markets. The ultimate examples are liberally regulated Atlanta, Dallas-Fort Worth and Houston, the fastest growing metropolitan areas in the developed world with more than 5,000,000 population, where prices have remained within historic norms. Indeed, the more restrictive markets have seen a huge outflow of residents to the markets with traditional land use regulation (see: http://www.demographia.com/db-haffmigra.pdf).

Whole thing here. reason on land use regulations here.

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  1. Is it possible that anti-sprawl regulations resulted in a real rise in home values while other factors led to the “fake” value bubble?

    Seattle, for instance, seems to have been relatively resistant to the bursting of the housing bubble.

    I’ll have to think about this a bit.

  2. Oh yeah, that’s why there’s such a surplus of houses, because they were over regulated and too costly. I’m no great fan of regulation, but to say that regulation caused an increase in price and a ridiculous surplus in housing while trying to minimize new starts is kind of irrational.

  3. strong restrictions on land use (called “smart growth,” “urban consolidation,” or “compact city” policy).

    Except, of course, the strongest, most common, and most restrictive land use policies are not “smart growth” policies, which at least have the virtue of promoting growth in established areas, but the very “traditional regulation” – ie, the sprawl-promoting, low-density (meaning, land-inefficient) suburbanist regulations, which have the added effect of not only limiting the number of housing units that can be built, but driving up the cost of providing a unit by increasing the cost of one house lot, requiring one lot per unit, and thereby oversupplying larger, more expensive homes in order to make the developers’ margins work.

    The adoption of smart growth policies is a consequence of having experienced fast growth and/or being largely built out for a significant period of time. Absent a plausible causal relationship between the adoption of comprehensive planning and the bubble, it’s morely that both are consequences of some feature characteristic of the more bubbly metro regions.

    One observation that comes to mind immediately is that the areas that saw the biggest price spikes tended to be the most expensive to begin with. They also tend to have more of a financial industry presence.

  4. The other problem being, this would be the first bubble in economic history caused by a restriction on supply. It wasn’t a shortage of tulip bulbs, tech stocks, or electrification bonds that caused those markets to experience a bubble. Quite the opposite, bubbles developed while the supply of those assets boomed.

  5. it’s morely that both

    morely = more likely?

    A neologism I can get behind.

    I think I generally agree with joe here.
    He’s articulated the vague sense I was getting at in my initial post.

  6. How has Portland, Or. weathered the housing bubble’s bursting?

  7. In joe we trust.

  8. I agree with the general vibe of this comment thread so far (up to 10:15 anyway)

    My first reaction to this article was regarding how poorly written it was, and how there were 3 paragraphs that could have been condensed into one.

  9. Other possibilities: areas with more renters at the beginning of the boom expriences more demand pressure, as the loosening of credit created a large body of new homebuyers not present in areas without large rental neighborhoods.

    Areas with large, long-established urban neighborhoods (ie, older cities) are more likely to adopt smart-growth policies.

    Higher initial prices again, making housing investment (flipping) more profitable on a margin-basis. Being able to make a 10% profit in a month by fixing up an old home is a lot more attractive when that 10% is $35,000 than when it is $7500.

  10. . . . . the sprawl-promoting, low-density (meaning, land-inefficient) suburbanist regulations, which have the added effect of not only limiting the number of housing units that can be built, but driving up the cost of providing a unit by increasing the cost of one house lot, requiring one lot per unit, and thereby oversupplying larger, more expensive homes in order to make the developers’ margins work.

    Consumers are sheep — house buyers were forced to take whatever the developers would give them. There was no pull from the market for large houses on large lots.

  11. Seattle, for instance, seems to have been relatively resistant to the bursting of the housing bubble.

    As has Portland – the poster child of urban growth boundary land use regulation. While metro areas in SoCal, Florida, Atlanta, Memphis, and Texas – not exactly bastions of anti-sprawl & urbanist initiative, have had some of the top foreclosure rates in Q1 2008.

    I fully understand the idea that excessive land use regulation can raise the costs of home ownership. Smart Growth or anti-sprawl regulations, however, are just as much an implementation of greater flexibility in urban development, by allowing greater densities of housing, tenure and use, than it is a restriction on building. It is pretty well established that sprawl producing land use regulation is that which creates an artificial scarcity by requiring large lots, minimum square footage, and lower densities – driving up prices.

    From what I can tell, the author’s contentions are nearly a classic case of correlation not equaling causation.

  12. or what joe said. must preview.

  13. While I am largely not for government-created land use restrictions, I also fail to see how policies that are generally blamed for a LACK of growth (smart growth, etc.) can also be blamed for inflating a demand for housing above where natural demand is, while simultaneously raising prices. Wouldn’t the raised prices in these areas be more explanable by an actual cost increase in constructing the homes due to the land use regulations, and not due to an artificially high demand, which is usually fueld by artificially low prices (affordability – or too cheap of mortgages/too low of interest rates)?

  14. Seems to me to be downright scary when you think about it.

    Jiff
    http://www.online-anonymity.kr.tc

  15. Neu Mejican,

    Seattle, for instance, seems to have been relatively resistant to the bursting of the housing bubble.

    Not according to this article.

  16. I tend to think that credit and money supply conditions created the conditions for “a” bubble, but this bubble ended up concentrated in certain areas for reasons related to market psychology and narrative.

    In other words, once the macro conditions for a bubble were in place, the reason it hit Nevada real estate and not tulips is because “Nevada real estate is hot, boys!” was a plausible sales pitch for psychological reasons and not necessarily the real underlying conditions there.

    When the stated purpose of our monetary policy and our Keynesian fiscal policy is to override market outcomes and manipulate the decision-making process of individual economic actors, you can’t always rely on rational market analysis. Our policies attempt to make the irrational into the rational and the possible, and under those circumstances the range of possible events is pretty wide.

  17. downstater,

    Thanks for the Portland info.

    So, perhaps, as always, the devil is in the details.

    A mindless “regulation bad” mindset leads to the impression that land-use restrictions (writ large) were a primary cause of the housing bubble.

    More realistically there were indeed “smart” policies that did what they were designed to do (for the most part) while other policies were “stupid” and exacerbated the growth of the housing bubble caused by stupid lending policies.

  18. kinnath,

    Both developers and buyers (speaking generally here) have internalized the idea that the Brady Bunch house in the Brady Bunch neighborhood is the solely acceptable, responsible home to build, sell, buy, and live in, due to generations of social engineering intended to impart precisely that idea.

  19. Seward,

    From you article.

    Still, that was better than the national average decline, 11.3 percent…Seattle “didn’t necessarily get hit by the ‘housing bubble,’ which on top of the economic downturn is affecting California and Florida,” Carrington said. “Seattle is getting affected late in the game. It’s more of a final push.”

  20. um…your article.

  21. Sorry, but this article is sort of a non-sequitur. Not that I disagree about land-use restrictions, but they didn’t have anything to do with the housing bubble as we knew it.

  22. Neu Mejican,

    Yet as the article notes Seattle is worse than a whole host of other cities, even Detroit. So if Seattle less resistant than Detroit or NYC, that must mean whatever resistance Seattle had wasn’t particularly effective.

    Anyway, the only major market that was truly resistant to the bubble was Charlotte, and in the last few months that hasn’t even been the case.

  23. economist,

    Sure it did. They are part of a whole landscape of moronic regulations which try to control human behavior, and in turn create incentives which end in rather significantly unpleasant outcomes.

  24. Yet as the article notes Seattle is worse than a whole host of other cities, even Detroit. So if Seattle less resistant than Detroit or NYC, that must mean whatever resistance Seattle had wasn’t particularly effective.

    Detroit? really? Did they experience much of a bubble at all? Can you do that with the kind of outmigration that they have?

  25. Seward,

    When the claim is “relatively resistant” an article which provides evidence that Seattle was relatively resistant is not a refutation of that claim.

    That was the extent of my point.

    So do Portland, New York, Denver et al. have smarter policies than Seattle?

    Perhaps that list of better performing cities includes some with smarter growth policies than Seattle? Perhaps?

    Detroit seems a non-sequitor with some unique factors impacting housing prices.

  26. Both developers and buyers (speaking generally here) have internalized the idea that the Brady Bunch house in the Brady Bunch neighborhood is the solely acceptable, responsible home to build, sell, buy, and live in, due to generations of social engineering intended to impart precisely that idea.

    I agree, the only question is who had the greatest role in “social engineering”.

    In reality it’s probably a positive feedback loop. The “typical” family wants a house. The politicians that rely on the votes of the heads of each household want to make those families happy.

    Local politicians write zoning laws to make the brady-bunch house the desired outcome of development. National politicans write tax laws to support families buying brady-bunch houes.

    The “have-nots” see more “haves” in brady-bunch houses and demand more assistance from politcians to get their own version of the brady-bunch house. The “have” move upscale to avoid the invasion of the “have-not”.

    Rinse and repeat; rinse and repeat; etc.

    Oh, and of course their are many businesses that generate profits from the rinse-repeat cycle and they let policians know that as well.

  27. A mindless “regulation bad” mindset leads to the impression that land-use restrictions (writ large) were a primary cause of the housing bubble.

    What’s odd about this argument, and the land-use-regulation line pushed on Reason, is that it is not a “regulation bad” mindset.

    The author of this piece specifically calls out sprawl-producing, single-family-only, large lot “traditional regulation” as being good, and adherence to this MORE restrictive (in terms of actual units produced, and the effect on land-cost-per-unit) as being the desireable situation.

    I fully understand the idea that excessive land use regulation can raise the costs of home ownership. BTW, this is not a remotely controversial point. Land use regulations can and do drive up housing costs, both by restricting supply and by requiring that only more-expensive types of housing be built. But that’s a dynamic related to the actual supply and demand of the underlying good, ie, housing.

    By definition, a bubble is a price spike brought about by speculative investment unmoored from the underlying demand for the good. That’s why they pop. If the price increase was being driven by actual demand, it wouldn’t fall off the table as it does when a bubble pops, because people still need homes.

    If the economic crisis had started with a downturn in, say, manufacturing, which reduced overall wealth, thereby reducing the demand for home purchases, that would be one thing.

    But that’s not what happened. The economy went bad as a result of the goings on in the housing market. The decline in home values came first. That’s a pretty strong indicator that it was not the underlying demand for houses, and a supply shortage of the same, that drove the bubble.

  28. due to generations of social engineering intended to impart precisely that idea.

    Given only social engineering and individual preference as the ultimate influence, what percentage of the population living in “Brady Bunch” houses are there because someone engineered them to want it, versus those who actually prefer a distance between themselves and their neighbors?

    Plus I think that gives the Brady Bunch a bad rap. They had 9 people in a 3 1/2-bedroom 2-bath house.

  29. “The other problem being, this would be the first bubble in economic history caused by a restriction on supply. It wasn’t a shortage of tulip bulbs, tech stocks, or electrification bonds that caused those markets to experience a bubble. Quite the opposite, bubbles developed while the supply of those assets boomed.”

    Agreed. This bubble is pretty unique – an oversupply of mortgage demand from the financial industry (to create all those CDO’s), taking advantage of “ownership society” re-writing of regulations to loosen lending restrictions, enabling the rapid expansion of “home flipping”, refi’s, and “buying” a house with an ARM’s for short term ownership when one should probably be renting. These strategies only worked when values went continually up, like most bubbles.

  30. joe,

    Indeed.
    I think the mindset is “regulation bad” but the perspective doesn’t even see the traditional regulations… a sort of cortical blindness.

    It’s like any change in rules = increased level of regulation. No matter the facts on the ground.

  31. swillfredo,

    Social engineering works by influencing individual preference. They’re not two distinct options.

  32. I’m in agreement with Joe here. Suburban land use regulations are just as restrictive as urban land use regulations. One favors “open spaces”, the other serves… well, whatever the whims are of the alderman I guess.

    I like the aesthetic vision of the New Urbanists, the only problem is that they forget that a lot of their architectural/planning aims happened as a result of hundreds of years of non-regulation in European cities.

    Also, the housing bubble is more of an Alan Greenspan phenomenon than a zoning phenomenon.

  33. @Seward,
    Undoubtedly land-use restrictions create unpleasant outcomes, just not this particular unpleasant outcome. In fact, they may have even had a slight mitigating influence, now that I think of it, on this unpleasant outcome, albeit at the cost of their own unpleasant outcomes. Put blame where blame is due.

  34. wow, I’m going to agree with joe on everything he’s posted in this thread. (walks away shaking head…)

  35. Well put, Don.

    When you look at the scale of the refinances in this debacle – IIRC, Ron Paul complained about 60% of the loans Fannie Mae bought being refis – it becomes extremely difficult to accept that underlying demand for home purchases was the driving factor.

  36. Neu Mejican,

    When the claim is “relatively resistant” an article which provides evidence that Seattle was relatively resistant is not a refutation of that claim.

    Relatively resistant would mean to my mind that housing prices weren’t dramatic rising or falling in the Seattle area in step with the rest of the country. Seattle area home prices appear to have peaked with the rest of the nation and they appear to have dropped with the rest of the nation.

    joe,

    The author of this piece specifically calls out sprawl-producing, single-family-only, large lot “traditional regulation” as being good, and adherence to this MORE restrictive (in terms of actual units produced, and the effect on land-cost-per-unit) as being the desireable situation.

    Well, more liberal regulation apparently produces such, because that’s where folks like to live.

    egosumabbas,

    European cities are actually in part the result of hundreds if not thousands of years of regulation and resistance to that regulation.

  37. Social engineering works by influencing individual preference. They’re not two distinct options.

    Sure they are. Coke can spend all the money it wants trying to convince me that their product tastes like anything other than shit and it is not going to change my mind. There are millions of people living in places like New York City with population densities of over 25,000 people per square mile. Those people did not allow themselves to be socially engineered into wanting more land, what is special about them?

    There is no doubt some people can be convinced they like black jelly beans in spite of what their tongue tells them, but for the vast percentage of the home-buying population social engineering, to the extent that it even exists, at best reinforces their existing preferences, and at worst is completely ignored.

  38. Land-use regulations that create sprawl have the added issue of increasing infrastructure demand (more road miles, more electrical-line miles, more snow-plowing miles, more parking lots and maintenence, more sewer miles, etc.) and creating a lot of energy loss.

    I don’t think there’s much to contend in this thread other than the article.

    The title is also confusing.
    “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”
    Really? If homeownership is a quality of life indicator, I’m a licensed plumber.

  39. egosumabbas,

    New Urbanists are quite aware of that. The repeal or loosening of land use regulations makes up a huge part of the New Urbanist agenda.

    Minimum parking requirements, minimum lot sizes, minimum setbacks, limits on the number of units, dimensional regs for driveways, single-use zoning…the New Urbanists put a target on all of these regulations.

  40. Seward,

    Relatively resistant would mean to my mind that housing prices weren’t dramatic rising or falling in the Seattle area in step with the rest of the country. Seattle area home prices appear to have peaked with the rest of the nation and they appear to have dropped with the rest of the nation.

    I think you need to read that article you posted again.

    Well, more liberal regulation apparently produces such, because that’s where folks like to live.

    Huh? Do you see the self-contradiction in this claim?

  41. swillfredo pareto,
    Take that back about coke! You here me! Coke DOES NOT taste like shit! Pepsi, on the hand, tastes like liquefied diarrhea with sugar added.

  42. To those who are talking about refi’s

    I’ve been wondering about the impact of people taking out home equity loans, which I think is somewhat different from refis, in that they actually sell equity under the same bad loan terms.
    Anybody know?

  43. Reinmoose,

    I suspect that absent policies that try to raise the rates of home ownership one would see less of it in the U.S. For many people it only becomes economically rational to own a home when the government takes measures to boost their chances of buying and keeping a home.

  44. New Mexican,

    Just in case you needed any more evidence for your observation I think the mindset is “regulation bad” but the perspective doesn’t even see the traditional regulations… a sort of cortical blindness.

    It’s like any change in rules = increased level of regulation. No matter the facts on the ground.

    From Seward: Well, more liberal regulation apparently produces (single family suburban sprawl), because that’s where folks like to live.

    Yup. No regulation behind the Brady Bunch suburbs. Folks just like to live there, that’s all. Euclid? What’s Euclid?

  45. I give up, joe. What does Euclid have to do with this? Are we even talking about the same Euclid?

  46. IIRC, Ron Paul complained about 60% of the loans Fannie Mae bought being refis

    I read an article about a month describing several poster-children of the refi debacle.

    In particular was one middle-aged professional woman out west (Nevada I think). She bought a house with nothing down using an ARM. When the ARM was going to reset, she refinanced to a new ARM and cashed out her “equity” from the price increase on the house (she bought a cadillac with the cash). Three years later she refinanced again with another ARM and cashed out the equity again.

    Shockingly, the bottom falls out of the house market. The house is now worth less than the original sale price and she owes 50-60% more than than the market value of the house. A lot of supposedly smart people fell into this trap.

    The mortgage meltdown was not caused by poor people buying houses they couldn’t afford at the bottom end of the price spectrum (although many of them did). The big problem was people of significant means getting greedy.

  47. The argument that land use regulation caused higher bubble action in various markets suffers from being unable to properly define either term in the argument, or from being able to show causation even if you could. In short, this is a complete waste of time.

  48. swillfredo,

    If you’d been drinking Coke your whole life, if you’d been raised on Coke, and beer was tough to find because of a decades-long effort to regulate it out of existence, do you think that might influence your choice between Coke and beer?

    Do you think it might influence what options you are given to choose from when you ask a beverage agent to show you some drinks?

  49. Neu Mejican,

    I think you and I differ on what relatively resistant looks like. I’d say it was relatively resistant if it looked more like Salt Lake City’s housing market.

    joe,

    …the New Urbanists put a target on all of these regulations.

    And presumably argue for an entirely different set of regulations.

  50. The title is also confusing.
    “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”
    Really? If homeownership is a quality of life indicator, I’m a licensed plumber.

    That’s an interesting point. How many posts have we read lately about those bad, non-libertarian people who held out universal homeownership as a false god?

  51. economist,

    Oops. Euclid v. Ambler, the Supreme Court case that upheld zoninig.

  52. I don’t know if things are as simple as regulation vs. non-regulation.

    Orlando is a city that had neighborhoods surrounding a small downtown business district. As that business district grew (on steroids from Disney), many areas of the local neighborhoods were re-zoned commercial/office. Attorneys, CPAs and developers moved into houses converted to offices. This was an effort to keep down the price of office space and increase property values. 15 years later, City Hall decides that everybody really wants to live downtown, and gives millions of dollars away to developers, giving the greenlight to high rise condos – if that developer was friendly with the mayor. And now that there is a bust, the Mayor is giving millions of taxpayer dollars to movie theaters, opera halls and Rich DeVos, the billionaire owner of the Orlando Magic.

    Wouldn’t the “efficient” move have been to leave the situation alone? Maybe attorneys would have bought up those houses anyway. I tend to think without rezoning the market would have demanded high rise offices. Only in a schizo, top down environment would you have office space in single family housing and families living in high rise cubicles.

  53. Seward,

    Yes.
    I understand the meaning of relatively resistant.
    You confuse it with immune, seemingly.

    And presumably argue for an entirely different set of regulations.

    They target many of these for elimination.
    Not replacement.

    Sometimes they can only get away with loosening, for sure, but getting rid of regulations isn’t really the same as arguing for more regulation.

  54. I don’t trust Cox; if the sun went supernova tomorrow, he’d have a graph linking solar explosions to smart growth policies.

    Also, I’m doubly skeptical of anyone piling on right now to say “the current crisis proves I was right all along!”

  55. joe,

    Yup. No regulation behind the Brady Bunch suburbs.

    Actually, there is plenty of regulation there (I don’t believe I ever disputed that, BTW). There does appear to be far less of it though than what comes with new forms of planning however. You are in other words in error.

    As for regulation being bad, most of it is indeed bad, and as study after study has demonstrated much of it doesn’t even produce the results that the regulation was meant to address largely because human beings are rather ingenuous at either the avoiding regulations or because the regulations create offsetting incentives that undermine its purpose.

  56. Seward,

    There does appear to be far less of it though than what comes with new forms of planning however.

    Example.

    Seattle used to require parking spaces based on square footage and restrict the number of stories in the urban core. This is an example of sprawl friendly regulation. Parking spaces are there to support commuters who drive in from the suburbs. Yadda yadda.

    The “new planning” got rid of the parking space requirement and raised the limit on the number of stories in the urban core.

    Which is the more liberal policy?

  57. Seward,

    Overall, I’d say New Urbanism represents a big net reducation in regulatory impact. There are certain areas where its proponents support greater regulation, but they are outweighed by the areas of deregulation, and the new regulations they do support would tend to have less of an impact in the big picture. For instance, minimum front-, rear- and side-setbacks combined with lare minimum lot sizes and bans on two- or multi-family units are going to significantly reduce the number of homes built on a 100 acre parcel, while raising the price per unit. Scrapping, or significantly loosening, each of those restrictions would greatly increase the number of units. Add in a MAXIMUM setback regulation – one requiring the homes to be built closer to the sidewalk, a New Urbanist regulation that is commonly supported, would have little or no effect on either the number of units or the price of each unit.

  58. Yup. No regulation behind the Brady Bunch suburbs. Folks just like to live there, that’s all. Euclid? What’s Euclid?

    I’ll admit, the first thing I thought of upon reading joe’s comment above was:

    Sprawling on the fringes of the city
    In geometric order
    An insulated border
    In between the bright lights
    And the far unlit unknown

    I certainly had no idea it was a court case pertaining to zoning.

  59. My first reaction to this article was regarding how poorly written it was

    I agree with Reinmoose.

  60. Huh. That’s cool. I was actually thinking of the ancient Greek mathematician Euclid.

  61. do you think that might influence your choice between Coke and beer?

    There have been numerous instances in my life where I was thirsty and my choice was Coke or nothing and I always picked nothing. Nothing against Coke, I just don’t like it. But that is not the point. I don’t think too much of the hypothesis that people were socially engineered into wanting more land; as I pointed out there are millions of people living in extremely dense urban environments in defiance of your theory that they were brainwashed to believe that a bad 70’s split-level ranch with shag carpeting, an astroturf lawn and a detached garage was the apotheosis of high living. I am proposing that some people like living within spitting distance of 100 other people, some people don’t. Their housing choices adequately expresses their preference to me. The bubble…it’s a tad more complex than anyone writing on the subject today can convey to an audience that likes short, snappy explanations complete with color charts.

  62. It might be time to move comment on something else, since this article is nigh on indefensible. There’s nothing in our libertarian rulebook about having to defend logical errors by other libertarians.

  63. Neu Mejican,

    Seattle has been as resistant to the housing bubble as the Russians were to Operation Barbarossa.

    They target many of these for elimination.
    Not replacement.

    So what, the assumption is that communities will simply self-organize into say the next Amsterdam? I would celebrate that if it were the case.

  64. Seward, methinks you are venturing opinions based on ideology rather than knowledge.

    New Urbanists “presumably” argue for more regulation? In other words, you don’t know if they do or not, but you assume they do.

    There does appear to be far less of it though than what comes with new forms of planning however. Really. Which New Urbanist-influenced zoning codes have you perused to draw this conclusion?

    You are in other words in error.

    Not on your say-so.

  65. Village of Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) – in case you’re just dying to read it.

  66. economist,

    Me too: Euclid -> geometry -> Rush lyrics about suburbs.

    Yeah, I’m a geek.

  67. How many posts have we read lately about those bad, non-libertarian people who held out universal homeownership as a false god?

    I don’t understand what the question is implying. We’ve always been against any initiative universal homeownership and a lot of commenters have said things to the effect of “OMG I’m scum because I rent.”

  68. Seward,

    Seattle has been as resistant to the housing bubble as the Russians were to Operation Barbarossa.

    Relative = more than other areas.

    A polar bear is relatively resistant to cold compared to, say, a tree frog.

    A polar bear can still freeze to death.

    Seattle seeing a smaller loss of value, and this only after the housing bubble impacted the larger economy is a sign of greater resistance. Not immunity, certainly, but relative resistance.

    So what, the assumption is that communities will simply self-organize into say the next Amsterdam?

    Something along that line, yes.

  69. joe,

    …and the new regulations they do support would tend to have less of an impact in the big picture.

    If New Urbanists have a goal – and surely they must – what happens if those goals are not met by the immediate measures they put in place?

    I suspect that in a real world scenario that any new regulations will be layered on top of older regulations, with perhaps modifications of the latter.

  70. There have been numerous instances in my life where I was thirsty and my choice was Coke or nothing and I always picked nothing.

    Yes, swillfredo, but the question I asked was “If you’d been drinking Coke your whole life, if you’d been raised on Coke, and beer was tough to find because of a decades-long effort to regulate it out of existence, do you think that might influence your choice between Coke and beer?

    Social engineering is not defined as efforts to sway your established opinion and practices – that’s more like advertising, or propagands – but as efforts to influence what your established opinion and practices will become established in your mind.

    I am proposing that some people like living within spitting distance of 100 other people And the question you keep misunderstanding is, why not? Why are there so many people who feel that way? You could put it down to an eternal, natural part of human nature, but as you say, there are millions who feel differently.

    Given that hundreds of millions of Americans have only lived in places where any other variety of housing is forbidden by law and has been for generations, it would seems a bit implausible to assert that social engineering played no role in establishing their preferences.

  71. If New Urbanists have a goal – and surely they must – what happens if those goals are not met by the immediate measures they put in place?

    Refining of the measures.
    This will include getting rid of some more regulations.
    It may include tweaking some existing regulations.

    Change does not equal increase.

  72. I suspect….

    You suspect a lot of things, don’t you?

  73. So what, the assumption is that communities will simply self-organize into say the next Amsterdam? I would celebrate that if it were the case.

    i’m sure joe could speak to this more than me, but i would argue that a great many modern urbanist planners and their proposed regulations have been influenced in no small part by Jane Jacobs who essentially posited that, given certain levels of regulation, the best way to create livable urban communities is to allow a greater degree of self-organization. This is because historically, yes, people have organized themselves into cities like amsterdam, new york, or boston without land use regulations specifically telling them to organize in such a way.

  74. The desire of a little house with a white picket fences goes back to the 50’s.

    The mortgage crisis can be traced directly back to the GI Bill. See where goverment intervention and social engineering will get you 😉

  75. Living in a condo is sort of a halfway between homeowning and renting. Specifically, it has the fact that you usually live with a bunch of obnoxious neighbors close by without a renter’s ability to pack up and leave easily. I just say this because some asshole puked in the hallway.

  76. joe,

    Cortical blindness.

    Told ya.

  77. joe,

    New Urbanists “presumably” argue for more regulation? In other words, you don’t know if they do or not, but you assume they do.

    They have an agenda presumably and they want to use the government to meet it. What other means are they going to use besides regulation?

    Not on your say-so.

    I’m not going to get into a who wrote what sort of argument, but I clearly never stated that the current system equals no regulation. Indeed, I even used the term “liberal regulation.”

  78. Seward,

    They have an agenda presumably and they want to use the government to meet it. What other means are they going to use besides regulation?

    You, as a libertarian, presumably, have an agenda that involves the government’s relationship to individuals. How will you meet it other than by increasing the level of regulation?

  79. I realize this sounds like a libertarian arguing with a republican and a democrat, but both MINIMUM and MAXIMUM setback regulations are bad things.

    Which is worse? eh. Anti-freedom is anti-freedom.

  80. downstater,

    This is because historically, yes, people have organized themselves into cities like amsterdam, new york, or boston without land use regulations specifically telling them to organize in such a way.

    Most modern European cities look like they do because of the extensive use of government incentives and disincentives (as well as wholescale razing and rebuilding projects). Furthermore, those cities arose at a time prior to modern transport systems, lighting, communication, etc.

  81. The New Urbanists piss me off because they waste their political capital on eliminating Reg A and adding Reg B instead of just concentrating on the former.

  82. Neu Mejican,

    Perhaps I am cortically blind. Now you have a chance to make me see.

    You, as a libertarian, presumably, have an agenda that involves the government’s relationship to individuals. How will you meet it other than by increasing the level of regulation?

    If I had some specific kind of societal outcome in mind that argument might make sense; but I don’t. I don’t really care whether most cities in the U.S. look like Amsterdam or like Los Angeles (or a mixture of such).

  83. downstater,

    i’m sure joe could speak to this more than me, but i would argue that a great many modern urbanist planners and their proposed regulations have been influenced in no small part by Jane Jacobs who essentially posited that, given certain levels of regulation, the best way to create livable urban communities is to allow a greater degree of self-organization.

    And it only took us 40 or 50 years.

    I’m not saying planners are libertarians, but particularly the urban planners, the ones working to promote urban redevelopment, the virtues of that insight are appreciated.

    “The Life and Death of Great American Cities” was a text book when I got my masters.

  84. Neu Mejican,

    There are examples of what was presumably self-organizing sprawl: the mega-cities of pre-Columbian Amazonia.

  85. Seward,

    They have an agenda presumably and they want to use the government to meet it. So does Ron Paul; a deregulatory agenda.

    I’m not going to get into a who wrote what sort of argument, but I clearly never stated that the current system equals no regulation. Indeed, I even used the term “liberal regulation.” Which was absurd, because the current system is far more strictly regulated than the smart growthers and New Urbanists would like.

    Ask yourself: the sprawl people, the people who want everyone to “not live within spitting distance of 100 people,” which regulations do you think they would like to see removed?

    I’ve listed the types of regulations New Urbanists and Smart Growthers would like to lose.

  86. Seward,

    If I had some specific kind of societal outcome in mind that argument might make sense; but I don’t. I don’t really care whether most cities in the U.S. look like Amsterdam or like Los Angeles (or a mixture of such).

    But you do have a specific societal outcome in mind. It is not in the realm of zoning. It is in the realm of what government looks like. You do care about what the structures and institutions of government look like. You do care whether the outcome looks like North Korea or Singapore or Hong Kong…

    To get to your outcome you would propose changes to how government operates. Those changes to the regulatory regime would eliminate some rules and keep others. They would not, however, increase the overall level of regulation.

    Interestingly, some of those changes would involve property and how it is used. The new urbanist’s agenda would be in accord with yours far more often than it would be in dischord with your agenda.

    No matter what you presume about their agenda based on, apparently, very little actual knowledge of the movement.

  87. joe,

    So can you point us to a New Urbanist project which set up a minimal level of regulation and then (presumably like a deist’s God) let the project self-organize based on those rules?

  88. Why are there so many people who feel that way? You could put it down to an eternal, natural part of human nature, but as you say, there are millions who feel differently.

    I’ll ignore your comment that I don’t understand if you’ll ignore mine that what you said makes no sense. Is there actually some controversy that people have different preferences on their beverages and their housing choices?

    Given that hundreds of millions of Americans have only lived in places where any other variety of housing is forbidden by law and has been for generations, it would seems a bit implausible to assert that social engineering played no role in establishing their preferences.

    Then you and I are in complete agreement. Any attempt by the government to artificially influence (to “socially engineer”) the housing choices people make is a bad idea.

  89. Most modern European cities look like they do because of the extensive use of government incentives and disincentives (as well as wholescale razing and rebuilding projects).

    I’m not sure what this has to do with the point I made.

    Furthermore, those cities arose at a time prior to modern transport systems, lighting, communication, etc.

    But alas, we agree. There are plenty of reasons why people may organize themselves into dense urban areas without land use regulation requiring as much.

  90. joe,

    Which was absurd, because the current system is far more strictly regulated than the smart growthers and New Urbanists would like.

    It may in fact be absurd, but that wasn’t what you appeared to be driving at in your original statement. Again, I really have no desire to get into a who wrote what argument.

    I’ve listed the types of regulations New Urbanists and Smart Growthers would like to lose.

    So, say that is all true for the sake of argument, which ones would they like to instate?

  91. downstater,

    I’m not sure what this has to do with the point I made.

    Well, it seems to me that European populations might be far more dispersed without those government efforts.

    Anyway, European cities appear to be as prone to sprawl as any city in the U.S.

  92. Last try, swillfredo.

    Individuals’ preferences are at least partially determined by their experiences.

    The experiences of most Americans i/r/t how neighborhoods are built have been drastically skewed via government regulation towards single family, auto-dependent sprawl development. Other options have been forbidden, so many millions of Americans have had their preferences determined by experiences that have been deliberately limited as part of a conscious process of social engineering.

    Therefore, noting that these people’s preferences run towards that which is legal does not indicate that the laws conform to people’s preferences, but that people’s preferences, after several generations, have come to conform to the law.

  93. There was the gentleman at Cato (I forget his name) who made essentially the same argument a week or two ago. From everything I’ve read about sub-prime mortgages, they are making a valid argument but explaining what’s going on in a completely different segment of the housing market. The areas where most of the sub-prime related housing was built tended to be exurbs where lots of houses could be built with relatively little land-use regulation.

  94. metropolitan markets that have strong restrictions on land use

    Sounds like nonsense. Land use restrictions in LA County caused more houses to be built two counties over where the restrictions were less. But that has little to do with the marketwide increase in demand for houses – if increased demand causes one’s most affordable house in LA County to be 5x income, then the person should be looking two counties over where the price is about 3x.

    But if the most affordable house in LA County is 8x your annual income, moving two counties over to pay only 6x income still makes no sense.

    I agree that land use restrictions play a part in creation of sprawl (supply is shifted), but it is illogical to say land use restrictions created marketwide oversupply; land-use restrictions have miniscule effect on demand.

  95. Anyway, European cities appear to be as prone to sprawl as any city in the U.S.

    I’m not sure what you mean by “prone to sprawl”, but the reality is that no European city I’m aware of comes anywhere close to exhibiting the sprawl of Atlanta or Las Vegas. If you mean they “want to sprawl”, well maybe they do, but in most areas there really isn’t room and most people couldn’t afford it anyway.

  96. joe,

    So I am reading the “Defining Elements” section of wikipedia on New Urbanism; would you say it fairly reflects what New Urbanism generally calls for.

    http://en.wikipedia.org/wiki/New_Urbanism#Defining_elements

    If so, how are these elements to be met?

  97. Plus I think that gives the Brady Bunch a bad rap. They had 9 people in a 3 1/2-bedroom 2-bath house.

    Ding ding ding!!!

    The Brady kids shared bedrooms. That’s considered child abuse nowadays.

  98. Land use policies as a minor or one of many factors, I’ll buy. One of the two main reasons? Color me extremely skeptical. I’ve got plenty of reasons to oppose restrictive land use regulations, but I won’t be tossing this one out in arguments.

    And I’m not going to go buy the book.

  99. rhywun,

    …but the reality is that no European city I’m aware of comes anywhere close to exhibiting the sprawl of Atlanta or Las Vegas.

    Check out this review.

  100. A house with six goofball kids and a constantly nervous maid acting like she just stole something
    sounds more like Hell than the American Dream to me.

  101. There is no doubt some people can be convinced they like black jelly beans in spite of what their tongue tells them, but for the vast percentage of the home-buying population social engineering, to the extent that it even exists, at best reinforces their existing preferences, and at worst is completely ignored.

    It’s silly not to include discussions of price when talking about consumer preferences.

    Social engineering has radically changed the type of housing available and the lifestyles associated with that housing, and those changes dramatically impact the price of suburban living.

    Restrictions on core development, combined with other regulations that discouraged building in the cores like rent control schemes, combined with massive subsidies of auto transportation and credit for suburban construction, put the state’s finger on the scale and render discussions about “the way people want to live” moot.

    The better question is: How many people would have chosen a suburban lifestyle if suburb dwellers had to bear the entire cost of extending transportation systems to the suburbs, and if the credit they used to finance their moves had been properly priced? How expensive would it have been to create the suburbs using private means alone? What would a price change of this magnitude have done to consumer preferences, and to the relative attractiveness of different modes of life?

  102. Seward,

    A read to get a handle on the philosophy underpinning the new urbanist idea.

    http://www.natcap.org/

    You can download the chapter on the building and real-estate industries.

  103. Seward,

    If so, how are these elements to be met?

    Through private development withing a regulatory framework significantly less restrictive than that which was used to created auto-dependent sprawl.

  104. The better question is: How many people would have chosen a suburban lifestyle if suburb dwellers had to bear the entire cost of extending transportation systems to the suburbs, and if the credit they used to finance their moves had been properly priced?

    I’ve frequently used this argument. Bien fait Fluffy

  105. Seward,

    Yes, by the definition of “sprawl” which that writer chooses to embrace, European cities are sprawling. Yet he has chosen to ignore the *quality* which out-migration has taken. Comparing suburban London–with its plentiful trains and pockets of density here and there–to Atlanta, where a car is an absolute necessity to function, is a joke.

  106. Reinmoose | October 29, 2008, 12:31pm | #
    The better question is: How many people would have chosen a suburban lifestyle if suburb dwellers had to bear the entire cost of extending transportation systems to the suburbs, and if the credit they used to finance their moves had been properly priced?

    I’ve frequently used this argument. Bien fait Fluffy

    Cost of government contracting for infrastructure compared to similar outlays for private development, and factor in on the other side of that ledger a life time of paying municipal taxes and the cost of underlying regulatory burdens on one’s life style, could come out cheaper.

  107. How many people would have chosen a suburban lifestyle if suburb dwellers had to bear the entire cost of extending transportation systems to the suburbs, and if the credit they used to finance their moves had been properly priced?

    I don’t know about most other cities, but most suburban Chicago residents pays a shitload more in real estate taxes than their city bretheren. Not to mention the gas taxes that are pooled to support the varied transit systems even though most of the suburban highways are toll roads. Ain’t no disproportionate number of free riders in the suburbs around here.

  108. joe,

    Can you be a bit more specific? For example, how does one make sure that a variety of different types of housing arise? Do they do so “naturally” or is it an issue of quotas?

    rhywun,

    It seems to me that both cities are spreading outwards, and each has pockets of density (though those pockets may be made of up different things). Anyway, I enjoy having a car as an “absolute necessity.”

  109. Seward,

    Either, jor both, depending on who you ask and the existing situation.

    BTW, you, like that author of the review, are using “sprawl” merely to mean “outward growth.”

    There has always been outward growth in American cities; sprawl is a particular variety of that growth, a novel one which came into vogue after World War 2. There was significant growth and suburbanization around American cities in the 1920s, but it was of a different character. The places being built – like the neighborhood I live in – were still walkable, mixed-use, small streets, sidewalks, houses addressing the public space, mixed-residential, small lots, yadda yadda yadda. They still displayed the common features that characterized human settlement from the dawn of civilization through the middle of the 20th century, even as they represented outward growth and suburbanization.

  110. Cost of government contracting for infrastructure compared to similar outlays for private development, and factor in on the other side of that ledger a life time of paying municipal taxes and the cost of underlying regulatory burdens on one’s life style, could come out cheaper.

    That sounds rather fantastical to me.
    Anyway, it’s not like we’ll ever know for sure

  111. Wouldn’t the “efficient” move have been to leave the situation alone? Maybe attorneys would have bought up those houses anyway. I tend to think without rezoning the market would have demanded high rise offices. Only in a schizo, top down environment would you have office space in single family housing and families living in high rise cubicles.

    So, what’s the problem?

  112. joe,

    I’m really not quite sure how a quota system on housing type is any less problematic than a regulatory system which mandates things like lot size.

    It just another varient on cities growing outwards. There is no doubt that the current technology allows for what wasn’t possible in the past. So the distinction doesn’t appear to be as important as you make it out to be.

  113. rhywun,

    I looked up urban sprawl on wikipedia, and the first picture of a demonstration of such was one of Paris.


  114. That sounds rather fantastical to me.
    Anyway, it’s not like we’ll ever know for sure

    There is that qualifier. I’ve seen it in action on a micro scale, though. I bought land in an area just outside of another town that is one of the fastest growing areas in the state and my land adjacent to a dump (a bargain). I put up a line of trees between the property three acres thick so it is not even unsightly at this point.

    The owner of the dump pays all of the roadway cost and he paid out building the electrical lines years ago. The cost of maintaining the roadway which goes through two other developments with a fresh coat of gravel and tar is pretty negligible.

  115. rhywun,

    This from the same wikipedia article:

    According to data in “Cities and Automobile Dependence” by Kenworthy and Laube (1999), urbanized area population losses occurred while there was an expansion of sprawl between 1970 and 1990 in Brussels, Belgium; Copenhagen, Denmark; Frankfurt, Germany; Hamburg, Germany; Munich, Germany and Zurich, Switzerland, albeit without the wholesale dismantling of public transit systems that occurred in the United States.

    I suspect what drives “sprawl” most is affluence.

  116. without the wholesale dismantling of public transit systems that occurred in the United States

    Well, to me that is a key difference between “sprawl” and “not sprawl”. The presence or absence of public transportation–even in a society where cars are plentiful–has all sorts of implications on the resulting landscape.

  117. Oops. End italics, there.

  118. rhywun,

    Well, apparently the authors in question argue that even societies which have significant public transit systems also have seen an increase in sprawl (at least up to 1990). Might it be that you get sprawl no matter the regulatory regime in question (well, as long as it allows some sort of individual choice), how many resources are put into public transit, etc.?

  119. Atlanta, where a car is an absolute necessity to function

    1987-1988, I lived in Atlanta without a car.

    Even today, I think you could live in midtown without a car as long as you worked in midtown/downtown.

    Im going to Atlanta this weekend. Will probably use the car very little, intentionally got a hotel walking distance from marta and (nearly) every place Im going to go this weekend is also within walking distance of marta. If I were flying, I wouldnt even bother to rent a car.

  120. joe,

    I think you are using sprawl as technical jargon while the rest of us are using the dictionary definition – “to spread out, extend, or be distributed in a straggling or irregular manner”.

    This is a common problem with discussions between professionals and laymen. I have had the problem myself. Whichever version I am using is the right way to use it. 🙂

  121. Seward,

    Well, apparently the authors in question argue that even societies which have significant public transit systems also have seen an increase in sprawl (at least up to 1990). Might it be that you get sprawl no matter the regulatory regime in question (well, as long as it allows some sort of individual choice), how many resources are put into public transit, etc.?

    So, just curious…do you consider these cities to have liberal or restrictive land use policies?

    The existence of public transportation can support sprawl as sprawl goes where transportation allows. In the US our public transportation system is a series of publicly built and maintained highways for cars. In Europe there is a larger rail component, but certainly no shortage of publicly funded roads.

    The real question is what does it look like when you make the people living in the outskirts pay for their transportation access.

    Back in the day, transportation costs kept the suburbs wealthy. Subsidies on transportation have, somewhat, flipped that dynamic.

  122. Neu Mejican,

    So, just curious…do you consider these cities to have liberal or restrictive land use policies?

    I suspect that they have restrictive ones, at least on the books. Practice may be different.

    The existence of public transportation can support sprawl as sprawl goes where transportation allows.

    It seems that as often as much transportation follows sprawl.

    The real question is what does it look like when you make the people living in the outskirts pay for their transportation access.

    They do pay in all manner of ways; car taxes, gasoline taxes, car tags and registration fees, taxes on the sale of cars, etc.

    Back in the day, transportation costs kept the suburbs wealthy. Subsidies on transportation have, somewhat, flipped that dynamic.

    Do you mean it kept them as enclaves for the wealthy? As for subsidies, well, it may be that the primary reason that the wealthy no longer dominate suburbs (if they ever did) is due to increasing affluence and decreasing transport costs based technological advances, etc.

  123. Seward,

    due to increasing affluence and decreasing transport costs based technological advances, etc

    Technological options that are subsidized, certainly.

    They do pay in all manner of ways; car taxes, gasoline taxes, car tags and registration fees, taxes on the sale of cars, etc.

    Cost of living in the suburbs is lower than in the urban core even with these costs added in…and they do not begin to cover the costs of the transportation infrastructure that supports modern suburban living. This infrastructure includes changes to cities to accommodate suburban living, city working, city shopping car drivers. People don’t move to the burbs because it is more expensive, primarily. They move because it is cheaper. Subsidies on transportation (which include the market distorting regulations that have been the core of this discussion) to support that choice help keep it cheaper.

    It seems that as often as much transportation follows sprawl.

    Certainly both happen, but, since we are in the realm of “seems” it seems that sprawl follows transportation options more reliably than transportation options follow sprawl.

    For example look at the population shifts that occurred in the 19th century when the railroads came to the American West.

    The people went to the transportation corridor even if the terminus points were designed to serve populations centers that already existed.

  124. Neu Mejican,

    Technological options that are subsidized, certainly.

    The invention and mass production of the automobile was not subsidized to the best of my knowledge, and certainly did not depend on subsidies to become a popular consumer item.

    Cost of living in the suburbs is lower than in the urban core even with these costs added in…and they do not begin to cover the costs of the transportation infrastructure that supports modern suburban living.

    Well, that is a factual claim I have no way to assess the validity of. I suspect though any change from the current system would bring with it all manner of subsidies to support the change perferred by those pushing that change. So, accepting your claim for sake of argument, from that perspective it is simply a wash.

    Certainly both happen, but, since we are in the realm of “seems” it seems that sprawl follows transportation options more reliably than transportation options follow sprawl.

    No, it doesn’t seem that way. In fact, I don’t know which is more reliable.

    The people went to the transportation corridor even if the terminus points were designed to serve populations centers that already existed.

    Actually, as often as not railroads came to areas after that were “settled,” one particular example being a “boom town.” And let’s not forget the heavy involvement of the state (including massive amounts of graft) in determining where rail lines would go. Indeed, state involvement and encouragement set off overinvesment in railroads on a number of occassions in the 19th century which in turn led to economic “panics.”

  125. joe something you might not be aware of is that, in the west, “smart growth” is a marketing label for “sprawl”.

  126. Seward,

    Actually, as often as not railroads came to areas after that were “settled,”

    That was mentioned in my post. (i.e., terminus points)…

    However, once the transportation route was fixed, settlement followed the transportation access.

    A specific example.
    Pre-railroad, Bernalillo was the largest town in central New Mexico. The railroad put their station in Albuquerque. Now Bernalillo is a small town on the outskirts of the largest city in the region…Albuquerque.

    Think of why civilizations grew up around rivers as another earlier example.

    The invention and mass production of the automobile was not subsidized to the best of my knowledge, and certainly did not depend on subsidies to become a popular consumer item.

    Invention, no…but I would argue the synergy between urban design changes and the automobile industry’s lobbying to facilitate those changes were both important to the car becoming central to our culture and a form of subsidy. If you can’t see a regulation requiring x number of parking spaces for every square foot of building as a subsidy, then we might as well not be discussing this. These types of regulations are pervasive.

  127. There are other aspects too, such as a major double standard on how railroads and roads are treated.

    Roads for the most part are paid for by income and property taxes, while railroads have to pay taxes.

  128. The invention and mass production of the automobile was not subsidized to the best of my knowledge, and certainly did not depend on subsidies to become a popular consumer item.

    Oh? I wasn’t aware that it was possible to run a car without a road.

    (And before you say that roads are covered by the gas tax, I suggest you look into when the first gas tax was introduced. And then look at when roads began being built in America.)

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